real estate exam questions

Question 1

Which may be deducted for income tax purposes by a homeowner?
a. property taxes, insurance and interest
b. insurance, depreciation and taxes
c. depreciation, taxes and interest
d. taxes and interest

Answer 1

d. taxes and interest

Question 2

Which is most closely related to the comparable sales approach?
a. reproduction cost
b. present value of the income stream
c. principle of substitution
d. level annuity capitalization rate

Answer 2

c. principle of substitution

Question 3

Freddie Mac is …
a. primary mortgage market
b. secondary mortgage market

Answer 3

b. secondary mortgage market

Question 4

What is not a way to determine something as a fixture
a. intent
b. size
c. method
d. adaptation

Answer 4

b. size

Question 5

To mix your personal funds with escrow funds would be …
a. illegal
b. mediation
c. commingling
d. conversion

Answer 5

c. commingling

Question 6

When is a deed considered to be transferred?
a. when the deed is signed and delivered by the grantor
b. anytime after the acceptance of the offer
c. anytime after closing
d. when is only delivered by a grantor

Answer 6

a. when the deed is signed and delivered by the grantor

Question 7

Which mortgage is classified by a balloon payment at the end?
a. amortized
b. blanket mortgage
c. partially amortized
d. package mortgage

Answer 7

c. partially amortized

Question 8

Which clause promises the grantor owns the property and has the right to convey title?
a. habendum
b. premises
c. seizen
d. covenant

Answer 8

c. seizen

Question 9

How is property tax proration entered?
a. debit buyer and credit seller
b. debit seller
c. credit buyer
d. debit seller and credit buyer

Answer 9

d. debit seller and credit buyer

Question 10

What is the maximum time for which your license may be suspended?
a. 10 years
b. less than 10 years
c. 7 years
d. revocation

Answer 10

a. 10 years

Question 11

Which contract is not covered under the statute of frauds?
a. mortgage
b. 18-month listing agreement
c. option contract
d. 6 month- lease agreement

Answer 11

d. 6 month- lease agreement

Question 12

A sales associate license will be ____ if he or she does not complete the required post-license education during the initial license period.
a. involuntarily inactive
b. void
c. voluntarily inactive

Answer 12

b. void

Question 13

Post-license educational course for sales associates consists of ____ hours
a. 72
b. 35
c. 45
d. 30

Answer 13

c. 45

Question 14

How long do you have to complete post-license education?
a. 24 months
b. during initial sales associate’s license period
c.12 months
d. before continuing education

Answer 14

b. during initial sales associate’s license period

Question 15

What is the purpose of real estate license law?
a. to protect the public
b. to protect licensees
c. clarify the law
d. grant licenses

Answer 15

a. to protect the public

Question 16

An sales associate failed to complete the required post-license education prior to renewal. What is the status of the license?
a. revoked
b. suspended
c. involuntarily inactive
d. void

Answer 16

d. void

Question 17

How many hours of post-license education are required to renew a broker license?
a. 14
b. 30
c. 45
d. 60

Answer 17

d. 60

Question 18

All of the following are services of real estate requiring a license, Except:
a. showing
b. selling
c. counseling
d. building

Answer 18

d. building

Question 19

What is homestead used for?
a. satisfy a debt
b. make taxes easier
c.

Answer 19

a. satisfy a debt

Question 20

Unwritten law is also called:
a. administrative law
b. promulgated law
c. common law
d. statutory law

Answer 20

c. common law

Question 21

All are included in the bundle of rights EXCEPT:
a. possession
b. disposition
c. exclusion
d. subordination

Answer 21

d. subordination

Question 22

Four unities required to create a joint tenancy …
a. principle, interest, time, and title
b. possession, interest, time, and title
c. possession, interest, title, tenancy
d. principle, interest, time, and title

Answer 22

b. possession, interest, time, and title

Question 23

Duties owed by a transaction broker include:
a. confidentially
b. fiduciary
c. loyalty
d. accounting for all funds

Answer 23

d. accounting for all funds

Question 24

The only active general partner in a real estate partnership did not account properly for his escrowed funds. His license was suspended. All of the licenses of the sales associates in that partnership are:
a. canceled
b. suspended
c. placed in involuntarily inactive status
d. not affected

Answer 24

c. placed in involuntarily inactive status

Question 25

How many days does a buyer of a resale condominium have to cancel the agreement? a. 3 b.7 c. 10 d. 15

