RE Final Exam Questions/Answers

Each of the following is considered a triggering term, EXCEPT:

Assumable Mortgage

What term is used for a person who has been given power of attorney to act for another person?

Attorney-in-fact

Which concept of value pertains to appraisals of profitable business enterprises or opportunities?

Going concern

Which of the following is not a primary lender?

Government National Mortgage Association

Surety Bond

A guarantee that protects a business when another person or business fails to fulfill the terms of a contract between them

Which clause in a mortgage limits the lenders rights in a foreclosure to the amount received from the sales proceeds and prohibits the lender from seeking a deficiency judgment?

Exculpatory clause

Each of the following is a valid form of co-ownership, EXCEPT:

Estate in severalty

The Chairperson of the Florida Real Estate Commission acting alone may exercise which powers?

Executive

In which type of lease does the tenant pay a fixed rent while the lessor pays all the real estate taxes, insurance, and maintenance?

Gross lease

Which type of business organization may be registered as a real estate brokerage?

Limited partnership

Buyer and Seller have entered into a contract for the sale of a duplex. The buyer defaults on the contract and the seller claims the escrow deposit per contractual agreement. What term applies to this situation?

Liquidated damages

The value of a business that is falling and not expected to continue would best be determined using which valuation method?

Liquidation value

What is the price of state documentary stamp tax on the deed for property that is located outside of Dade County?

0.70 cents per hundred dollars of sales price

FHA housing expense ratio and total obligations ratios, correspondingly, cannot exceed which of the following limits?

31% and 43%

In a township, which section is two sections west of Section 10?

8

Property taxes are $4,200 per year. The closing is April 20th and the closing day is charged to the buyer. Using the 365-day method, how will the proration of property taxes show on the closing statement?

?

Which statement about the real estate brokerage office is true?

A brokerage branch office may be closed and reopened at the same location during the same license period by requesting a reissue.

All of the following statements are correct regarding a Planned Unit Development (PUD), EXCEPT:

A buyer may void a sales contract within 3 days if the required disclosure was not provided.

Which statement best describes a void contract?

A contract that cannot be enforced and cannot be performed under the law.

Which statement is correct concerning a property held in an estate by the entireties?

A divorce terminates the estate and a tenancy in common

Which of the following may be used to cure a defect in title to real property?

A quitclaim deed

fiduciary relationship

A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent.

Which statement is correct concerning agency relationship?

A special agent is only authorized to perform single act on behalf of the principal

What is a special assessment?

A tax levy that is used to pay for public improvements that add value to the property.

What is the opposite of erosion?

Accretion

Three individuals form a brokerage partnership. If each of the partners intends to provide real estate services to others, which statement would be correct?

All three partners must be licensed as active brokers (ojo)

Frank has no real estate license, but has been acting as a broker and collecting commissions for arranging sales transactions. If the Department wishes to take action against this individual they may issue all of the following, EXCEPT:

An injunction They could issue: citation, a cease and desist order, and an administrative fine.

A homeowner receives a property tax assessment for 2020. When does the property tax become delinquent?

April 1st, 2021

What is the name for the number that is assigned by the county property appraiser's office to each individual property?

Assessor's parcel number

How may contractual rights be transferred from one person to another?

Assignment

Which statement is correct concerning a corporation registered to broker real estate?

At least one officer must be an active broker.

Which item will show as a credit to the buyer on a closing statement?

Binder deposit

What term refers to the illegal practice of inducing homeowners to list or sell their property by telling them that minorities are moving into their neighborhood?

Blockbusting

A broker gave permission for a real estate sales associate to deal directly with the broker's principal. Which statement correctly applies?

Both the broker and sales associate have a fiduciary relationship with the principal

Clarence made a written offer of $78,000 on Dan's home that was listed with Broker Alice. Before the offer could be presented, Larry arrived at Alice's office and made an offer of $82,000 on the same property but did not give an earnest money deposit. Alice promised Larry that she would submit the oral offer but only presented the written offer to Dan. Which statement is correct?

Broker Alice should have disclosed the details of the oral offer of Dan when she submitted Clarence's written offer of $78,000.

