Combo with "Final Exam Prep" SET MAIN

In general business dealings, which type of agent is authorized by the principal to perform acts related to a certain business or to employment of a particular nature? General, Special, Universal, Subagent

General. A general agent is authorized by the principal to perform only acts related to a business or to employment of a particular nature.

Which entity is a guarantor of mortgage-back securities?

Ginnie Mae (GNMA) serves as a guarantor of mortgage-backed securities

The Consumer Credit Protection Act:

Gives a consumer the right to rescind a mortgage secured by his homestead

The Truth In Lending Act:

Gives a consumer the right to rescind a mortgage secured by his homestead

The Tax Reform Act of 1997:

Excludes up to $250,000 of capital gain tax on sale of a principal residence if you are single

Tax advantages of homeownership do NOT include... -a tax deduction of property taxes paid. -up to $10,000 in penalty-free withdrawals from an IRA if used as a down payment on a personal residence for first-time home buyers -exclusion of gain from the sale of a principal residence up to $500,000 for a single adult. -a tax deduction of the interest paid on a home equity loan that does not exceed $100,000.

Exclusion of gain from the sale of a principal residence up to $500,000 for a single adult. The IRS allows an exclusion of up to $250,000 of gain ($500,000 for married couples filing a joint return) realized on the sale of a principal residence.

The most advantageous type of listing to a real estate licensee is:

Exclusive right of sale

What type of listing is given to a broker in which commission is promised to the listing broker, provided the owner does NOT find the buyer? -Exclusive-agency listing -Exclusive-right-to-sell listing -Open listing -Implied listing

Exclusive-agency listing. A seller gives an exclusive-agency listing to one broker who handles the transaction. The seller reserves the right to sell the property without paying a commission.

When all parties to a contract have completely performed all obligations and promises contained in the contract, what type of contract is it? -Unilateral -Executed -Executory -Express

Executed. When all parties to a contract have completely performed all the obligations and promises contained in the contract, it is considered a executed contract.

The Commission's authority to regulate and enforce the license law is which type of power? Quasi-legislative, Quasi-judicial, Civil, Executive

Executive. The executive powers to regulate and enforce the license law are delegated to the Commission by the Florida legislature.

Which brokerage relationship duty applies only to a transaction broker relationship? -Deal honestly and fairly -Account for all funds -Full disclosure -Exercise limited confidentiality

Exercise limited confidentiality. Full disclosure is a single agent duty. Dealing honestly and fairly and accounting for all funds apply to all three disclosure relationships. Exercising limited confidentiality is a brokerage relationship duty unique to transaction broker relationships.

The value of an established business property, compared with the value of just the physical assets of a business that is NOT yet established, is referred to as... -going concern value. -goodwill. -business enterprise. -tangible assets.

Going concern value. Going concern value is the value of an established business compared with the value of just the physical assets of a business that is not yet established.

Which type of value is associated with an income-producing property that has been operating successfully for some time? -Insurance -Investment -Liquidation -Going concern

Going concern. Going concern value is the value of an income-producing property characterized by a significant operating history.

Which document must a prospective buyer of an existing (resale) condominium unit receive?

Governance Form summarizes board of directors and the rights of the unit. At resale, buyer entitled to copy of declaration of condominium, articles of incorporation, bylaws, rules of assoc, FAQ, copy of most recent year end financial statement and GOVERNANCE FORM

What term is used to describe fractional pieces of land less than a full quarter section located along the banks of lakes and streams? -Check -Partial section -Government lot -Government section

Government lot. A government lot is composed of fractional pieces of land less than a full quarter section located along the banks of lakes and streams.

Which method of legal description was NOT used in the original 13 colonies? -Metes-and-bounds -Government survey method -Monuments -All of these methods were used in the original 13 colonies

Government survey method. The government survey method was commissioned in the 30 states other than the original 13 colonies and few other states.

Members of the Florida Real Estate Commission are appointed by the... -Governor -Director of the Division of Real Estate -Secretary of the Department of Business and Professional Regulation -Florida Senate

Governor. FREC members are appointed by the Governor, subject to confirmation by the Florida Senate.

Define erosion.

Gradual loss of land due to natural forces.

Define reliction.

Gradual receding of water, uncovering additional land

Which clause in a deed contains the necessary words to convey title? -Seizin -Habendum -Granting -Premises

Granting. The granting clause contains the necessary words used to convey the property.

A deed is signed by:

Grantor and two witnesses

The ratio between a property's gross monthly income and its selling price is known as:

Gross rent multiplier

When a person dies intestate with no heirs:

His real estate passes to the Florida government through a process called escheat

Consumers sometimes use which type of loan to purchase big ticket items because of the deductible interest feature? -Consumer credit loan -Package loan -Personal line of credit -Home equity loan

Home equity loan. The interest on most home equity loans is tax deductible.

The constitutional homestead law protects real property from forced sale to satisfy which type of delinquent debt?

Homestead property is exempted from forced sale to satisfy judgement liens for debts owing to personal loans, CREDIT CARD DEBT, etc. Homestead protection does not prevent foreclosure for nonpayment of property taxes, special assessments, mortgages, vendors' liens, or construction liens secured with homestead property.

Which of the following comes from The Florida Constitution:

Homestead rights

Which of the following comes from The Florida Constitution?

Homestead rights

When the government exercises the power of eminent domain, which of the following statements is not true?

Homestead will protect a widow from eminent domain

One person or a group of persons occupying a separate housing space is technically defined as a... -unit. -household. -family. -multiple ownership unit.

Household. A household, as defined by the Bureau of Census, is any person or group of persons occupying a separate housing space.

The overall capitalization rate (OAR) is determined by analyzing which two components of similar properties in the subject property's market area?

I = R x V NOI = Cap Rate x Value (sale price) NOI and Sale Price

In which way does state government influence the real estate business? Property taxation, Occupational, licensing, Identification of coastal regions, Zoning

Identification of Coastal Regions. Property taxation, occupational licensing, and zoning are local government influences.

A case is heard before an administrative law judge in a formal hearing. In such cases, who renders the final order? -Administrative law judge -DBPR secretary -FREC ( with members who served on the probable-cause panel excused) -Attorney general

FREC (with members who served on the probable-cause panel excused) issued the final order. In matters heard by an administrative law judge in a formal hearing, the FREC reviews and considers the administrative law judge's findings and recommended order before issuing its final order.

Attorneys who are active members in good standing with The Florida Bar are exempt from which education requirement? -FREC Course I for sales associates -45-hour post-licensing education for sales associates -FREC Course II for brokers -Sales associate state license exam

FREC Course I for sales associates. Attorneys who are active members of The Florida Bar are exempt from FREC Course I. Active members in good standing with The Florida Bar are also exempt from the continuing education requirement for real estate licensees. Attorneys are not exempt from the state license examinations for sales associates and brokers, the post-license requirements, ofr from FREC Course II.

A broker who fails to pay an earnest money deposit at the title closing in accordance with the contract for sale and purchase may be charged with which offense? -Commingling -Moral turpitude -Failure to account for and deliver -Breach of contract

Failure to account for and deliver. Failure to account for and deliver is the act of failing to pay money to a person entitled to receive it.

