Practice Exam Flashcards
(196 cards)
1
Q
The purpose of the property tax disclosure is to
A
Caution buyers to not rely on the seller’s property tax history
2
Q
Which is not necessary for a valid contract? 1) legal object 2) due date 3) acceptance 4) offer
A
2) Due Date
3
Q
How long does a licensee have to give a seller a copy of the listing agreement?
A
24 Hours
4
Q
The Federal government, in an effort to encourage homeownership, allows home owners to deduct which expenses from their federal taxes?
A
Mortgage Interest and Property Taxes
5
Q
A township contains how many sections?
A
36
6
Q
The closing statement will show purchase money mortgage as a ________.
A
Debit to the seller and credit to the buyer
7
Q
Hope has a buyer, Burt, that has written an offer on another real estate agent’s listing. Burt wrote an earnest money check for the transaction in Hope’s name. What is Hope’s best option to make sure she does not violate any laws/rules?
A
Give the check back and ask Burt to write a new check in the company name, because associates cannot collect any money except in the name of the company.
8
Q
A buyer and seller have what kind of relationship?
A
Arm’s Length
9
Q
When representing a seller as a real estate agent, which type of agency applies?
A
Special Agent
10
Q
Fannie Mae purchases loans on the secondary market. Fannie Mae purchases all of the following types of mortgages EXCEPT?
1) FHA
2) Non-conforming
3) VA
4) Conventional
A
2) Non-Conforming
11
Q
________ prohibits a mortgage lender from paying a real estate licensee an unearned referral fee?
A
Real Estate Settlement Precedure Act (RESPA)
12
Q
Your seller has asked you to provide them with a CMA to get a market value for their single-family home. Which of the listed sources would not be used to create the CMA?
1) Division of Real Estate (DRE)
2) Multiple Listing Service (MLS)
3) Property Appraisers Office
4) Clerk of the Courts
A
1) Division of Real Estate (DRE)
13
Q
Which individual is NOT exempt from holding a Florida real estate license?
1) Certified public account (CPA) who is employed by a real estate corporation and receives a salary, plus bonuses based on real estate transactions.
2) An individual who appraises railroad property for tax purposes
3) A salaried employee who works as a manager of a condominium complex and rents individual units for periods of one year or less
4) A person who sells cemetery lots
A
1) Certified public account (CPA) who is employed by a real estate corporation and receives a salary, plus bonuses based on real estate transactions.
14
Q
What is required of all nonresident license applicants?
1) Agree to the irrevocable consent to service section on the license application
2) U.S. citizenship
3) Pay an additional out-of-state nonresident license fee
4) Agree to refer all out-of-state clients to an affiliate broker located in the state of Florida
A
1) Agree to the irrevocable consent to service section on the license application
15
Q
An individual on active duty with the U.S. Navy has up until what period after discharge from active duty to renew her license?
A
2 Years
16
Q
As joint tenants, Dave and Lindsay bought an investment property together 5 years ago. Dave sold his interest in the property to Mike. Mike dies yesterday in a motorcycle accident. Who now owns Mike’s share?
A
Mike’s heirs
17
Q
A buyer put $5,000 down as earnest money when she made the offer on a house. On the closing statement, this will be shown as a:
A
Credit to buyer only
18
Q
A lender charges 2 points on a loan of $350,000 for a quoted interest rate of 4.5% interest. What is the cost to the borrower?
A
$7,000
19
Q
Advertising rental property information that is materially inaccurate is which type of violation?
A
First Degree Misdemeanor
20
Q
Which types of mortgage loans do NOT have a due-on-sale clause?
1) FHA and VA
2) VA and non-conforming
3) FHA and Conventional
4) Conventional and FHA
A
1) FHA and VA
21
Q
Which of the following is NOT a physical characteristic of land?
1) Indestructibility
2) Uniqueness
3) Homogeneous
4) Immobility
A
3) Homogeneous
22
Q
You have a licensed assistant who is paid both on an hourly basis and a commission basis. How should the assistant be paid?
A
The sales associates broker must pay the assistant the commission from the sales associates commissions while the sales associate may pay the hourly wage if it is for tasks that do not require a license.
23
Q
Your buyers loan fell through because he lost his job 5 days before closing. The listing agent is saying the seller is entitled to keep the earnest money. You talk to your broker about the situation. Your broker requested the FREC to issue an escrow disbursement order (EDO) regarding the disputed escrow funds. Before the FREC issued an EDO, the parties settled the dispute. Your broker must notify the FREC that the matter has been resolved within how many days?
A
10 Business Days
24
Q
Samantha purchased a property 5 years ago for $525,000. At the time, it cost her $9,500 in closing costs. She also invested $70,000 in capital improvements in the property. She recently sold it for $730,000. It cost her $55,000 to sell it. What figures will be used to calculate the adjusted basis for the property?
A
$525,000+9500+70,000
Purchase Price + Cost to Purchase + Capital Improvements = Adjusted Basis
25
Paul and Melissa own a home with an assessed tax value of $315,000. Paul was in the Army and lost both his legs during active duty. Melissa was medically discharged from the army with a 30% disability due to an injury during active duty. How much will their exemption be?
$315,000
26
An advantage of Real Estate Investments includes all of the following except:
1) Rate of return
2) Tax advantages
3) Hedge against inflation
4) Liquidity
4) Liquidity
27
How much personal funds may a broker have in the brokerage property management escrow account?
$5000
28
our client JD bought a house for $207,000. 18 months later he sells it for $308,000. What is your profit percentage?
49%
| $308,000 price - $207,000 cost = $101,000 profit: $101,000 profit / $207,000 cost = .487 or 49% profit
29
The Broker's Disclosure Act requirements would pertain to which real estate transaction?