Answer 25

a. 3

Question 26

What could cause a fixture to be converted into personal property? a. attachment b. severalty c. severance d. accretion

Answer 26

c. severance

Question 27

How would a father & son own property together with the right of survivorship? a. tenancy by entireties b. tenancy at will c. joint tenancy d. tenancy in common

Answer 27

c. joint tenancy

Question 28

Which deed would be considered a special-purpose deed? a. warranty deed b. quitclaim deed c. deed of trust d. guardians's deed

Answer 28

d. guardians's deed

Question 29

Do you adjust the comparable or subject property in an appraisal?

Answer 29

comparable

Question 30

A home has a poor interior traffic pattern. What type of adjustment might be applied when valuing the property? a. physical deterioration b. external obsolescence c. locational obsolescence d. functional obsolescence

Answer 30

d. functional obsolescence

Question 31

If the comparable property were better than the subject property in size, what adjustment would be appropriate? a. add to the comparable property b. add to the subject property c. subtract from the comparable property d. subtract from the subject property

Answer 31

c. subtract from the comparable property

Question 32

With the income approach to value, if the capitalization rate is decreased and the income remains constant what is the effect of the value? a. value increases b. value remains constant c. value decreases d. value may increase or decrease

Answer 32

a. value increases

Question 33

If the federal reserve should decide to buy government securities, the money supply would ____, and interest rates would _____

Answer 33

money supply would increase interest rates would decrease

Question 34

On a closing statement would a purchase money second mortgage obtained from the seller be entered? a. credit to seller, debit to buyer b. credit to buyer, debit to seller c. debit to seller, receipt for broker d. credit to seller, disbursement by broker

Answer 34

b. credit to buyer, debit to seller

Question 35

With which type of mortgage could negative amortization occur due to payment caps? a. purchase money mortgages b. adjustable-rate mortgages c. blanket mortgages d. reverse mortgages

Answer 35

b. adjustable-rate mortgages

Question 36

When does disintermediation occur? a. When deposits exceed withdrawals b. when withdrawals exceed loans c. when loans exceeds deposits d. when withdrawals exceed deposits

Answer 36

d. when withdrawals exceed deposits

Question 37

How is the interest rate determined on an FHA insured mortgage loan? a. by the market b. by the federal reserve c. by the secretary of the department of housing and urban development d. by congress

Answer 37

a. by the market

Question 38

WHich type of mortgage typically requires a higher down payment and interest rate than other common loan types? a. FHA b. VA c. Conventional mortgage d Home Equity line of credit

Answer 38

c. Conventional mortgage

Question 39

A brokers legal duty to the principal includes all of the following EXCEPT: a. obeying all instructions b. acting in good faith c. obtaining the best price d. disclosing all material facts

Answer 39

a. obeying all instructions

Question 40

What type of advertising would a broker most likely use to sell a duplex? a. national b. specific c. institutional d. general

Answer 40

b. specific

Question 41

Which business structure holds title to land its own name? a. partnership b. corporation sole c. syndicate d. corporation for profit

Answer 41

a. partnership

Question 42

The buyer and seller agree in contract yo postdate the deposit check. Which statement is correct? a. the sales associate should hold it until it clears b. the sales associate should immediately give the check to his or her broker c. the sales associate should refuse the check d. the deposit check should be put in escrow immediatley

Answer 42

b. the sales associate should immediately give the check to his or her broker

Question 43

Which type of business relationship must be in writing?

Answer 43

a. corporations b. partnerships c. corporations and limited partnerships d. joint venture

Question 44

A real estate broker asks his sales associate to commit an illegal act. What should the sales associate do? a. Comply, as the sales associate may lose his or her job b. Refuse to comply and withdraw from the relationship c. notify the florida real estate commission d. comply, but inform the employer that he or she is complying under duress

Answer 44

b. Refuse to comply and withdraw from the relationship

Question 45

In a partnership, each party does not necessarily have which of the following? a. power to bind his or her activity b. a share in the management of the business c. liability for the debts of the partnership d. equal shares of the profits of the partnership

Answer 45

d. equal shares of the profits of the partnership

Question 46

When a buyer withdraws an offer prior to it being accepted by the seller, what should the broker do? a. give the deposit back to the buyer b. keep 1/4 of deposit and return 3/4 of deposit c. keep 1/2 of deposit and return 1/2 d. Contact FREC for instructions