Which statement concerning Department of Veterans Affairs (VA) mortgage loans is FALSE?

False - All VA mortgage loans contain a due on sale clause

T-intersection lots are a type of corner lot. True or False?

False. A T-intersection lot is in interior lot that suffers from its location at the end of a T-intersection. T-intersection lots face an oncoming street.

A contract for deed is a method of buying a property in a single lump sum. True or False?

False. A contract for deed is a method for buying real property, usually with very little cash investment. The seller accepts a down payment from the buyer and finances the rest of the purchase price.

Complaint resolution for homeowner associations is provided by which division of Florida government?

Division of Florida Condominiums, Timeshares, and Mobile Homes is charged with providing complaint resolution for HOAs.

A corporation sole is permitted to register as a real estate broker. True or False?

False. A corporation sole cannot be registered as a real estate broker. A corporation sole is an ecclesiastical or church organization, usually headed by a bishop or other clerical official who has been empowered by a church to hold title to church property. Before dealing with a corporation sole, a broker should obtain a written opinion from an attorney who has experience in such titles.

A fixture is defined as an item of personal property temporarily affixed to real property with the intention that it be moved at a later date. True or False?

False. A fixture is an item of personal property converted to real property by attaching it to the real property with the intention that it becomes permanently a party thereof.

As defined b the Census Bureau, a household consists of at LEAST two persons occupying a separate housing space. True or False?

False. A household, as defined by the Bureau of the Census, U.S. Department of Commerce, is any person or group of persons occupying a separate housing space.

A real estate sales associate whose license was expired at the time time of performing real estate service must renew the license prior to the title closing in order to lawfully receive compensation for the transaction. True or False?

False. A licensee may not practice real estate with an expired license. A broker or sales associate who does so is committing an unlawful act. The license must be active at the time the real estate services are performed.

A person appointed by a court of law to sell real estate must be a licensed real estate broker. True or False?

False. A person appointed by a court of law to sell property is exempt from licensure.

An agency relationship between a principal and broker may be terminated by the principal for any reason. True or False?

False. A principal is not free to revoke an agency relationship in all circumstances. The principal may revoke and agency if the agent breaches one or more of the fiduciary duties. Several other events could terminate a agency relationship, such as the fulfillment of the agency's purpose, mutual agreement to terminate the agency, or bankruptcy of the principal.

A resident licensee who becomes a nonresident must notify the Commission within 45 days of the change in residency and comply with all nonresident requirements. True or False?

False. A resident licensee who becomes a nonresident must notify the Commission within 60 days (not 45) of the change in residency and comply with all nonresident requirements.

A nonconforming use is the permission to build or use in apparent conflict with existing zoning ordinance. True or False?

False. A special exception is the permission to build or use in apparent conflict with existing zoning ordinance. A nonconforming use is the permission to continue to use in spite of an enacted zoning ordinance.

The FREC may issue a summary suspension when a licensee's actions endanger the public. True or False?

False. A summary suspension (or emergency suspension) must be issued by the DBPR Secretary or a legally appointed designee of the Secretary.

A tenancy at will is said to exist when the tenant, after rightfully being in possession of the rented premises, continues possession after the tenant's right has ended. True or False?

False. A tenancy at will is a leasehold estate in which the tenant holds possession of the premises with the owner's permission but without a fixed term. A tenancy at sufferance exists when the tenant, after rightfully being in possession of the rented premises, continues possession after the tenant's right has ended.

A transaction broker is a broker who provides representation to a buyer, a seller, or both in a real estate transaction, and who represents either the buyer or seller in a fiduciary capacity or as a single agent. True or False?

False. A transaction broker is a broker who provides limited representation to a buyer, a seller, or both, but who does not represent either in a fiduciary capacity or as a single agent.

A license application is NOT required to disclose a prior criminal conviction if adjudication was withheld. True or False?

False. A withhold of adjudication of a criminal offense must be disclosed on the license application.

Ad valorem means according to cost. True or False?

False. Ad valorem means according to value. Real estate taxes (commonly called property taxes) are based on the value of real property, hence the term ad valorem tax.

The Florida Real Estate Commission possesses the authority to sentence a licensee to imprisonment. True or False?

False. All imprisonment penalties must be obtained in a court of law because the Commission lacks the authority to assess such penalties.

The Florida Real Estate Commission consists of seven members, four of which have never been brokers or sales associates. True or False?

False. Among the seven members of the Commission, only two must be consumer members who have never been brokers or sales associates.

The primary appeal of an adjustable-rate mortgage (ARM) is a lower interest rate over the life of the loan. True or False?

False. An ARM offers a lower initial interest rate, but over the life of the loan an ARM's rate can rise considerably higher than the initial rate.

A comparative market analysis (CMA) must conform to the Uniform Standards of Professional Appraisal Practice (USPAP). True or False?

False. An appraisal report, not a CMA, must conform to the USPAP. A comparative market analysis (CMA) is an informal estimate of market value performed by a real estate licensee for the seller to assist in arriving at an appropriate listing price, or if working with the buyer, and informal estimate of market value to assist the buyer in arriving at an appropriate offering price.

An ostensible partnership may be registered as a real estate brokerage entity. True or False?

False. An ostensible (or quasi partnership) is considered to be fraudulent and deceitful if the public is deceived into believing that a partnership exists.

Appealing a final order stops the enforcement of any penalty stipulated in that order. True or False?

False. Appealing an order does not stop enforcement of the penalty. If the penalty would suspend or revoke a license, however, the court will normally grant supersedes (stay suspension) as a matter or right on conditions considered reasonable.

As occupancy rates increase, rental rates tend to decrease. True or False?

False. As occupancy rates increase, rental rates tend to increase, and apartment dwellers who have been waiting to buy homes of their own are given impetus to start looking for houses for sale and move out of apartments.

Broker applicants are required to fulfill an experience requirement of at least 36 months of real estate experience during the five-year period proceeding their becoming licensed as brokers. True or False?

False. Broker applicants are required to fulfill an experience requirement of at least 24 months of real estate experience during the five-year period preceding their becoming licensed as brokers.

Zoning ordinances protect the public health and safety from inferior construction practices. True or False?

False. Building codes protect the public health and safety from inferior construction practices. Zoning ordinances authorize segmentation (dividing) of a community into districts or zones in keeping with the character of the land and structures and with their suitability for particular uses and uniformity of use within each zone.

Weather heads are used to protect an electric circuit from damage caused by too much current. True or False?

False. Circuit breakers are used to protect and electric circuit from damage caused by too much current. A breaker will trip (shut off) if the circuit is forced to carry more current than the wire can handle. Inside the breaker is a tripping mechanism that will not allow the breaker to be reset unit the wire has cooled. The weather head attached to the utility service cable and prevents water damage to the wiring.

State-chartered commercial banks must display the word "National" somewhere in their name. True or False?

False. Commercial bank chartered by the federal government must display the word "National" or the initials "N.A." somewhere in their name.

Confidential information learned during the course of the single agency cannot be divulged by the broker until the transaction has concluded and the agent-principal relationship had ended. True or False?