What is the name for a person who has passed the state broker license examination but continuous to be employed by an actively licensed real estate broker?

Broker associate

These are all remedies for breach of a real estate contact between a buyer and a seller, EXCEPT:

Claim from the Real Estate Recovery Fund

A business known as the XYZ Company is legally formed as what type of business?

Corporation for profit.

Which approach to value would most likely be selected to determine the value of the County Court House?

Cost Depreciation (ojo)

How is prepaid interest on a purchase money mortgage shown on a closing statement?

Debit buyer, credit seller

When estimating depreciation of an improvement, which age will the appraiser use?

Effective age

A city is in need of additional land for a new school. What right would the city have to acquire the land, even over the objections of the property owner?

Eminent Domain

Which Act requires lenders to judge loan applicants on the basis of credit rating, income, expenses and assets without regard to their age, race, religion, sex, marital status, or nationality?

Equal Credit Opportunity Act

After defaulting on mortgage payments but prior to foreclosure, the mortgagor has the right to redeem his or her interest in the mortgaged property by paying the money owed the lender. What term is used for this right?

Equity of redemption

A sales associate has decided to concentrate on trying to obtain listings from a particular neighborhood. The associate believes this should increase knowledge of the market and improve the likelihood of success. Which term refers to approach to the real estate business?

Farming

Francine has been licensed as a sales associate for 3 years. She now wishes to obtain her broker license. Which is correct regarding broker licensing requirements?

Francine most complete the 72 hour broker pre license course and have been active for at least 24 months within the past 5 years.

Fred, a licensed sales associate, was registered with Broker Harry when he claimed that Harry had failed to pay a sales commission due him. If Fred resigned and was employed under Broker Norman before the dispute was resolved, which statement would be correct?

Fred cannot bring a legal action for the claimed commission against anyone other than Harry.

What does an over-improved property suffer from?

Functional obsolescence, because it will not sell in the market for the amount invested.

Which of the following is a possible disadvantage of investing in real estate?

Illiquidity occurs when a security or other asset that cannot easily and quickly be sold or exchanged for cash without a substantial loss in value.

If a sales associate Sherri receives an offer to purchase a listed property which is accompanied by an post-dated check, what should she do?

Immediately give the check to her employing broker.

What is a brokers proper course of action when they have listed a property and found that the title to the property is NOT merchantable?

Immediately notify the owner regarding the condition of the title

What type of contract has been created if some of the terms and conditions must be inferred from the acts or conduct of the parties?

Implied

Which stamp applies to a new mortgage but NOT to an assumed mortgage?

Intangible tax

John recently purchased a home from Mary. Mary had owned and lived in the home for several years and had qualified for and filed for all allowable tax exemptions. Which statement is true?

John's taxes will be higher than Mary's because the limitation on taxes created by the Save Our Homes Act will be eliminated.

Three sisters buy a home. They each have equal portions of possession, interest, time, and title. They decide that upon death, the survivor will acquire their shares. What type of tenancy exists?

Joint Tenancy

What type of relationship has been formed if two or more parties agree to combine their efforts for a single business transaction?

Joint venture

When a loan is fully repaid, the lender will provide the mortgagor with which document?

Letter of satisfaction

In a lien theory state, who holds title to mortgaged real property?

Mortgagor

An owner-developer may employ a sales associate to perform real estate services for property belonging to the owner-developer. What are the registration and real estate licensing requirements for an owner-developer?

Must be registered, but not licensed

What should a broker's initial action be when entertaining doubt as to which person is entitled to the delivery of escrowed property?

Notify the Florida Real Estate Commission in writing

What is required in order to create a valid real estate sales contract?

Offer and acceptance must be communicated by each party to the other.

If an owner of real property gave another party the right to buy his or her property for a fixed price at any time during a specific time period, what type of agreement was created?

Option to contract

A homeowner in a neighborhood with homes valued in the $100,000 range adds an in-ground pool at cost of $75,000. This is an example of which of the following?