1) Sale of a beach house
2) Sale of a 15-unit apartment building
3) Lease of a house
4) 15-acre Horse farm
1) Sale of a beach house
30
Molly bought a house from Kayla. Molly put $100,000.00 down and got a mortgage in the amount of $450,000.00. How much will Kayla be charged for the doc stamp tax on the deed?
$3,850.00
| Doc Tax calculation: $450,000 + $100,000 = $550,000/100 = 5500 (taxable $100 units) x $0.70 = $3850.00 tax due.
31
John sold his 10-acre property to Susan and Matt. However, he retained his subsurface rights to the_____ on the property.
1) Water
2) Corn
3) Oil
4) Trees
3) Oil
32
If a title has a defect or cloud on it, what type of deed would you use to cure it?
Quitclaim Deed
33
The bundle of rights that a property owner has includes:
1) Fixtures
2) Chattel
3) Control
4) Alienation
3) Control
34
Law specifying that contracts concerning real property must be in writing and signed by the parties bound to the agreement?
Statute of Frauds
35
What is the Net Operating Income for a property with a value of $619,600 with a capitalization rate of 9.1%?
$56,383.60
| V (Value) x R (Capitalization Rate) = I (NOI); $619,600,000 x 0.091 = $56,383.60 Net Operating Income
36
Tarrington buys a home and the closing date is for March 10th. The annual property taxes are $2,325.00 and have not yet been paid. How will this be handled on the closing disclosure?
$433.15 as a credit to the buyer and debit to the seller
1: Seller will credit buyer from January through midnight the day before closing. Calculate the exact number of days; January 31 + February 28 + March 9 = 68 days that the seller owes the buyer. Step 2: Find the daily rate; property taxes for the year $2,325.00 / 365 days = $6.3698630137 x 68 = Step 3: Multiply the daily rate x Number of days = $433.15
37
Billy buys a home from Sally, subject to the mortgage. Sally is no longer accountable for the mortgage. Billy, Sally and the lender have executed what type of agreement?
Novation
38
Donald purchased a home with a down payment of $53,560 and a loan of $412,000 at 3.75% for 30 years. Monthly payments are $1,964.14. What is the percentage of equity?
11.5%
To determine market value, add the down payment to the loan amount.
412,000+53,560=$465,560
Take current equity and divide by market value.
$53,560/$465,560= 0.115
Multipy by 100 to convert to percentage of equity.
0.115 x 100= 11.5%
39
When purchasing an existing condominium, the buyer must receive _________.
Articles of incorporation of the associartion
40
Which is NOT true about who pays for title insurance?
1) Seller pays for owners policy and buyer pays for lenders policy
2) The lender pays for the lenders policy
3) The buyer can negotiate that the seller pays for both policies
4) None of the above
2) The lender pays for the lenders policy
41
A subject property has a fifth bedroom. A comparable property sold for $315,000 with only 3 bedrooms. The appraiser attributes a $8,000 to the extra 2 bedrooms. How is the adjustment made?
Add $8,000 to the comparable
42
The disclosure for ________ environmental hazard is required to be given at or before entering a contract for sale, under Florida law.
Radon
43
Jones Montana once owned an industrial property that was later found to be contaminated with toxic waste. Which of the following statements is true:
1) Retroactive Liability under CERCLA means that Jones Montana has no responsibility since he no longer owns the property.
2) Retroactive Liability under CERCLA means that Jones Montana can be held liable and responsible since he used to own the property.
3) Several Liability under CERCLA means that Jones Montana can be held liable and responsible since he used to own the property.
4) Several Liability under CERCLA means that Jones Montana has no responsibility since he no longer owns the property.
Retroactive Liability under CERCLA means that Jones Montana can be held liable and responsible since he used to own the property.
44
The basic provisions of the national flood insurance program include all of the following except:
1) Development of standards that obstruct the natural flow of flood waters
2) Residential structures in the SFHA must have the first floor above the "Base Flood Elevation"
3) Non-residential structures must meet the residential requirement, or be water-tight below the Base Flood Elevation
4) Over 40 percent of purchasers of National Flood Insurance are in Florida
Development of standards that obstruct the natural fDevelopment of standards that obstruct the natural flow of flood waterslow of flood waters.
45
In regards to the planning commission, which statement is false?
1) Is responsible for the preparation of the comprehensive plan
2) Makes recommendations to the governing body regarding the adoption or amendment of a comprehensive plan
3) Monitors and oversees the effectiveness of the comprehensive plan
4) Requires expert knowledge to participate in the planning commission due to the extensiveness of the comprehensive plan.
Requires expert knowledge to participate in the planning commission due to the extensiveness of the comprehensive plan
46
Reenie had been operating a coffee shop out of her place for years. When zoning changed disallowing anything but residential property in the area, Reenie was allowed to continue running her coffee shop under which provision?
1) Special exception
2) Variance
3) Legally nonconforming use
4) Immune use
3) Legally nonconforming use
47
The regulation of the details of structures for minimum standards for safety, health, and general welfare falls under
1) zoning ordinances
2) building codes
3) health ordinances
4) CERCLA
Building Codes
48
A developer has 100 acres of land. He wants to preserve 30% of the land for another project while selling the rest immediately as separate lots. If zoning requires the lots to be at least 31,500 square feet, how many lots can he sell?