False. Confidential information learned during the course of the single agency cannot be divulged before or after the transaction had concluded and the agent-principal relationship has ended.

Constructive notice is direct knowledge acquired in the course of a transaction. True or False?

False. Constructive notice refers to information that has been made public by recording the information in the public records.

Cost can be defined as the amount of money for which a good is actually sold. True or False?

False. Cost is the total expenditure required to bring a new improvement into existence plus the cost of land. Prince refers to the amount of money (Or its equivalent) for which a good is actually sold.

An apartment building produces an effective annual gross income of $71,820. If the annual operating expenses amount to $36,990, and a prospective investor insists on at least a 12 percent overall rate of return, what is the maximum amount the investor should pay for the property?

EGI - OPEX = NOI I = RV 71,820 - 36,990 = 34,840 NOI 34,840 / .12 = $290,250 max purchase price

Which mortgage clause requires the lender to waive the right to a deficiency judgment against the borrower, relieving the borrower of personal liability to repay the loan?

EXCULPATORY CLAUSE is a provision in a mortgage or note in which the lender waives the right to a deficiency judgement against the borrower and the borrower is relived of personal liability to repay the loan.

Deposit accounts are insurance to $100,000 per depositor in each bank or thrift the FDIC insures. True or False?

False. Deposit accounts are insured to $250,00 per depositor in each bank or thrift the FDIC insures. The coverage limit will return $100,000 (except for IRAs), effective January 1, 2014.

Dynamic risk can be transferred to an insurer. True or False?

False. Dynamic risk arises from the continual change in the business environment and therefore dynamic risk cannot be transferred to an insurer.

Each 24-by-24-mile square created by intersecting guide meridians and corrections is called a quadrant. True or False?

False. Each 24-by-24-mile square created by intersecting guide meridians and corrections is called a check, not a quadrant.

Each township contains 6 sections. True or False?

False. Each township contains 36 sections.

Which law protects applicants from discrimination based on whether they receive income from public assistance programs? -Fair Housing Act -Consumer Credit Protection Act -Real Estate Settlement Procedure Act -Equal Credit Opportunity Act

Equal Credit Opportunity Act. The Equal Credit Opportunity Act ensures that financial institutions and firms engaged in extending credit will make credit available without discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance programs.

The gradual loss of land associated with moving water and/or wind is referred to as... -accretion -riparian -erosion -reliction

Erosion. Erosion is the gradual loss of land due to natural forces, such as from moving water and/or wind.

The right of the state to take property of a person who died intestate and without heirs is known as

Escheat

A real estate licensee who enters into a transaction broker relationship must give the customer a transaction broker disclosure notice. True or False?

False. Effective July 1, 2008, licensees are no longer required to give customers a written disclosure notice when a transaction broker relationship is chosen.

The Federal Housing Administration regulates interest rates. True or False?

False. FHA does not regulate interest rates. Lenders set their own interest rates for FHA-insured loans to reflect market conditions

If escrow funds are held by a title company, the broker is under no obligation to deliver the funds to the title company within three business days. True or False?

False. FREC rules require that the broker request a written receipt from the attorney or title company. The purpose of the receipt is to document that the funds were delivered to the escrow agent by the end of the third business day.

The Uniform Standards of Professional Appraisal Practice are standards of practice that must be followed by appraisers but NOT real estate licensees. True or False?

False. Florida law required appraisers, real estate brokers, and sales associates to abide by the Uniform Standards of Professional Appraisal Practice when conducting appraisals of real property.

The purpose of Florida's Green Belt Law is to protect coastal property from commercial development. True or False?

False. Florida's Green Belt Law was designed to protect farmers from having taxes increased just because the land might be in the path of urban growth and therefore well suited for development.

Follow-up refers to returning phone calls to prospective buyers in a timely manner. True or False?

False. Follow-up what a sales associate does for buyers and sellers after the sale (closing) to promote customer loyalty.

A disadvantage of investing in real estate is that real estate does NOT keep pace with inflation. True or False?

False. Historically, real estate values have increased at a higher pace compared with inflation as measure by the Consumer Price Index (CPI). Property appreciation is an advantage of investing in real estate.

Floridians who homestead their residence and who reside on the property as their permanent legal residence are eligible for a $50,000 homestead tax exemption from city, county, and school board taxes. True or False?

False. Homeowners are entitled to a $25,000 homestead exemption from the assessed value of the home for city, county, and school board taxes. Homesteaders with assessed value greater than $75,000 are entitled to an additional $25,000 tax emption from city and county taxes only. Homesteaders with assessed values between $50,001 and $75,000 receive a prorated amount of exemption in addition to the $25,000 base exemption.

A single person dies without a will. After a period of time, the state of Florida obtained title to the property of the deceased person. What power entitled the state government to acquire the deceased person's property. -Eminent domain -Adverse possession -Escheat -Foreclosure rights

Escheat. Escheat provides for a government, normally a state government, to take the property of an owner who dies intestate and without any known heirs entitled to receive the property.

What is an implied contract?

Established by the acts and conduct of the parties

Title to real property does NOT convey in which type of estate? -Freehold estate -Estate in severalty -Life estate -Estate for years

Estate for years. An estate for years is a leasehold estate that is created by a written lease agreement. An estate for years establishes an interest in real property for the tenant (right to use, possession, and exclusion) but does not convey actual title (or ownership).

When a broker's license is revoked, the licenses of the sales associates registered under the broker will be automatically suspended. True or False?

False. If a broker's license is suspended or revoked, the sales associates' license will be automatically placed in involuntary inactive status. A sales associate's license is retuned to active status as soon as a new broker is chosen and the information is filed with the DPPR.

If a home sells for $225,000, the documentary stamp tax on the deed will be $787.50.

False. If a home sells for $225,000, the documentary stamp tax on the deed will be $1,575. $225,000 divided by $100 = 2,250 taxable increments. 2,250 x $.70 = $1,575.

Negative leverage occurs when the benefits from borrowing exceed the cost of borrowing. True or False?

False. If the benefits from borrowing exceed the cost of borrowing, it is called positive leverage. If the borrowed funds cost more than they are producing, it is called negative leveraged.

The Civil Rights Act of 1866 was overturned by the U.S. Supreme Court in the Jones v. Mayer case. True or False?

False. In 1968 the Jones v. Mayer case upheld the Civil Rights Act in 1866.

Real estate professionals who specialize in the sale, purchase, and lease of businesses must hold a commercial license. True or False?

False. In Florida, an active real estate sales associate or broker license is required to market business opportunities. No license distinction is made regarding the type of real estate.

An option contract is a bilateral contract. True or False?

False. In an option contract, the owner (optionor) is bound to perform the terms of the option if required to do so by the optionee. The optionee, however, may elect to walk away from the deal because he option contract grants the optionee a right, not an obligation to buy the property.

A person who gives or delegates authority to another in referred to as an agent, while the person who accepts the authority is referred to as the principal. True or False?

False. In fact, the opposite is true: a person who gives or delegates authority to another is referred to as the principal, while the person who accepts the authority is the agent.

Chapter 475, F.S. defines the category of commercial properties as "any interest in business enterprises or business opportunities." True or False?