Answer 46

a. give the deposit back to the buyer

Question 47

Which action by a broker is an example of commingling a. placing escrow money into his or her personal account b. failing to disclose material facts c. failing to give an agency disclosure d. steering buyers to an ethnic neighborhood

Answer 47

a. placing escrow money into his or her personal account

Question 48

Loaners that refuse to make loans in certain geographical areas based on social or economic considerations are practing ... a. blockbusting b. steering c. redlining d. disposition

Answer 48

c. redlining

Question 49

A violation of the Florida telephone solicitation act could result in a fine up to ___ a. 1,000 b. 10,000 c. 500 d. 5,000

Answer 49

b. 10,000

Question 50

What is the landlords first step in the eviction process? a. Contact sheriff b. go to court c. give 3 day notice d. give 10 day notice

Answer 50

c. give 3 day notice

Question 51

A convenience store is located in an area that has now been zoned for residential use only would be: a. made to move b. a nonconforming use c. a variance d. special use exception

Answer 51

b. a nonconforming use

Question 52

What would most likely be required to build a church in a residential neighborhood a. special use exception b. variance c. approval of a regional planning council d. an appropriate buffer zone

Answer 52

a. special use exception

Question 53

In case of a financial hardship due to zoning requirement, for what should the homeowner apply? a. nonconforming use b. special use exception c. easement d. variance

Answer 53

d. variance

Question 54

What do zoning laws regulate? a. type of use b. structures and building materials c. public right of way and easements d. color of exteriors, type of roof tile, etc.

Answer 54

a. type of use

Question 55

The real estate market is ___ to respond to changes in supply or demand a. slow b. fast c. constant d. no effect

Answer 55

a. slow

Question 56

Whos market is it when there is an excess of demand over supply a. buyer's b. sellers

Answer 56

b. sellers

Question 57

What is the real estate market experiencing when the demand for available housing exceeds current supply? a. buyers market b. sellers marker c. recessionary cycle d. hypothecation

Answer 57

b. sellers marker

Question 58

What type of commercial marker would exist if there were an excess number of houses for rent a. sellers market b. buyers market c. suppliers market d. all of the above

Answer 58

b. buyers market

Question 59

Which of the following is a characteristic of the real estate market? a. heterogeneous b. reacts very quickly c. mobile d. homogeneous

Answer 59

a. heterogeneous

Question 60

All of the following are physical characteristics of real estate, EXCEPT a. Immobility b. situs c. homogeneous d. heterogeneous

Answer 60

c. homogeneous

Question 61

In which markert would there be a shortage of housing a. buyers market b. housing market c. sellers market d. deficit market

Answer 61

c. sellers market

Question 62

What is opposite of N20 degrees W a.N20E b. S20E c. S20W d. E20N

Answer 62

b. S20E

Question 63

What is the distance between meridians? a. 5 miles b. 6 miles c. 10 miles d. 18 miles

Answer 63

b. 6 miles

Question 64

Who should prepare a legal description a. land surveyor b. attorney c. broker d. title company

Answer 64

a. land surveyor

Question 65

The penalty for a first-degree misdemeanor is ... a. 1,000 fine b. imprisoment for no more than 1 year c. notice of noncompliance d. both a and b

Answer 65

d. both a and b

Question 66

A licensee is being disciplined by the FREC for multiple violations of F.S 475 which penalty may the commission not impose a. revocation b. suspention for up to 10 years c. a find not to exceed 5000 per offense d. imprisoment not to exceed one year

Answer 66

d. imprisoment not to exceed one year

Question 67

When must the prospective buyer get the property tax info? a. 15 days before closing b. before an offer c. once offer is acccepted d. at closing

Answer 67

b. before an offer

Question 68

WHich trait is NOT of of the traits goods and services must possess to have value a. transferability b. conformity c. utility d. scarcity

Answer 68

b. conformity

Question 69

How is the earnest money deposit entered on the closing disclosure a. credit to buyer only b. debit to the seller and credit to buyer c. debit to buyer only d. credit to seller and debit to buyer

Answer 69

a. credit to buyer only

Question 70

Difference between assets and liabilities of an investment is a. net operating income b. cash flow c. positive leverage d. net worth

Answer 70

d. net worth