96
Number of starting acres 100 x .70 land available for lots= 70; 70 acres x 43,560 sq ft per acre= 3,049,200 total sq ft available; 3,049,200 sq ft /31,500 sq ft per lot= 96.8 round to 96
49
The purpose of a Planned Unit Development (PUD) includes all of the following except:
1) Provide a desirable environment
2) Economics in land development and maintenance
3) Usable attractive green spaces
4) Clustered development encouraging elimination of agricultural land
Clustered development encouraging elimination of agricultural land
50
City planners strive to reach all of the following goals except
1) Savings of tax money by encouraging sprawl
2) Adequate provision of services
3) Providing for road right-of-way and Controlling Set backs
4) Protection against costly drainage, flooding or environmental problems
1) Savings of tax money by encouraging sprawl
51
A policy that allows businesses, trades, and individuals to operate with very little interference from the government is
Laissez faire
52
The Planning Commission has authority over all of the following except:
1) Plat Map Approval
2) Site Approval
3) Sign Control
4) Assessments
Assessments
53
Failure to account
The act of failing to pay money to a person entitled to receive it.
54
Six individuals decide to form a real estate brokerage partnership. All six individuals are planning to be active in real estate sales. Which statement best applies?
A) The partnership must be registered with the Commission, and all six partners must be active real estate brokers.
B) At least one partner must be licensed as an active broker.
C) Only two partners must have a real estate license.
D) A partnership cannot be formed as a brokerage business.
A) The partnership must be registered with the Commission, and all six partners must be active real estate brokers.
55
What is the purpose of the FREC disciplinary guidelines?
*To give licensees notice of the range of penalties that normally will be imposed for
violation of a law or rule
56
A buyer has agreed to purchase the seller's home. The contract calls for a deposit of $10,000, to
be placed in the broker's escrow account. The sales associate forgets to collect the deposit. The
sale falls through and the seller is claiming the uncollected deposit as liquidated damages. What
will the sales associate likely be charged with?
Culpable Negligence
57
To be enforceable, a lease longer than one year must be:
Must be In writing, signed by the landlord and witnessed by two persons.
58
What is the maximum fine that may be imposed for a first time violation of the Florida Fair Housing Act?
$10,000
59
```
All of the following estates include legal title to real property, EXCEPT:
A) Tenancy for years
B) Fee Simple Estate
C) Life estate
D) Tenancy by the entireties
```
A) Tenancy for years
60
What does the bundle of rights in real property include?
*Disposition, use, and exclusion
61
What is the purpose of the Florida Homestead protection?
Provide protection of the Homestead property from the debts of an improvident
breadwinner.
62
Which instrument transfers title from one individual to another?
Deed
63
What does the term title refer to in real estate?
Ownership
64
```
Which document is a real estate broker NOT legally allowed to prepare?
A) Purchase and sale contract
B) Listing
C) Lease
D) Option
```
C) Lease
65
An Implied Contract
When the court determines that a contract existed due to the actions of the parties
66
An option contract is a unilateral contract, binding upon the:
Optionor
67
The Department of Business and Professional Regulation (DBPR) is under which Florida Statute?
he Department of Business and Professional Regulation (DBPR) is under the Chapter 455 Florida Statute.
68
Kickback
Kickback is a fee paid to a licensee associated with a real estate transaction for non real estate services such as a referral. Licensee may receive this ''referral fee'' under certain circumstances and all parties (buyer and seller) must be informed.
69
Testate
If a person prepares a will and then dies.
70
Intestate
If a person dies without a will.
71
developer of 20 or more new residential units must give a __________ to a buyer.
A developer must give a purchaser a prospectus which gives condominium details.
72
Effective Gross Income
Potential gross income minus vacancy and collection losses
73
At the time of the mortgage loan application The Real Estate Settlement Procedures Act (RESPA) requires?
In appliance with the Real Estate Settlement Procedures Act (RESPA) a Good Faith Estimate and HUD's Settlement cost booklet is to be disclosed at the time of mortgage loan application.
74
The Federal Reserve 'Regulation Z' requires Lenders disclose the annual percentage rate (APR) in appliance with?
The Truth in Lending Act requires lenders to disclose the annual percentage rate and costs associated with credit.
75
Ginnie Mae approved mortgage-backed securities carry?
Ginnie Mae mortgage backed securities carry the full faith and credit guarantee of the federal government.
76
Which market buys and sells existing mortgages?
The secondary market.
The secondary market is an investor market where participants like Fannie Mae, Freddie Mac and Ginnie Mae purchase mortgages from the primary market
77
In which market are loans created?
The primary market contains lenders that originate loans for borrowers.
78
Mortgage Loan Originators
Mortgage loan originators also known as mortgage brokers find loans for borrowers.
79
Acceleration Clause
The Acceleration clause authorizes the mortgagee to accelerate the due date of the entire unpaid balance.
80
Which lien has priority over all other liens?
When selling the property a property tax lien MUST be satisfied before any other lien regardless of lien date
81
An ad valorem property tax disclosure
A buyer must be given a disclosure concerning property tax ad valorem which cautions the buyer not to rely on the amount of the sellers property tax as it may vary in the future.
82
The SW1/4, NE1/4, SE1/4, NW1/4 contains how many acres?
Multiply the denominators of the fraction and then divide the result by 640. 4 * 4 * 4 *4 = 256 and then 640 /256 = 2.5 acres
83
Gross lease
rTenant pays rent and landlord pays taxes, insurances, and repairs.
84
Net Lease
Tenant pays rent PLUS costs such as taxes and insurance.
85
Percentage lease
Tenant pays rent based on a gross sales earned on leased property.
86
Variable lease
Tenant pays rent which may increase in future.
87
Ground Lease
Tenant pays rent for land and builds a building on land.
88
What are brokers required to have visible on their office sign?
Brokers are required to have their Trade name, the words ''Licensed Real Estate Broker and their Full name on their office sign
89
Members of the Florida Real Estate Commission (FREC)
REC has 7 Members: 4 Real Estate Brokers 1 Real Estate Broker or Sales Associate & 2 Consumer Members
90
How much are Doc stamps on the Deed?