False. It is the category of business opportunities that Chapter 475, F.S. defines as "any interest in business enterprises or business opportunities."

Land refers NOT only to the surface of the earth but also to all improvements permanently attached to the land, such as homes, fences, and sewers. True or False?

False. Land does not include improvements permanently attached to the land, though it does include everything attached to it by nature. Real estate refers to land and all improvements attached to the land.

The Florida Residential Landlord and Tenant Act mandates that landlords pay tenants interest on their security deposits. True or False?

False. Landlords are obligated to account for deposits and advance rents in one of three ways. One way allows the landlord to hold the money in a separate non-interesting bearing and not commingle, hypothecate (pledge as security for a debit), or use the funds unit due to the tenant.

Each member of the Florida Real Estate Commission is account to the Department of Business and Professional Regulation. True or False?

False. Members of the Commission are accountable to the governor, not the Department of Business and Professional Regulation.

Mortgage loan originators create loans with either their own funds or money borrowed from financial institutions. True or False?

False. Mortgage lenders (mortgage broker companies) originate loans with either their own funds or money borrowed from financial institutions. The role of the mortgage loan originator is limited to acting as an agent. A mortgage loan originator submits loan applications from prospective borrowers to various mortgage banker companies and other lenders unit the loans are approved or abandoned. If a loan application is approved, the mortgage loan originator earns a negotiated loan origination fee and drops out of the loan transaction.

A sales associate who works part time for two different real estate offices may be issued multiple licenses. True or False?

False. Multiple licenses are issued to brokers who qualify as the broker for more than one business entity. Because a sales associate or broker associate may register under only one employer at a time, neither a sales associate nor a broker associate may hold multiple licenses.

Age is s protected class under the Fair Housing Act. True or False?

False. Protected classes under the Fair Housing Act include race, color, religion, sex, national origin, familial status, and handicap status.

Replacement cost is the amount of money required to build an exact duplicate of the structure. True or False?

False. Replacement cost is the amount of money required to replace a structure having the same use and functional utility as the subject property, but using modern, available, or updated materials. Reproduction cost is the amount of money required to build an exact duplicate of the structure.

MOST residential and office building leases are variable leases. True or False?

False. Residential and office building leases are typically gross leases. Variable leases are usually tied to and index, such as the consumer price index (CPI).

Real estate schools are permitted to offer refunds to students who fail their licensing exams. True or False?

False. Schools are prohibited from offering refunds to students who fail their exams.

Special assessments are levied according to the value of a property. True or False?

False. Special assessments are a one-time tax levied on properties to help pay for some public improvement that benefits the property. Special assessments are not as valorem taxes - they are not levied according to the value of a property. Usually, special assessments are levied on a front-foot basis for items such as sidewalks and street paving. They are often levied on a per hookup basis for utility and sewer improvements.

When a wronged party in a breached contract sued for compensatory damages, it is to have the courts force the other party to perform as the contract specifically states. True or False?

False. Specific performance is when an injured party sues o have the courts enforce the terms of a contract. A suit for compensatory damages is a suit that seeks money damages.

Step 2 in protesting a property assessment is court litigation. True or False?

False. Step 1 is seeking an adjustment by contacting the county property appraiser or a representative of that office; step 2 is filing an appeal with the Value Adjustment Board; and step 3 is court litigation.

Suspension of an individual's license is a permanent penalty. True or False?

False. Suspension of a individual's license is a temporary penalty. The maximum period for which the Florida Real Estate Commission may suspend is ten year.

Under a tenancy in common, each tenant must hold an equal percentage of ownership in the property. True or False?

False. Tenants in common may hold different percentages of ownership in the property. However, each tenant holds an undivided interested in the property, meaning that tenants in common own an interest in the entire property rather than just a particular part of the property.

The Fair Housing Act recommends the use of an equal opportunity poster that features the equal housing logo and a statement that pledges adherence to the Fair Housing Act. True or False?

False. The Act requires, not recommends, the use of an equal opportunity poster featuring the equal housing logo and a statement that pledges adherence to the Fair Housing Act.

The Supreme Court found "do not call" lists to be unconstitutional. Thus, a licensee may freely call anyone in Florida to solicit business. True or False?

False. The Federal Trade Commission maintains a "do not call" list. The list has nor been found to be unconstitutional. A licensee is not permitted to call an individual on the list unless the licensee has had a business relationship with the individual on the list. A licensee may call an FSBO seller if the licensee has a bona fide buyer interested in the seller's property, even if the seller in on the "do not call" list.

The Florida Vacation Plan and Time-Sharing Act applies to time-share plans consisting of more than 12 time-share periods over a span of at least 3 years and in which the facilities or accommodations are located within the state of Florida. True or False?

False. The Florida Real Estate Time-Share Act applies to time-share plans consisting of more than seven, not 12, time-share periods over a span of at least 3 year and in which the facilities or accommodation are located within the state of Florida.

The largest trade organization in the world is the Real Estate Professional Society (REPS). True or False?

False. The National Association of REALTORS (NAR) is the largest trade organization in the world. NAR promotes ethics and education in the real estate industry.

As a condition of selling a property, a seller may require a buyer using a federally related mortgage to buy title insurance from a particular company. True or False?

False. The Real Estate Settlement Procedures Act prohibits sellers from requiring buyers purchase title insurance from a particular company.

Borrowers are charged a mortgage insurance premium for a VA loan. True or False?

False. The VA does not charge a mortgage insurance premium; however, the borrower is charged a funding fee or user's fee to help the government defray the cost of foreclosures.

The VA uses a total monthly obligation ratio of 39 percent to qualify loan applicants. True or False?

False. The VA uses a total monthly obligations ratio of 41 percent to qualify loan applicants.

The discount rate is another term for mortgage points. True or False?

False. The discount rate is the interest rate charged member banks for borrowing from the Federal Reserve Bank.

The formula for determining present value is Net Operating Income x Capitalization Rate. True or False?

False. The formula for determining present value is Net Operating Income DIVIDED by the Capitalization Rate.

The four characteristics of value are demand, price, scarcity, and transferability. True or False?

False. The four characteristics of value are demand, utility, scarcity, and transferability. These characteristics can be remembered by the acronym DUST.

The high-pressure plumbing system carries wastewater away from the home. True or False?

False. The high-pressure system delivers potable water (suitable for drinking) to the various parts of a home, and the low-pressure system carries wastewater away from the home.

Chronological age is used in the lump-sum age-life method of calculating accrued depreciation. True or False?

False. The lump-sum age-life method is based on a ratio of a property's effective age to its economic life. Effective age is the age indicated by a structure's condition and utility.

The metes-and-bounds description is the LEAST accurate of the three types of legal descriptions. True or False?

False. The metes-and-bounds description is the most accurate method of land description.

The methods used to estimate the value of a business are very different from the techniques used to apprise real property. True or False?

False. The methods employed to arrive at an estimate of a business's value consist of techniques similar to those used in appraising real property with one additional technique referred to as liquidation analysis.

In a mortgage, the mortgagor owns the mortgage, while the mortgagee owns the property. True or False?

False. The opposite is true: the mortgagor owns the property, while the mortgagee owns the mortgage.

