RE test

How should you respond if your buyer says the following? "We're looking for a three-bedroom, two-bathroom home. We have young children, so we want to make sure we're in a good neighborhood—somewhere safe, where we'll find a lot of good families and neighbor kids that we'd want our children to play with."

"If you provide me with specific neighborhood names, I can certainly look for homes in those areas. You can learn about the different neighborhoods in the area at neighborhoodscout.com."

What is the maximum penalty for a first-degree misdemeanor?

$1,000 and one year in jail

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property?

$1,335.67 - First, find the square footage (5.5 x 43,560' = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400' = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95' = $1,335.67 per front foot.

An appraiser used the cost approach to estimate a property's value at $220,000. The site value was $50,000 and the total depreciation estimate was $4,000. What was the estimated cost of improvements?

$174,000

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?

$387,000

A buyer is purchasing a property for $500,000. His lender's loan-to-value ratio is 90%. How much is the buyer financing?

$450,000 - A 90% LTVR means the buyer is financing 90% of the purchase price. This equates to $450,000.

You're working with a buyer who's purchasing a home that appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one-point origination fee at closing. How much will the loan origination fee be?

$720 - $80,000 x .9 = $72,000 (loan amount), and 1% of $72,000 = $720

Which section of the Internal Revenue Code allows the owner of real property to sell that property, then reinvest the proceeds in a "like-kind" property and defer paying any capital gains taxes?

1031 -Under section 1031 of the Internal Revenue Code, the owner of real property can sell that property and then reinvest the proceeds in a "like-kind" property and defer paying any capital gains taxes.

Hank moved out of a rental house on the second of the month, having met all of his lease obligations. How long until his landlord must refund the security deposit?

15 days later at most

Convert 0.19 to a percentage.

19%

A lot measuring three-fourths of an acre is for sale. How many square feet is this?

32,670

Jane is purchasing a property for $310,000 and plans to finance $250,000. What is the loan-to-value ratio? (Round to the nearest percentage.)

81% - To get the answer, divide $250,000 by $310,000. Multiply the result (0.81) by 100 and add a % sign.

Which of these statements best describes the information in the Florida property tax disclosure?

A caution for the buyers to not rely on the current year's property tax as a way to predict what they'll have to pay.

Which of these is something that is NOT requested in the initial fair housing complaint form?

A notarized copy of the complaint description

What is the difference between a variance and a special use permit?

A variance requires a show of hardship; a special use permit doesn't. - Both variances and special use permits are permanent. A variance is a change in zoning requirements, such as a setback requirement. A special use permit is a change in allowable uses for an area.

Which phase of the investment cycle is best known for write-offs and, depending on the project, tax credits?

Acquisition

Which type of property tax is based on the value of the property?

Ad Valorem

What's involved with the antitrust violation called market allocation?

Agreeing with a competitor to divvy up a market - All antitrust violations involve collusion. This one has competitors agreeing to segment the market, which can result in reduced competition (never a good thing for a consumer).

describes a subordination agreement?

An agreement between two lien holders to modify the order of lien priority - A subordination agreement is an agreement between two lien holders to modify the order of lien priority.

What's considered a kickback according to the Real Estate Settlement Procedures Act?

Any item of value in return for referring business to a settlement service provider - Any item of value in return for referring business to a settlement service provider is considered to be a kickback and is a violation of RESPA Section 8.

Which of these documents is an example of a promissory note?

Borrower Keesha just signed a document that states that she pledges to pay back her mortgage loan of $310,000.

What can tax losses be used to offset?

Both passive and active income - Income shelters that are available to investors include tax losses that investors can use to offset both passive and active income.

Anastasia wants to get her real estate license and bring together buyers and sellers. This means she will be involved in which of the following?

Brokerage - This describes the business of real estate brokerage, which brings together a buyer and seller and negotiates real estate transactions.

ABC Realty's qualifying broker just left. If a new broker is not identified within 14 days, what will happen?

Brokerage registration will be cancelled - After 14 days, brokerages that have lost their qualifying or principal broker must have a replacement broker fill the position or the brokerage's business registration is cancelled.

The difference between what an investor plans to make and spend and what actually happens is known as __________ risk.

Business

Which of the following is required to register a brokerage with the DBPR?

Business name and at least one licensed active broker

If your clients want to keep their interest rates lower than the going rate and have plenty for a down payment and closing costs, they may have enough funds to _______ the interest rate.

Buy down

How can a homeowner identify asbestos?

By hiring a certified asbestos consultant

Gregory has been bombarded with emails from a local real estate licensee. He keeps opting out of these emails, but they just keep coming. What federal law is the licensee possibly violating?

CAN-SPAM Act of 2003

Callie has sublet an apartment in Florida for the past four months this year and plans to continue to reside in Florida and apply for a Florida real estate license. Which of the following applies?

Callie is a resident of Florida and can apply for a Florida real estate license.