Doc stamps are paid on the total purchase price of the property and they are 70 cents per $100
91
How much are Doc stamps on the Note?
oc stamps on the Note are 35 cents per $100. They are paid on NEW mortgages and ASSUMED Mortgages. It is NOT paid on ''subject'' to mortgages.
92
How much is intangible tax on a real estate purchase mortgage?
ntangible tax is .002 multiplied by the total Mortgage, intangible tax is paid on NEW mortgages ONLY.
93
Joe bought a house for $125,000 CASH. How much will he have to pay in Doc stamps? (If the seller will not pay)
Since there is no mortgage, the only payment Joe will have to make is Doc stamps on the DEED. They are 70 cents per $100 therefore $125,000 / 100 x .70 = $875
94
When a broker receives commission for the sale of a property even though she did not sell it, she most likely has which type of agreement with the property owner?
Exclusive Right of Sale
When a broker has an exclusive right of sale agreement with the property owner, the broker receives commission regardless of who sells the property.
95
What must developers submit to the local planning board?
Developers must submit a subdivision plat map to the local planning board. A subdivision plat map details the subdivision of land into lots or tract.
96
Restrictive covenant
A Restrictive covenant is recorded by a developer in the public records on a whole subdivision which affects how the land can be used such as design and square footage.
97
A broker who believes that a citation was issued in error has how long to file an objection?
30 Days
98
The street in front of Tommy's house is to be paved at a cost of $35 per foot. The city has agreed to pay 50% of the paving cost and will assess the abutting properties for the remainder. If Tommy's lot frontage is 100 feet, what is his portion of the special assessment?
$875
100 x $35 = $3500 /2 /2 = $875
99
Which of the following is an example of a unilateral contract?
1) Waldo and Max entering into a purchase and sale agreement
2) Broker Bob entering into a listing agreement with Seller Sam
3) Seller Sam advertising on Craigslist that he will pay any broker who brings a buyer
4) The broker pocketing any amount above a certain sale price
3) Seller Sam advertising on Craigslist that he will pay any broker who brings a buyer
A bilateral contract obligates both parties to perform per the terms of the contract, whereas a unilateral contract has only one party obligated to perform.
100
What section is directly north of section 7?
1) 6
2) 1
3) 18
4) 12
6
101
Joe was unhappy with his assessed property value. Which action should he take first?
If you have any questions concerning valuation, contact the county property appraiser’s office for information.
102
When itemizing deductions for taxes on a residence, a homeowner may deduct:
1) Costs of painting a building
2) Principal and interest paid each month
3) Points paid on a loan upon purchasing the home
4) Property insurance
3) Points paid on a loan upon purchasing the home
103
Mandatory suspension of the licensee's license until the licensee has reimbursed the fund, including interest describes which of the following?
1) When a payment was made to a consumer from the Real Estate Recovery Fund which was not associated with an Escrow Disbursement Order
2) When a payment was made to a consumer from the Real Estate Recovery Fund which was associated with an Escrow Disbursement Order
3) When a payment was made to a licensee from the Real Estate Recovery Fund which was not associated with an Escrow Disbursement Order
4) When a payment was made to a licensee from the Real Estate Recovery Fund which was associated with an Escrow Disbursement Order
1) When a payment was made to a consumer from the Real Estate Recovery Fund which was not associated with an Escrow Disbursement Order
104
An individual, and/or their spouse, that is an active duty member of the armed forces and has a real estate license in another state can get a ______________ real estate license if stationed in Florida.
Regular
105
Division of Florida Condominiums, Timeshares, and Mobile Homes Do NOT handle:
1) Education of Timeshare consumers
2) Disclosure rules of Condominium
3) Arbitration disputes for homeowner associations
4) Regulate how much mobile home rental fees can reach
4) Regulate how much mobile home rental fees can reach
106
A municipal airport is an example of ______________ property.
immune
Government buildings are “immune” to taxation and no tax is assessed. These buildings include schools, municipal buildings, police headquarters and fire stations.
107
n a limited liability partnership, who must have an active real estate broker license?
General partners who perform real estate services.
Limited partnerships are when there are two or more persons involved in the business, however, some are designated as general partners and others are designated as limited partners. General partners in a limited liability partnership must have active real estate broker licenses.
108
Each section is ______________ which equals ______________.
one square mile
| 640 acres
109
As a result of an Escrow Disbursement Order, a licensee lost as a lawsuit. It included $15,000 in actual damages, $4,000 in attorney fees for the broker, $5,000 in court costs, and $8,000 in punitive damages. How much can be paid from the Real Estate Recovery Fund?
$24,000
$15,000 in damages, $4,000 in attorney fees and $5,000 in court cost. Court costs and attorney fees can be reimbursed as well as actual money lost. Punitive damages, treble damages, and interest cannot be paid from the fund.
110
A property is homesteaded. The city tax rate is 9.2 mills, the county tax rate is 7.5 mills, and the school district tax rate is 5 mills. The homeowner is blind and has qualified for homestead exemptions. The home has an assessed value of $225,000. What must the homeowner pay in property tax?
$225,000 - $25,000 base exemption - $500 blind exemption = $199,500 in taxable value school x .005 = $997.50 school taxes due. $225,000 - $50,000 base exemption - $500 blind exemption = $174,500 x (.0075 + .0092 = .0167) = $2,914.15 County and City taxes due + $997.50 school taxes = $3,911.65 Total tax due
111
A lender quotes a mortgage loan of $295,000 at 3.5% interest. The monthly payment is $1,492.70. How much of the second monthly payment will be applied to the principal?