Title insurance will NOT protect an owner's heirs. True or False?

False. The owner's title insurance policy helps to protect a new owner (and the owner's heirs) from title defects.

The price of real estate is a variable that influences the supply of real estate. True or False?

False. The price of real estate influences the demand for real estate, not its supply.

The purpose of commercial zoning is to regulate density, the number of buildings per square acre. True or False?

False. The purpose of commercial zoning is to regulate intensity of use. Intensity is determined by the type and amount of pedestrian and vehicular traffic generated by a commercial enterprise. Residential zoning regulates density, or the number of buildings per acre.

The charges associated with the preparation of the deed are usually paid by the mortgagor. True or False?

False. The seller (grantor) typically pays for preparation of the deed, and the buyer (mortgagor) typically pays for preparation of the mortgage and note. However, who pays for the various expenses is negotiable.

The spouse of a judgement debtor is qualified to make a claim from the Real Estate Recovery Fund. True or False?

False. The spouse of a judge debtor is not qualified to make a claim for recovery from the fund.

In the case of a contract, obligation, or liability based on a written instrument, the statute of limitations designates that the terms of a written contract may be enforced for a period of ten years. True or False?

False. The statute of limitations designated that the terms of a written contract may be enforced for a period of five years.

The federal government's survey system uses certain north-south longitudes as base lines and certain each-west latitudes as principal meridians. True or False?

False. The survey system uses certain north-south longitudes as principal meridians and certain east-west latitudes as baselines.

The state tax rate on notes is $.35 per $500, or fraction thereof, on the face value of the promissory note. True or False?

False. The tax rate on notes is $.35 per $100, or fraction thereof, on the face value of the promissory note.

The township north of T2S, R3E is T1S, R2E. True or False?

False. The township north of T2S, R3E is T1S, R3E. The row of townships due north of T2S is T1S. The range does nor change when moving north and south.

The IRS useful asset life of nonresidential income-producing property is 27.5 years for calculating depreciation allowance. True or False?

False. The useful life of nonresidential income-producing property is 39 years. The useful life of residential rental property is 27.5 years.

The value of investment property should be based primarily on the cost to build. True or False?

False. The value of investment property should be based on the return and appreciation it will yield, not only on the cost to build. Three considerations that influence a building's investment value are exterior considerations, interior considerations, and building operating expenses.

The supply of real estate in influenced by the availability of mortgage credit. True or False?

False. The variables that influence supply are availability of skilled labor, construction loans and financing, land, and materials. Availability of mortgage credit is a variable that influences demand.

The office sign at the entrance brokerage business must display the brokerage street address. True or False?

False. There is no requirement to include the brokerage office street address on the entrance sign. The office sign must contain the broke's name, trade name (if one is used), and the words "Licensed Real Estate Broker" or "Lic. Real Estate Broker."

To prorate mean to subtract various seller charges from buyer credits. True or False?

False. To prorate means to divide various charges and credits between buyer and seller. Prorating is usually required when rents are paid in advance; property taxes are paid in arrears (that is at the end of the period for which payment is due); and interest on mortgages is paid in arrears (the usual practice).

Valuable consideration is a promise that cannot be measured in terms of money, such as love and affection. True or False?

False. Valuable consideration is money or a promise of something that can be measured in terms of money.

Disabled veterans must be at least 20 percent disabled by military service-connected injury to be entitled to an additional $5,000 exemption on their homesteaded property. True or False?

False. Veterans must be at least 10 percent (not 20 percent) disabled by military service-connected misfortune to be entitled to an additional $5,000 exemption on homesteaded property.

A licensee who violates the federal telephone solicitation law may be fined up to $10,000 per call. True or False?

False. Violators of the federal Telephone Consumer Protection Act may be fined up to $11,000 for each illegal call.

When the FED decides to sell securities through open-market bulk trading, the supply of money in circulation increases. True or False?

False. When the FED decides to sell securities through open market bulk trading, all funds received are held by the FRS. This reduces the supply of money in circulation, which in turn causes a drop in loanable funds and causes interest rates to rise.

Residential sales are defined as the sale of improved residential property of two or fewer units, the sale of unimproved residential property intended for use as two or fewer units, or the sale of agricultural property of five or fewer acres. True or False?

False. residential sales are defined as the sale of improves residential property of four (not two) or fewer units, the sale of unimproved residential property intended for use as four (not two) or fewer units, or the sale of agricultural property of ten (not five) or fewer acres.

In an option contract the optionor has an exclusive right to buy the property within a specified period. True or False?

False.In an option contract the optionee (NOT the optionor) has the exclusive right to buy the property within a specified period for a specified price and terms.

Savings associations can sell existing mortgage loans to which entity?

Federal Home Loan Mortgage Corporation

Which entity is NOT part of the primary mortgage market? -Rural housing service -Life insurance company -Mortgage broker company -Federal National Mortgage Association

Federal National Mortgage Association. The federal Nation Mortgage Association (Fannie Mae) is secondary mortgage market participant.

All national chartered commercial banks are members of which entity?

Federal Reserve System

In an amortized mortgage:

Every month principle payment increases

In an amortized mortgage:

Every month principle reduction goes up

Which statement is FALSE concerning federally related transactions?

Federally related transactions do not include transactions associated with refinancing real property. Federally-related transaction includes: 1. transactions for the sale, lease or purchase of RE 2. refinancing of real property or interests in real property 3. use of real property or interests as a security for a loan or investment including mortgage-backed securities

Black gave Blue an estate measured by Blue's lifetime. When blue died, the estate reverted back to Black. What type of estate did Black receive after Blue's death? -Fee simple estate -Remainder estate -Life estate -Non-freehold estate

Fee simple estate. Black gave a life estate to Blue. Because the property reverted back to Black after Blue's death (at the end of the life estate), Black held a reversion state. Once Blue died, the property reverted back to Black, who receives a fee simple estate.

If a request for a property tac adjustment is denied, what is the property owner's next step? -Contact the county tax collector or a representative -File a petition with the Value Adjustment Board -Sue the county property appraiser -File a certiorari proceeding with the county court

File a petition with the value adjustment board. If the property owner's request for an adjustment is rejected, the owner may file an appeal (petition) with the Value Adjustment Board.

Which category of risk is associated with the ability of a property to pay operating expenses from funds provided from operations, borrowing, and equity sources? -Business -Financial -Interest-rate -Purchasing-power

Financial. This category of risk is associated with the ability of an investment property to pay operating expenses from funds provided from operations, borrowing, and equity sources.

Advertising rental property information that is materially inaccurate is which type of violation? -First degree misdemeanor -Second degree misdemeanor -Third degree misdemeanor -Third degree felony

First degree misdemeanor.

Which type of depreciation is associated with inefficient architectural design?

Functional Obsolescence - operational inadequacies, poor design, or changing tastes and preferences

Which type of depreciation is associated with inefficient architectural design? -Physical deterioration -External obsolescence -Functional obsolescence -Age-life deterioration

Functional obsolescence. Functional obsolescence is depreciation associated with operational inadequacies, poor design, or changing tastes and preferences.