Over improvement

All of the following statements are correct regarding the Americans with Disabilities Act, EXCEPT:

Owners of existing properties must make all necessary modifications of their properties to bring them into compliance without regard to the cost of such modification.

Which real property identifier is assigned by the county property assessor to uniquely identify a property?

Parcel number

Which term refers to the primary reference point in a metes and bounds legal description of real property?

Point of beginning

The concept that states that an informed buyer will pay no more for a property than the cost of acquiring another equally desirable property with the same or equal utility is based upon which of the following?

Principle of substitution

Which document specifies the amount of the mortgage loan, the interest rate, loan term, and repayment schedule?

Promissory note a debt instrument that contains a written promise by one party (the note's issuer or maker) to pay another party (the note's payee) a definite sum of money, either on-demand or at a specified future date.

Which type of deed would be best to convey property from the standpoint of the grantor?

Quitclaim

Which federal law requires that borrowers be informed of all settlement costs involved in the purchase of a home when funds are obtained from a federally regulated lender?

Real Estate Settlement Procedures Act

Which term refers to the physical land and improvements as well as intangible ownership interest and rights?

Real property

What rights does an owner have whose property borders a river?

Riparian

Which lines are correctly identified as general or specific?

Specific liens: Construction lien, Mortgage lien

Which statue stipulates the time periods during which a party may sue for the enforcement of a contract?

Statue of Limitations

Certain contracts need to be in writing to be enforceable. A contract that transfers an interest in Real Property must be in writing. Which of the following dictates this requirement?

Statute of Frauds

What type of tenancy is formed by a written agreement that creates a non-freehold estate in real property providing occupancy of the property for a specific time period?

Tenancy for years

Three persons own a parcel of property with equal rights of use and possession. They have equal interest and acquired their interests by the same or different deeds. What type of ownership did they acquire?

Tenancy in common

When a sales contract for residential real property includes the "as is" provision, which statement correctly applies?

The "as is" provision does not excuse or circumvent the duty to disclose material defects.

A real estate licensee working with a seller in limited representation received a telephone call from another real estate agent working with the buyer. The agent's opening comments state the following. "Hi, this is Robert Dawson, with East Side Realty. I am standing in front of a house that has your name on the listing sign and I am with my principal. I have a few questions to ask you about the property." Based on the buyer's agent's comment, what should the licensee working with the seller conclude?

The agent representing the buyer is in a single agency relationship.

An applicant for a real estate license was denied by the department, which statement is correct regarding this denial?

The applicant must be notified in writing of the reason for the denial and advised of the right to request a formal hearing.

A listing broker is employed to find a purchaser and produces a full cash offer that meets the seller's terms. The seller refuses to accept the offer because he doesn't like the buyer. Which condition exists?

The broker is entitled to compensation since he produced a buyer who met the seller's terms for sale.

Which statements correctly applies to a real estate broker who represents both parties as a single agent in transaction?

The broker is in violation of Florida Statue 475

A landlord may commingle tenants' security deposits with other business funds under which conditions?

The landlord posts a surety bond.

All of the following statements are true regarding a broker's office, EXCEPT:

The office can be located in a motor home provided the letterheads and advertising of the firm properly disclose it as an office.

A sales contract called for a $10,000 secondary deposit to be paid by June 1st. The sales associate forgot to collect the deposit. Which statement correctly applies to this situation?

The sales associates may be charged with culpable negligence

Which institutions in the state of Florida are approved depositories for earnest money?

Title companies, banks, savings and loan associations, credit unions.

A homeowner defaults on the mortgage. The homeowner owes the lender $200,000. The home is sold at public auction and the sale produces $240,000. Where does the surplus amount of the. alcance due on the promissory note go?

To the mortgagor (homeowner)

Which statement correctly identifies the loan type with its function?

VA guarantees loans.

Sally received her initial sales associate license on July 19, 2020 with an expiration date of March 31, 2022. What is the status of her license if she does not complete a 45-hour post-license course prior to expiration?

Void

Lien Theory State

a state where the mortgage lender has a lien on the property and the borrower has title

These are all requirements for valid instruments of deed conveyance:

• Consideration • Voluntary delivery and acceptance • Description of the property