$295,000 x .035 = $10,325 / 12 = $860.42; $1492.70- 860.42 = 632.28; $295,000-632.28 = $294367.72 x .035 = $10,302.87 /12 = $858.57; $1492.70- 858.57 = $634.13
112
An agent notified her broker that the buyer and seller were fighting over who would receive the earnest money deposit for a deal that had failed. The broker notified the FREC of the conflict 5 business days later. How many business days does the broker have remaining to implement a settlement procedure?
25 Days
When there is a good-faith doubt, the broker must provide written notification to the Commission within 15 business days of the last party’s demand, and the broker must institute one of the settlement procedures as set forth in Section 475.25(1)(d)1., Florida Statutes, within 30 business days after the last demand.
113
Calculate the intangible tax for a buyer who is assuming a $150,000 loan and is getting a new mortgage in the amount of $75,000.
Intangible taxes are paid by the buyer on New mortgages only. $75,000 x.002= $150.00.
114
Recording a notice in the newspaper is _______________.
An example of constructive notice.
115
When a broker holds a tenant's deposit and advanced rent, the broker must:
Deposit the funds in the broker's escrow account which has no more than $5000 of the broker's own funds to have started the account
116
An enforceable contract ______________.
Is legal and can be upheld in court
117
The calculated interest rate of an adjustable rate mortgage is calculated by adding ____________.
Index + margin
Index: Interest rate can fluctuate during the term of the loan based on an agreed upon index.
Margin: The amount the lender adds to the index to make the loan profitable.Index + Margin = Full Indexed Rate
118
Which statement is false regarding Florida telemarking laws?
1) Licensees wishing to call leads should check the Florida DNC registry.
2) Florida DNC registry is administered by the Department of Agriculture and Consumer Services.
3) Violations of the Florida DNC list may result in a $10,000 fine per infraction.
4) Licensees may not call FSBOs to solicit listings if the person is on the Florida DNC registry.
4) Licensees may not call FSBOs to solicit listings if the person is on the Florida DNC registry.
119
Interest on an assumed mortgage is entered on the closing disclosure as __________________.
1) Debit to the seller
2) Debit to the buyer
3) Debit to the seller and a credit to the buyer
4) Credit to the seller and a debit to the buyer
3) Debit to the seller and a credit to the buyer
120
Which statement is FALSE regarding The Equal Credit Opportunity Act?
1) Protects against being denied a loan based on age discrimination
2) Protects against being denied a loan based on marital status
3) Protects against being denied a loan based on source of income
4) Protects against being denied a loan based on handicap status
4) Protects against being denied a loan based on handicap status
121
A home is scheduled to close on June 15th. On the first of the month, the seller collected $1,250 in rent for all of June. Using the actual number of days in the closing month and giving the buyer day of closing, calculate the proration and indicate how it is handled on the closing statement.
16 days belong to the buyer $1250 / 30 x 16 = $666.67
122
A sales associate is under investigation by the DBPR for a license complaint. The sales associate hires an attorney who comes to an agreement with the DRE attorney. Which of the following describes this situation?
1) This is a stipulation that has to be approved by the FREC
2) This is a notice of noncompliance that has to be approved by the FREC
3) The administrative law judge will approve or disapprove of the agreement
4) The probable cause committee will approve or disapprove of the agreement.
1) This is a stipulation that has to be approved by the FREC
To avoid the hearing process completely, the licensee may agree to a stipulation. Licensee-respondent can meet with a DRE attorney prior to a hearing to discuss a settlement called a stipulation. A stipulation is an agreement as to the facts of the case and the penalty reached. The stipulation must be approved by FREC.
123
A vendor's lien is ______________.
A specific lien created with the filing of a purchase money mortgage.
A vendor’s lien is a specific voluntary lien that is created when the seller gives the buyer/borrower a purchase money mortgage.
124
Which section of the deed includes the dates of execution and names the parties?
Premises
125
Landlords may commingle tenant deposits with their own funds under which condition?
1) If placed in a noninterest earning account
2) If interest is paid to the tenant
3) If the landlord posts a bond
4) The landlord may never commingle tenant deposits
3) If the landlord posts a bond
126
Planning commission generally have the authority to rule on:
1) Zoning variances in commercial areas
2) Zoning variances in residential areas
3) Plat maps
4) Health code violations
3) Plat maps
127
A sales associate must notify the DBPR of a change of residency within:
60 Days
128
The economic characteristic that refers to a person's preference for location is __________.
Situs
129
The SE1/2 of the SW1/4 of the N1/4 and the SE1/4 of the SW1/4 contains how many acres?
This is the same formula you would use in finding the sum of lots in acres, dividing by fraction from right to left except here you would add the two totals, 640/4=160/4= 40/2=20, 640/4=160/4=40. 20+40=60.
130
You are appraising a five-year-old, single-family residence. The main dwelling is 50 feet by 30 feet. The garage is 24 feet by 20 feet. According to figures obtained from cost-estimating service, the base construction cost per square foot of the main dwelling is $100 and $80 per square foot for the garage. Calculate the reproduction cost new of the structure.
50 x 30 = 1500 x $100 = $150,000; 24 x 20 = 480 x $80 = $38,400 + $150,000 = $188,400
131
The Smith's entered into a purchase and sale agreement for a 3-year-old condominium, which document must they receive?
1) Prospectus
2) Estimated operating budget
3) Property report
4) Governance Form
4) Governance Form
132
Which statement does NOT describe an owner’s title insurance policy?
1) The premium is paid only once at time of issue
2) The policy may not be transferred from one owner to another owner
3) Damages are paid for any defect in the title not listed as an exception
4) The policy is issued for an amount equal to the unpaid balance of the mortgage
4) The policy is issued for an amount equal to the unpaid balance of the mortgage.