Which promise is unique to a general warranty deed? -Promise to pay -Further assurance -Promise of seisin -Habendum clause

Further assurance. A general warranty deed contains three unique promises: (1) quiet enjoyment; (2) further assurance; and (3) warranty forever.

The covenant of warranty forever is included in which type of statutory deed?

General warranty deed includes quiet enjoyment (peaceful possession undisturbed by claims of title), warranty forever (forever warrant and defend grantee's title), and further assurance (will help make title good in the future too)

Which type of deed provides a new owner with the BEST protections? -Quitclaim -Special warranty -General warranty -Bargain and sale

General warranty. The general warranty deed contains all the covenants and warranties available to give the grantee every possible future guarantee to title protection.

If a licensee/respondent disputes any of the allegations outlined in the administrative complaint, the case must be heard in

If the licensee-respondent disputes the alleged facts noted in the complaint, the licensee-respondent's case must be heard by an administrative judge in a FORMAL HEARING

Zoning ordinances

Implement the comprehensive plan -local gov't exercise police power by regulating and controlling the use of land and structures within designated land-use district or zoned.

Which power is NOT given to the Florida Real Estate Commission? -Imposing jail sentences -Making determinations of violations -Promulgating rules and regulations -Adopting a seal

Imposing jail sentences. Jail time must be imposted by a criminal court. The FREC is empowered to make determinations of license law violations and impose administrative penalties.

The Florida Real Estate Commission cannot:

Imprison a licensee

Intangible assets of a business do NOT include... -goodwill. -customer loyalty. -trademarks. -improvements.

Improvements. An intangible asset is something of value lacking physical substance; existing only in connection with something else such as the goodwill of a business.

Utility easements are generally which type of easement? -In gross -Appurtenant -Necessity -Prescription

In gross. Utility easements are easements in gross. This type of easement benefits an individual or a business entity and is not related to a specific adjacent parcel.

The MOST important cause of population increase in Florida has been the... -increase in consumer income. -number of births exceeding deaths. -in-migration of new residents -expansion of mortgage credit

In-migration of new residents. The most important cause of population increase in Florida as a whole has been in-migration - new residents moving to the area from other places.

Which financial report indicated the result of business operations over a specific period of time? -Balance sheet -Income statement -Working capital statement -Depreciable asset statement

Income statement. The income statement is a concise summary of all income and expenses of a business for a stated period of time.

The calculated interest rate of an adjustable-rate mortgage is determined by adding which two components?

Index plus Margin equals Calculated Interest Payment on an ARM

Commercial zoning is designed to regulate... -intensity. -frequency. -density. -all of the above.

Intensity. Commercial zoning regulates intensity of use.

The process of consolidating many small savings accounts belong to individual depositors and investing the funds into larger, diversified projects is known as... -disintermediation. -loan origination. -intermediation. -discounting.

Intermediation. Intermediation is a process practiced by financial institutions that serve as intermediaries between depositors and borrowers.

Population background studies do NOT involve an... -estimate of household income. -estimate of the population and location various ethnic groups. -analysis of occupations of residents. -inventory of public and private and uses.

Inventory of public and private land uses. Existing land-use studies are concerned with taking an inventory of all public and private land uses.

Which type of value is personal to a particular investor based on the investor's investment objectives, risk tolerance, and so forth? -Liquidation -Insurance -Investment -Going concern

Investment. Investment value is the price an investor would pay, given the investor's own financing requirements and income tax situation.

A land-use study... -shows where future land uses should be. -involves plotting each parcel on a land-use map. -requires an inventory of public and private land uses. -involves all of the above.

Involves all of the above. A land use study: (1) shows where suture and uses should be; (3) involves plotting each parcel on a land-use map; and (3) requires an inventory of public and private land use.

In a deed, the warrant of seizen:

Is a promise from the seller to the buyer that the seller really owns the property

The warrant of seizen in a deed:

Is a promise from the seller to the buyer that the seller really owns the property

The recipient of a power-of-attorney:

Is called an attorney in fact

An expressed contract:

Is unambiguous

The Florida Building Energy-Efficiency Rating Act does NOT require

It does not require the seller, at the seller's expense to conduct and energy efficiency rating of the structure prior to closing. It does require that buyer, before signing a sale contract, receive an information brochure notifying the purchaser of the option for an EE rating on the building. Also, created a uniform statewide rating system for rating new and existing residential, commercial and public buildings.

One advantage of real estate as an investment:

It is easy to leverage

Which type of window is the least energy efficient?

Jalousie - window is almost impossible to seal; therefore, it's the lease energy efficient.

When does the new tax year begin?

January 1

Which court case made clear that material defects that affect the value of residential property must be disclosed to prospective buyers? -Johnson v. Davis -Jones v. Mayer -Rowe v. Wade -Jackson v. Johnson

Johnson v. Davis. Johnson v. Davis is a legal case that took place in Florida that set legal precedence concerning material defects.

Farmer Brown has forty acres of land. Developer Bob has money and expertise. They get together to develop the land, turn it into a subdivision and sell the lots. This is a:

Joint venture

Which type of lot is bounded by five or six other lots? -Flag -Key -T-intersection -Interior

Key. Key lots are long skinny lots that are often bounded by five or six other lots.

Which term refers to the belief that the government should NOT interfere in private business affairs? -Lis pendens -Escheat -Caveat cmptor -Laissez-faire

Laissez-faire. Laissez-faire is a philosophy of noninterference by the government in private business affairs.

What does not depreciate?

Land

At closing the seller retains legal title to the property. The buyer receives equitable title and a promise that the buyer will receive title to the property at a later date. What type of instrument has been executed? -Land contract -Novation -Subordination clause -Long-term lease

Land contract. A land contract (or contract for deed) is a special arrangement that can be used when the buyer has little down payment. Title to the real property remains with the seller. The buyer receives equitable (legal) interest in the property.

Which characteristic does NOT describe the real estate market? -Land is homogeneous -Land is permanent -The government uses indirect controls -The market is slow to respond to changes in supply and demand

Land is homogeneous. Real estate is heterogeneous; no two tracts of land are identical.

Under which circumstance is a landlord relieved from the requirement to place security deposits into a special rental account? -Landlord has assets in excess of $1 million -Landlord files a statement of record with Florida Department of Business and Professional Regulation -Landlord posts a surety bond with the clerk of the circuit court -Landlord posts a financial assets statement with the Security and Exchange Commission

Landlord posts a surety bond with the clerk of the circuit court. If the landlord posts a surety bond with the clerk of the circuit court in the county where the rental property is located, the landlord is not obligated to place the funds into a special account. The bond must be for the total amount of the security deposits and advance rents or $50,000, whichever is less. When posting a surety bond, the landlord must pay the tenant 5 percent per year simple interest.

Which individual must hold a Florida real estate license? -Individual who ells cemetery lots -Individual who rents lots in a mobile home park -Lawyer who receives a share of the commission for each transaction resulting from the referral of a client to a local brokerage office -Sales person who works for a real estate developer and is paid a salary

Lawyer who receives a share of the commission for each transaction result from the referral of a client to a local brokerage office. A lawyer is exempt from a real estate license if performing work within the scope of an attorney-client relationship. However, to legally be paid a commission or other compensation for real estate services, the lawyer must also hold a real estate license.