What is the definition of "before-tax cash flow"?

Cash flow before taking income taxes into account.

Cheyenne is selling the family farm on an installment contract. What is one advantage of selling the farm this way?

Cheyenne will pay less in capital gains taxes by receiving the proceeds from the sale over time, rather than in a lump sum.

It's Friday afternoon, and Lori can't make it to the bank in time to deposit an earnest money check in the brokerage's escrow account, so she uses her mobile app to deposit it into her personal checking account for safekeeping. What violation did Lori just commit?

Commingling

Which of these duties are owed by a designated sales associate, among others?

Confidentiality, obedience, loyalty, and full disclosure

The assessed value of a condominium is usually higher than a similar ________ because of outright ownership.

Cooperative - Because cooperatives are not owned outright, the assessed value of a cooperative typically is lower than that of a condominium.

Which penalty type has imprisonment as a potential outcome?

Criminal

Robert was found guilty of violating real estate law. A prison sentence was imposed on him by ___________.

Criminal court - Only criminal courts may impose prison sentences.

Gerard has been offered a 4% interest rate on a $300,000 mortgage. His monthly mortgage payment would run about $950 per month. He plans to pay $2,000 up front to drop his interest rate to 3.75% and his payment to $920 per month. What is this upfront charge called?

Discount points

Basic property rights include the rights of possession, control, exclusion, enjoyment, and ______.

Disposition - Disposition is the right to sell or convey property.

Kathryn and Donald have homesteaded their primary residence in Florida. The homestead is only titled in Kathryn's name. Under the Florida Homestead Law, if Kathryn dies, what happens to the property?

Donald receives a life estate to the property. - According to the Florida Homestead Law, Donald would receive a life estate to the property and any children would receive a remainder estate. This is an important protection for families.

Non-lawful possession after the expiration of a lease is called ______.

Estate at sufferance

When working with a seller, you sign a listing agreement that ensures you'll receive commission, provided the property sells during the listing term. What type of listing agreement did you sign?

Exclusive right to sell

The National ______ Housing Alliance has made recommendations for promoting diverse neighborhoods.

Fair

Mark is a buyer who wants to know which words in a deed make it clear that the property is being conveyed with the full bundle of rights. What words should Mark look for?

Fee simple

What does the income approach to value rely on when valuing properties that are five or more units?

Gross income multiplier - For five or more units, the gross income multiplier (GIM) would be used for the appraised value.

What is a code of ethics?

Guidelines for conduct

Which type of insurance must a buyer obtain if a mortgage is involved?

Homeowners fire and hazard insurance

Which of the following is true regarding the purchase of a condominium?

If the prospective buyer has the financial means to buy the condominium, neither the association nor the residents can block the purchase.

You're walking through a property with a new seller client. The seller tells you that the property is serviced by the public sewer system, but when walking up the drive you noticed the access hatch for a septic system. What should you do?

Inquire about the homeowner's claim to ensure the property really is on public sewer.

Applying a capitalization rate to the net operating income is one way to determine a property's ___________ value.

Investment

What is the name of a type of ownership where each person has the same percentage of ownership and the right of survivorship, but are not married?

Joint tenancy

Joe and Susie bought a house together before they were married. If Joe dies, Susie automatically inherits Joe's share of the house. What type of ownership is it?

Joint tenancy - Joe and Susie must be joint tenants because they are not married

The ______ usually represents the lender at a closing.

Lender's attorney

Pam is a partner in CRL Brokerage. Her liability is limited to the amount of money she has invested. What type of partner is Pam?

Limited

A title examiner has decided to limit the title search to the last 50 years. What type of title examination is this considered?

Limited search

While hosting an open house, Liza speaks with prospective buyers. They're interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?

Loyalty - Loyalty means putting the client's interests first

"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Jebediah Smith ..." is an example of what type of legal description?

Metes and bounds

Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing they did when they surveyed the new neighborhood was to reference what type of description first?

Metes and bounds description

Which of the following is a type of zoning action?

Moratorium

What is the restriction to deduct points on your taxes?

Must be primary residence

Ken understands the importance of interpreting market conditions. He has found that keeping track of how many new homes are being built in his area is a valuable indicator of demand. Which market indicator provides this information?

New building permits - The number of new building permits indicates how many new homes are being built. It is a good indicator of demand, because builders build when demand is high.

Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?

No. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values.

Which of the following statements is true about conventional loans?

Originators usually package and sell the loans on the secondary market. - Originators of commercial loans don't typically keep and service loans, although some do. Usually, they're packaged and sold on the secondary market.

Which occupancy type is eligible for a VA loan?

Owner-occupied

Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?

Partition

Licensee Dionne pointed out to her buyer client the items in the house she was showing that would be considered real property. One of the key determinants, she explained, was whether the item were ______.

Permanently affixed to the property

What might the government do if property owners fail to pay taxes on their property?

Place a lien on the property.