An owner’s policy is issued for the price of the house whereas the lender’s policy is issued for the price of the mortgage the policy is protecting.
133
A building is valued at $150,000 with an estimated 25-year useful economic life. The building has an effective age of 8 years. Use the age-life method to find the depreciated value of the building.
Effective age ÷ Total economic life × Reproduction cost new = Accrued depreciation; 8/25=0.32X$150,000=$48,000; $150,000-$48,000=$102,000
134
The section number located due west of section 6 is:
Remember counting from left to right. Starting with 1. So, 6, 5, 4, 3, 2, 1, leaves 6 due west of 1
135
What are the steps in protesting the assessed value of real property?
1) Seek an adjustment by contacting the local mayor, appeal to the value adjustment board, and then sue in court
2) Seek an adjustment by contacting the local property appraiser, appeal to the value adjustment board, and then sue in court
3) Seek an adjustment by contacting the local property appraiser, appeal to the value adjustment board, and then issue an ad valorem protest form
4) Seek an adjustment from the ad valorem protest board, appeal to the value adjustment board, and then sue in court
2) Seek an adjustment by contacting the local property appraiser, appeal to the value adjustment board, and then sue in court.
Protest Procedure: Property owner contact property appraisers within the legislated time frame. File an appeal with The Value Adjustment Board. Litigation in courts.
136
The established useful asset life for nonresidential income-producing property under the IRS code is what number of years?
39 years.
The IRS uses a 27.5-year useful asset life for residential rental property and 39 years for non-residential income-producing property.
137
You are the listing agent representing seller Nancy. You listed her house for $350,000 at 6% commission. You offered 2.5% to a buyer's agent as a co-brokerage in the MLS. After 3 months on the market, you sell the house yourself for $325,000 to buyer Tim. Based on your agreement with your broker, your broker keeps 25% of the commission and pays you the rest. How much do you pocket?
rice sold at $325,000X.06 = $19.500X.75 = $14,625.00
138
A buyer applied for a 30-year mortgage on a $100,000 at 3.5% interest. How much of the $750 monthly payment paid in the FIRST month will be applied to the principal?
Beginning Principal Balance × Annual Interest= Annual Interest. Annual Interest ÷ 12 = Monthly Interest Due. Scheduled Monthly Payment – Monthly Interest Due = $ Paid on Principal.
$100,000X .035=$3,500/12=$291.67
$750-$291.67=$458.33
139
Which requirement must be fulfilled in order for a purchase and sale agreement to be enforceable in court?
1) Type of deed that will convey title be specified
2) Be signed by two witnesses
3) Be in written form and signed by both parties
4) Be acknowledged by a notary
3) Be in written form and signed by both parties
According to the Statute of Frauds, the purchase and sale contracts must be in writing to be enforceable.
140
A man owned two farms and a home when he died intestate. The court appointed a personal representative to dispose of any portions of the decedents estate that might be subject to estate taxes and debts of the deceased. The personal representative:
1) Must have the clerk of the circuit court auction any property sold
2) Must register with the DBPR if he expects to be paid for his work
3) May advertise, negotiate, and sell the property and be compensated for his work without registering with the DBPR
4) Must dispose of all real property through an active real estate broker
3) May advertise, negotiate, and sell the property and be compensated for his work without registering with the DBPR.
Any person acting as an Attorney in Fact having Power of Attorney or a Court Appointed Individual for the execution of contracts or conveyances only are exempt from having a real estate license.
141
Which document must a prospective buyer of an existing condominium unit receive?
1) Prospectus
2) Estimated operating budget
3) List of unit owner names and addresses
4) Copy of Frequently Asked Questions and Answers (FAQ)
4) Copy of Frequently Asked Questions and Answers (FAQ)
142
Which type of income is used to derive a gross income multiplier?
1) Gross monthly income
2) Net operating income
3) Gross annual income
4) Effective gross income
3) Gross annual income
With the gross income multiplier, you use the annual rents plus other annual income.
143
Remedies for breach of contract include:
specific performance, award of damages, rescission, and compensatory damages.
144
Within how many days after receiving written notification of a landlord's claim on deposit does a tenant have to object in writing to the claim?
15 Days
When a landlord is holding a security deposit the landlord must: Return the deposit to the tenant within 15 days if no claim is to be made or send written notice by certified mail within 30 days if the claim is made on deposit. Tenant is allowed 15 days to respond to landlords written claim.
145
Bob and Jane took out a mortgage on their first home. They had a monthly total debt obligation of $2250. Their total house payment is $990. They have a gross annual income of $32,000. Calculate their housing expense ratio (round to the nearest %).
Monthly housing expenses (PITI and MIP) ÷ monthly gross income = HER
$32,000/12= $2,666.67; $990/$2,666.67=.37124 or 37%
146
A lease calls for 2.5% of annual gross sales in excess of $325,000 plus a base annual rent of $18,000. What is the annual rent due for the year if the annual gross sales are $410,000?
$410,000-$325,000=$85,000
$85,000 X .025=$2,125
$18,000+$2,125= $20,125
147
If someone believes that they have been wronged by a licensee, what is the complaint process that can be initiated?
A complaint is filed, an investigation of the complaint is made, a probable cause determination is made, a formal complaint is issued if probable cause was found, an informal hearing or formal hearing is conducted, a final order is issued and finally a Judicial review is made (if initiated by the licensee).
148
You own a corner lot which is 100 x 125. The city puts in a new street around your block. Paving costs are $24 per foot. The city is paying 50% . What is your portion of the bill?
100+125= 225 x $24= $5,400 city pays half =$2,700 neighbor pays half =$1,350.