Which type of notice is accomplished by recording in the public records? -Legal -Actual -Sealed -Certified

Legal. Constructive notice (also called legal notice) is accomplished by recording the information in the public records. Actual notice and constructive notice have equal legal priority.

The assessed value of an 88-year-old legally blind widow's condominium is $49,500. What is the total property tax exemption on her homesteaded property?

Legally Blind: $500 Widow: $500 Less than $50,000 = $25,000 Total $26,000

When a consumer files a complaint against a real estate licensee the contains facts indicating that a violation of FREC rules has occurred, the complaint is said to be... evidence, legally sufficient, formal, prima facie evidence

Legally sufficient. A complaint is legally sufficient if it contains facts indicating that a violation of Florida statute, or DCPR or FREC rule, has occurred.

Wat is the effect of the due-on-sale clause? -Lender may require repayment in full if the property is sold or transferred without the lender's consent -Protects the borrower against foreclosure -Allows the borrower to postpone repayment until a future date -Lender is required to allow an assumption of the mortgage loan is the property is sold

Lender may require repayment in full in the property is sold or transferred without the lender's consent. A due-on-sale clause allows the mortgagee to call due the outstanding loan balance, plus accrued interest, if the property is sold or transferred without the lender's prior written consent.

What is the lessee responsible for paying when under a gross lease? The lessor?

Lessee - Pays basic rent Lessor - Pays property charges (taxes, repairs, insurance, etc.)

What is the lessee responsible for paying when under a net lease? The lessor

Lessee - Pays basic rent plus all or most property charges Lessor - May pay some property charges

What is the lessee responsible for paying when under a percentage lease?

Lessee - Pays basic rent plus percentage of gross sales (may pay property costs)

What is a letter of reprimand?

Letter placed in licensee's file describing a minor incidence of misconduct that resulted in no disciplinary action

Within how many days must a licensee notify the Department of Business and Professional Regulation of a change in current mailing address?

Licensees must notify the DBPR in writing within 10 days of a change in current mailing address. ($500 fine if not notified correctly)

Which of the following is an encumbrance?

Lien

A sales associate may hold which position. -General partner in a real estate brokerage partnership -Owner of a sole proprietorship real estate business -President of a real estate brokerage corporation -Limited partnership in a real estate brokerage limited partnership

Limited partner in a real estate brokerage limited partnership. A sales associate or broker associate may not be an officer or director of a real estate brokerage corporation. Sales associates may be limited partner in a limited partnership.

Which statement regarding a limited real estate partnership is TRUE?

Limited partners must register with the FREC under the limited partnership name.

Two men enter into a business arrangement. The two parties agree that one party will be solely liable for the debts of the business and the other party will be liable only for the amount of cash invest in the business. Which type of business arrangement have the formed? Corporation, General partnership, Limited partnership, Business trust

Limited partnership. A limited partnership is composed of one or more general partners and one or more limited partners. The limited partner must make an investment in cash or property, but not services. Limited partners are not liable to creditors of the partnership.

Which method of legal description is used in subdivisions and is contained in recorded plat maps? -Metes-and-bounds -Lot and block -Monuments -Government survey

Lot and block. The lot and block method is used for single-family dwellings located in developed subdivisions where play maps have been recorded in the public records.

Which part of the plumbing system carries wastewater away from the structure? -High-pressure system -Supply pipe -Low-pressure system -Trap

Low-pressure system. The low-pressure system carries wastewater from the home.

The primary function of planning commission is to... -make policy recommendations to the elected government body. -make policy recommendations to the trained professional staff. -advice the next higher planning board (county, regional, etc.) of its recommendations and actions. -collect, refine, and produce the basic studies needed to develop a comprehensive plan for future growth.

Make policy recommendations to the elected government body. The planning commission's primary function is to make recommendations to the elected government body.

Which characteristic is a disadvantage of investing in real estate?

Management considerations is one of the disadvantages of investing in RE. 1. Illiquidity; 2. Market is local in nature; 3. Need for expert help; 4. Management; 5. Risk

When does the tax exemption filing period end?

March 1

The tax exemption filing period for first-time applicants ends on... -March 1. -April 1. -April 31. -November 1.

March 1. First-time applicants must file an application with the county property appraiser's office on or before March 1.

The interest rate on an adjustable-rate mortgage loan is calculated by adding the index rate to the... -margin. -cap. -index. -ceiling.

Margin. The calculate interest rate is arrived at by adding the selected index to the lender's margin.

What is the result of multiplying the gross rent multiplier by the monthly rent? -Leasable rent -Annual rent -Market value -Capitalization reate

Market value. Market value equals the gross monthly rent multiplied by the gross rent multiplier.

What is a fine?

May be up to $5,000 for each violation of Chapter 475 and Chapter 455

For each type of business entity, indicate whether that entity may register as a real estate broker -Limited liability company -Corporation sole -Corporation -Limited liability partnerships -Joint ventures Business trusts

May register as a broker: -Limited liability companies -Corporations -Limited liability partnerships May not register as a broker: -Corporations sole -Joint ventures -Business trusts

Which settlement procedure involves a negotiated settlement between the disputing parties? Arbitration, Mediate, Litigation, Escrow disbursement order

Mediation. Mediation is an informal, non-adversial process intended to reach a negotiated settlement.

Which penalty is NOT an administrative penalty that may be imposed by the FREC?

The answer is RESTITUTION TO THE INJURED PARTY. The FREC does not have the authority to order restitution to an injured party. If the acts of a licensee harm a consumer, the injured party may seek damages in a court of law.

Which document would contain information regarding the architectural design standards that must be used in a particular subdivision?

The answer is RESTRICTIVE COVENANTS. Restrictive covenants affect how the land can be used and establish criteria for all parcels in that subdivision such as minimum square footage, type of construction, architectural design, and so forth.

Which real estate investment characteristic listed below is a disadvantage of investing in real estate?

The answer is RISK. Tenant turnover, increasing property taxes, and increased costs associated with operations are a few examples of the risk associated with investing in real estate.

The brokerage relationship disclosure requirements in Chapter 475 apply to which transaction?

The answer is SALE OF THREE VACANT LOTS ZONED FOR SINGLE-FAMILY USE. Brokerage relationship disclosure requirements apply to residential transactions. A residential sale is defined as the sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, and the sale of agricultural property of ten or fewer acres.

What is another term for a release of mortgage, and within how many days must the lender execute the release?

The answer is SATISFACTION OF MORTGAGE WITHIN 60 DAYS. A satisfaction of mortgage (or a release of mortgage) must be sent within 60 days.

The Director of the Division of Real Estate is appointed by the

The answer is SECRETARY OF THE DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION. The Director of the DRE is appointed by the Secretary of the DBPR, subject to approval by majority vote of the FREC.

A seller files a complaint against a broker. The broker hires an attorney to represent him in discussions with the DBPR. Which person is the complainant?

The answer is SELLER. The complainant is the person who files the complaint.

Assume on February 28, 2012, an initial real estate license was issued. What date will this license expire?

The answer is SEPTEMBER 30, 2013. Real estate licenses expire on either March 31 or September 30. The expiration date of the initial license is the date (March 31 or September 30) that provides at least 18 months of initial licensure but does not exceed 24 months.