Adams County implemented a 10 p.m. curfew for youths under age 18 because of the high number of fights that have been occurring late at night in public places. Which of the following gives Adams County the right to restrict the movements of its minor citizens?

Police power

Your sales associate license document serves as ______ you have a valid and current license.

Prima facie evidence that

Which of the following is true about zoning?

Proposed zoning ordinances are examined for fairness before being enacted.

The Hendersons don't have enough money to make the full 20% down payment their lender requires. To close the sale, the seller is willing to finance a loan for the gap between the home's list price and the amount the institutional lender is willing to loan. What's this type of financing called?

Purchase money mortgage

The National Fair Housing Alliance has concerns about whether or not programs meant to address the financial and mortgage crisis are ______.

Racially fair - One of the NFHA's recommendations for the future of fair housing is to consider whether or not programs designed to address the financial crisis are racially fair and don't promote further segregation.

What type of real estate investment may meet the definition of being a security and must adhere to the rules and regulations of the Securities and Exchange Commission?

Real estate syndicate

Early in its history, the Federal Housing Administration officially supported keeping "incompatible" racial groups out of the newly developed white suburbs. This practice is known as ______.

Redlining

In 1934, when the Federal Housing Administration was created, it adopted the practice of crossing off cities and neighborhoods it considered risky and withheld mortgage funds from those areas. What is this action called?

Redlining

Gary and Anita applied for an exemption on their Florida homestead and it was denied. They do not agree with the decision. Which of the following should they do?

Request a conference with the county property appraiser.

What type of investment strategy is most similar to a 1031 tax-deferred exchange?

Rolling over funds from one IRA into another - The 1031 is similar to rolling over retirement funds because with the 1031, the investor rolls over the capital gains from the sale of one property into the purchase price of the next property, deferring (but not avoiding) taxes on that gain.

Which type of lender specializes in taking in savings deposits and then lending money out to consumers through mortgages and other loans?

Savings and loan

Licensee Quinn is working with seller clients, the Swans, who have found buyers. The property belongs to a homeowners association. Which of these actions must Quinn take?

She must provide the buyers with a disclosure statement that outlines the association's restrictions.

What type of capital gains may property owners encounter?

Short- and long-term

What is a consumer?

Someone who uses or purchases a product or service

Microscopic pieces of mold that float around in the air are called what?

Spores

Which of the following is the least specific method for describing a property?

Street address - An address is the least specific method for describing a property, which is why it is generally not acceptable as a legal description.

James represented a client who believes James was guilty of misrepresentation. The client files a complaint against James. Who or which entity will investigate?

The DBPR

Which agency applies the "target" designation to a dwelling and has set specific requirements for lead abatement and remodeling of these homes?

The EPA

Sam and Monique knew that the old industrial site that they purchased needed some environmental cleanup, but they don't have the cash and put cleanup on hold. The EPA hired its own crew to deal with groundwater issues because of industrial solvents and billed Sam and Monique $164,000 when the job was complete. If Sam and Monique don't pay the bill, which of the following could happen?

The EPA can seek damages in court for up to three times the actual cleanup costs. - If property owners refuse to pay cleanup costs as billed by the EPA, the EPA can seek damages of up to three times the original costs.

What's the name of the Florida act that specifies accessibility standards for the disabled?

The Florida Americans with Disability Accessibility Implementation Act

Which of the following kicks off events that could lead to foreclosure?

The borrower doesn't make their mortgage payment

Marcy's offer on a home was accepted! Which party will be contacting her about arranging an appraisal?

The lender

The Commercial Real Estate Sales Lien Act allows brokers to place a lien on ______ in order to collect unpaid commission?

The seller/owner's net profits from the transaction

You're talking to a co-worker at lunch and she mentions she has a box of baby clothes her kids have outgrown that she needs to get rid of. You have a baby on the way, so you offer to pay her $25, and she agrees to bring the box to work the next day and give it to you. Which of the following is true in this situation?

This is an express contract because you defined in words the specific terms of the agreement and consideration to be exchanged.

Many real estate contracts contain the phrase ______, reminding the parties to avoid unnecessary delays to the transaction and to adhere to all contract dates.

Time is of the essence

Which of the following is a recommended way for listing agents to use the MLS?

To advertise their listings - Real estate licensees use the MLS in many ways. One of the most important of these is to advertise their listings.

What's the purpose of the title search?

To collect evidence that the title is a marketable title, meaning it's clear and free of encumbrances

Why does the closing agent review the purchase contract?

To gather closing-related information agreed to in the contract

What's an agent's responsibility related to home inspections?

To recommend a buyer have a professional inspection performed

Which of the following describes a contract that exists based not on words, but on the parties' actions or behaviors?

implied

The Clean Water Act regulates pollutants in U.S. waters and establishes quality standards for ______.

surface waters

Which document provides the buyer with data about the property's title record, legal description, and other matters that may need to be acted upon in order to obtain a marketable title?

title report