149
The four characteristics of value are:
Demand, Utility, Scarcity, and Transferability
150
A farmer has 112 acres of land. He wants to preserve 75% of the land for himself and sell the rest as separate lots. If zoning requires the lots to be at least 32,670 square feet, how many lots can he sell?
37
151
Components of an ARM:
Index, margin ( spread), adjustment interval, interest rate caps, payment cap and teaser rate.
152
The lender's estimated overhead plus profit is what part of the calculated interest rate of an adjustable-rate mortgage?
1) Index
2) Points
3) Spread
4) Prime Rate
3) Spread
153
Which statement is TRUE regarding a title company holding the escrow funds?
1) The broker must be a signatory on the title company's escrow account
2) Within 5 business days after the deposit is due, the broker must confirm that the deposit was made
Submitted answer 3) If the buyer and seller make demands for the escrowed funds, the broker must make a timely report of conflicting demands to the DBPR
4) Within 10 business days after the date the broker requests written verification of receipt of the deposit, the broker must provide the seller's broker with a copy of the verification
4) Within 10 business days after the date the broker requests written verification of receipt of the deposit, the broker must provide the seller's broker with a copy of the verification
154
Which lien is an example of a superior lien?
1) Judgment
2) Income tax
3) Vendor
4) Special assessment
4) Special assessment
Liens are designated as either a superior lien or a junior lien. Superior liens are paid before junior liens. Some superior liens include property tax, special assessments, and federal estate tax liens. Some junior liens include mortgages, vendor’s, income tax, and judgments.
155
Developer Tom purchased 1200 front footage for $155,000. And then divided them into 6 lots which he sold at $200 per front foot. Calculate the developer's percentage of profit (round to nearest whole number).
1,200X200=240,000; $240,000-$155,000=$85,000/$155,000=0.5483 or 55%
156
You own residential property valued at $500,000. The land accounts for 19% of the total value. Calculate the annual IRS depreciation deduction.
You subtract the value of the land, divide the replacement cost by the IRS allowed useful life. This gives the per year depreciation. $500,000X.19 =$95,000; $500,000-$95,000=$405,000 / 27.5 = 14,727.27
157
The Legislature created the DBPR to regulate various professions for which of the following reasons?
1) The public is not adequately protected by other laws
2) Less restrictive means of regulation are not available
3) The unregulated practice can harm the public
4) All of the above
4) All of the above
158
A township contains:
1) 36 square miles
2) 43,560 square feet
3) 6 square miles
4) 640 acres
1) 36 square miles
159
What is the most common type of method a real estate licensee uses to estimate value?
Comparitive Market Analysis
160
An investment property valued at $440,000 has a rate of return of 9.5%. What is the monthly net income?
V (Value) x R (Capitalization Rate) = I (NOI) $440,000 x .095=$41,800/12 = $3,483
161
What is the formula used to calculate the Gross Rent Multiplier - GRM value?
Market Value / Gross Monthly Rental Income = Gross Rent Multiplier (GRM)
162
Buyer broker agreements can be ___________.
1) Broken only by mutual consent
2) Are not binding to the buyer
3) Are not legal
4) Are not a good idea to use
1) Broken only by mutual consent
163
According to the Statute of Frauds, which of the following statements is true?
1) Option contracts must be in writing
2) Real estate contracts must in writing
3) Lease agreements written for longer than one year must be in writing
4) All of the above
4) All of the above
164
Calculate capital gain: Original purchase price of $210,000 with $7,500 in closing costs. Total improvements made during the time the property was held of $50,000. The property was sold for $345,000 with $25,000 in selling costs.
$210,000 + $7,500 + 50,000 = $267,500 Adjusted Basis. $345,000-$25,000 = $320,000 - $267,500 = $52,500
165
When purchasing a new condominium, the buyer must receive?
1) Estimated operating budget
2) The previous year's financial records
3) A list of current owners
4) Governance form
1) Estimated operating budget
166
Sales associates can register with the DBPR in which legal format?
1) PA - A personal corporation
2) LLC - A limited liability company
3) PLLC - Professional limited liability company
4) All of the above
4) All of the above
167
Primary reference lines _________________.
1) Run North and South are called Principle Meridian Lines
2) Run East and West called Base Lines
3) Are plotted as part of the Government survey system
4) All of the above
4) All of the above
168
With an amortized mortgage, what part of a borrower's payment remains the same?
1) Property taxes
2) Home owners insurance
3) Combined principal and interest
4) All of the above
3) Combined principal and interest
169
In a lien theory state, title ____________.
1) Is transferred to the mortgagee at closing
2) Is transferred to the mortgagor at closing
3) Remains in the seller's name
4) Is placed in a trustee's name
2) Is transferred to the mortgagor at closing
170
Clara held an active California real estate license. Her husband who was a general in the army was transferred to Florida. Clara wanted to practice real estate in Florida. What would she need to do?
1) Apply to the DBPR of Florida for a license, show proof of her California license, and submit fingerprinting for a background check.
2) Practice under her California license in Florida.
3) Take a regular Florida Real Estate Course and pass the state exam.
4) Only pass the 100-question Florida state exam
1) Apply to the DBPR of Florida for a license, show proof of her California license, and submit fingerprinting for a background check.
171
The bundle of rights that a property owner has include which one of the following?
1) Enjoyment
2) Control
3) Alienation
4) All of the above
4) All of the above
172
A contract involving the illegal distribution of cocaine is __________.
1) Void
2) Voidable
3) Executable
4) Cancelled
1) Void
173
Clay is buying a home for $325,000. His interest rate on the loan will be 3.75% for 30 years. He will have a down payment of $25,000. What is the LTV on the loan?
Loan Amount ÷ Price (or value) = LTV ratio Take $325,000 - $25000 = $300,000; $300,000/ 325000 = 92% LTV
174
Metes and bounds commonly include:
1) Degrees
2) Minutes
3) Seconds
4) All of the above
4) All of the above
175
A corporation sole _______________.
1) Is the same thing as a for-profit corporation
2) Can be registered with the DBPR as a real estate brokerage
3) Is formed by an ecclesiastical body
4) Is a business ran by one owner
3) Is formed by an ecclesiastical body
176
A net listing ________________.
The seller agrees to the amount that the seller will net at closing allowing the broker to pocket anything above that amount as a fee for selling.
177
Lien theory means that the mortgage:
1) Creates a lien on the property, with the mortgagee having title.
2) Instrument conveys title to the mortgagee with mortgagor having a lien.
3) Is a lien on the property, but property title is vested with the mortgagor.
4) Is a lien on the property, but property title is vested with the mortgagee.
3) Is a lien on the property, but property title is vested with the mortgagor.
178
All of the following are the three ways used by an APPRAISER to determine the value of property EXCEPT?
1) Comparative Market Analysis
2) Cost Deprecation Approach
3) Comparable Sales Approach
4) Income Approach
1) Comparative Market Analysis
179
Deed Restriction
Placed on a property by an owner which limits a future owners land use
180
The document that provides the borrower with general information about settlement costs, RESPA provisions, and what happens at settlement is:
Your Home Loan Toolkit
181
The Closing DIsclosure must be used to illustrate all sttlement charges for:
Residential transactions financed by federally related mortgage loans.
182
Which statement is FALSE regarding a Net Listing?
1) The seller agrees to the amount that the seller will net at closing
2) The broker keeps everything over this net price.
3) Net listings are legal in Florida
4) Net listings are unilateral Contracts
4) Net listings are unilateral Contracts
183
Fannie Mae purchases all of the following loans EXCEPT:
1) FHA
2) Freddie Mac
3) VA
4) Conventional
2) Freddie Mac
184
What will be the effect if the Federal Reserve Board decides to purchase government securities
in the open market?
A) The money supply will decrease and interest rates will increase.
B) The money supply will increase and interest rates will decrease.
C) The amount of money that member banks may use for loan purposes will be limited, thereby causing interest rates to increase.
D) A tight money market will be created.
B) The money supply will increase and interest rates will decrease.
185
Which statement is TRUE of real estate closings in most states?
a) Closings are generally conducted by real estate salespersons.
b) The buyer usually receives the rents for the day of closing.
c) The buyer must reimburse the seller for any title evidence provided by the seller.
d) The seller usually pays the expenses for the day of closing.
d) The seller usually pays the expenses for the day of closing.
186
Which item would a lender generally require at the closing?
A) Application
B) Market Value Appraisal
C) Title Insurance Commitment
D) Credit Report
C) Title Insurance Commitment
187
All encumbrances and liens shown on the report of title, other than those waived or agreed to by the purchaser and listed in the contract, must be removed so that the title can be delivered free and clear. The removal of such encumbrances is typically the duty of:
The seller
188
The RESPA Uniform Settlement Statement must be used to illustrate all settlement charges for
a) every real estate transaction.
b) transactions financed by VA and FHA loans only.
c) residential transactions financed by federally related mortgage loans.
d) all transactions involving commercial property.
c) residential transactions financed by federally related mortgage loans.
189
A building was purchased for $85,000, with 10 percent down and a loan for the balance. If the lender chared the buyer two discount points, how much cash did the buyer need to come up with at closing if the buyer incurred no other costs?
$10,030
190
A buyer of a $100,000 home has paid $2,000 as earnest money and has a loan commitment for 70
percent of the purchase price. How much more cash does the buyer need to bring to the closing, provided the buyer has no closing costs?
$28,000
191
At the closing of a real estate transaction, the person performing settlement gave the buyer a credit for
certain accrued items. These items were
A) bills relating to the property that have already been paid by the seller.
B) bills relating to the property that will have to be paid by the buyer.
C) all of the seller's real estate bills.
D) all of the buyer's real estate bills.
b) bills relating to the property that will have to be paid by the buyer.
192
The Real Estate Settlement Procedures Act applies to the activities of
A) brokers selling commercial and office buildings.
B) security salespersons selling limited partnerships.
C) Ginnie Mae or Fannie Mae when purchasing mortgages.
D) lenders financing purchase of one-family to four-family residential properties.
D) lenders financing purchase of one-family to four-family residential properties.
193
The purpose of the Real Estate Settlement Procedures Act (RESPA) is to
A) make sure buyers do not borrow more than they can repay.
B) make real estate brokers more responsive to buyers' needs.
C) help buyers know how much money is required.
D) see that buyers know all settlement costs that will be charged to them.
D) see that buyers know all settlement costs that will be charged to them.
194
Which of the following statements is true of a computerized loan origination (CLO) system?
A) The mortgage broker or lender may pay any fee charged by the real estate broker in whose office the CLO
terminal is located.
B) Consumers must be informed of the availability of other lenders—those not shown in the real estate
broker's CLO.
C) The real estate broker in whose office the CLO terminal is located may charge a fee of up to two points for
the use of the system.
D) The fee charged by the real estate broker for using the CLO terminal may not be financed as part of the
loan.
B) Consumers must be informed of the availability of other lenders—those not shown in the real estate
broker's CLO.
195
Discount Points
are fees paid directly to the lender at closing in exchange for a reduced interest rate. This is also called “buying down the rate,” which can lower your monthly mortgage payments. One point costs 1 percent of your mortgage amount
196
Accrued Depreciation Life
Effective Age / Total Economic Life