Which information must be given to a prospective borrower within three business days of making application for a mortgage loan?

The answer is SERVICING DISCLOSURE STATEMENT. When borrowers apply for a mortgage loan, they must be given, within three business days, the following three disclosures: (1) special information booklet; (2) good faith estimate of closing costs; and (3) a servicing disclosure statement.

Which disclosure statement informs a prospective borrower that a lender intends to transfer the mortgage loan to another lender once the loan is made?

The answer is SERVICING DISCLOSURE. A servicing disclosure statement discloses to the borrower whether the lender intends to service the loan or transfer it to another lender or servicing company. RESPA requires this disclosure to be made at the time of loan application or within three business days.

Lenders sometimes handle the loan payment collection and record keeping associated with mortgage loans known as

The answer is SERVICING THE MORTGAGE. Some lenders "service" (handle the loan payment collecting and record keeping) the mortgages they originate.

A purchaser of subdivided lands of 25 or more lots has the right to cancel the purchase agreement within how many days?

The answer is SEVEN. Under the Interstate Land Sales Full Disclosure Act, purchasers who receive a copy of the property report prior to signing the contract may cancel the agreement within seven days.

How do forest trees on real property become personal property?

The answer is SEVERANCE. Real property becomes personal property by the act of severance.

Which type of roof construction involves one plane at a steep angle?

The answer is SHED. Shed roofs consist of a single steep plane. This type of roof construction is often used in contemporary architecture.

Investment in an apartment building is regarded as economically feasible if it

The answer is SHOWS AN APPROPRIATE RETURN ON THE INVESTMENT AND RECOVERS THE INVESTED CAPITAL. Investment in real estate is economically feasible if it shows an appropriate return on the investment and recovers the invested capital.

Essential elements of a deed do NOT include

The answer is SIGNATURE OF A COMPETENT GRANTEE. A competent grantor (not grantee) must sign the deed

Which element is NOT an essential element of a deed?

The answer is SIGNED BY A COMPETENT GRANTEE. The deed must be signed by a competent grantor (not grantee).

A husband and wife have title to a property in both names. Which action is required to convey the title to the property?

The answer is SIGNED BY THE HUSBAND AND WIFE. The deed must be signed by the grantor. In this case, the grantor (person conveying title) is the husband and wife. Before a legal document can be recorded, it must be notarized. However, in Florida, deeds are not required to be recorded.

An economic characteristic associated with people's preference for certain real estate locations is known as

The answer is SITUS. The economic characteristic, situs (people's preference for certain locations), indicates the influences on value created by location.

A line pointed in the direction opposite North 20 degrees East is

The answer is SOUTH 20 DEGREES WEST. The line opposite North 20 degrees East is South 20 degrees West. The number of degrees does not change, only the compass directions.

In relation to Section 1 of a township, Section 12 is due

The answer is SOUTH. To answer this question requires knowing how to number a township

In which type of deed does the grantor warrant to defend the title solely against acts by the grantor or the grantor's representative?

The answer is SPECIAL WARRANTY. In a special warranty deed, the grantor does not assume responsibility for the title in any way except against the acts by the grantor or the grantor's representative.

Which remedy for breach of contract requests the courts to force the other party to proceed as the contract states?

The answer is SPECIFIC PERFORMANCE. If awards of money damages do not afford sufficient relief, the wronged party may sue for specific performance to have the courts force the other party to perform as the contract specifically states.

An individual who received a four-year degree in real estate from a state university is NOT exempt from which license requirement?

The answer is STATE LICENSE EXAM. Individuals who have received a four-year degree in real estate from an institution of higher education are exempt from the prelicense FREC Courses I and II. Such individuals are also exempt from postlicense education requirements.

Which statement is TRUE regarding the SAFE Act?

The answer is STATE-LICENSED MORTGAGE LOAN ORIGINATORS ARE REQUIRED TO COMPLETE PRELICENSE EDUCATION AND PASS A WRITTEN QUALIFICATIONS EXAM. Mortgage loan originators (MLOs) who are not employed by agency-regulated institutions are licensed by the state. State-licensed MLOs must complete prelicensure education, pass a written qualification exam, and take continuing education courses.

Which law specifies that contracts concerning real property must be in writing and signed by the parties bound to the agreement?

The answer is STATUTE OF FRAUDS. The Statute of Frauds requires that contracts that convey an interest in real property must be in writing and signed to be enforceable (unless certain specific exceptions apply).

Which method is NOT one of the four settlement procedures available to the parties when there is an escrow dispute?

The answer is STIPULATION. A stipulation is an agreement as to the penalty reached when a licensee has violated license law. The four settlement (escape) procedures available include: (1) mediation; (2) arbitration; (3) litigation; and (4) escrow disbursement order.

Real estate escrow funds may NOT be placed in which type of depository?

The answer is STOCK BROKERAGE HOUSE. Brokers may maintain an escrow account in a Florida commercial bank, credit union, or savings association. Some brokers instead choose to have a Florida-based title company that has trust powers maintain the escrow funds, or alternatively, if designated in the sale contract, a Florida attorney may escrow the funds.

A map that indicates the size and location of individual lots, streets, and public utilities within a new development is called a(n)

The answer is SUBDIVISION PLAT MAP. A subdivision plat map indicates the size and location of individual lots, streets, and public utilities, including water and sewer lines.

Susan has six months remaining on her lease. She assigns two of the remaining months to another person to use the property while she is on vacation in Europe. What is this called?

The answer is SUBLEASE. A sublease is used when the lessee assigns less than the entire property or assigns all of the property for less than the full remaining period.

Which mortgage clause allows another mortgage created at a later date to take priority?

The answer is SUBORDINATION. A subordination clause provides that the lender (usually the seller) voluntarily will allow a subsequent mortgage to take priority over the lender's otherwise superior mortgage (the act of yielding priority).

The priority of liens may be changed by which written agreement?

The answer is SUBORDINATION. Under a subordination agreement, the holder of a prior lien (lien with an earlier recording date) agrees to allow a junior lienholder's interest to move ahead of the prior lien.

Which principle states that an informed purchaser will NOT pay more for real estate than the cost of acquiring an equally desirable alternative property?

The answer is SUBSTITUTION. The principle of substitution means that a prudent buyer or investor will pay no more for a property than the cost of acquiring, through purchase or construction, an equally desirable alternative property.

Physiographic studies reveal the

The answer is SURFACE AND SUBSURFACE STRUCTURE OF LAND. Physiographic studies describe the physical structure of the land.

The four characteristics of value do NOT include which characteristic?

The answer is SURPLUS. The four characteristics of value are: demand, utility, scarcity, and transferability.

Susan Walters is a licensed real estate sales associate. Her sales associate license was issued as Susan Walters (LLC). Which statement is TRUE regarding this situation?

The answer is SUSAN HAS FORMED A LIMITED LIABILITY COMPANY (LLC) FOR INCOME TAX PURPOSES ONLY, AND IS EMPLOYED BY AND REGISTERED UNDER EITHER A LICENSED REAL ESTATE BROKER OR AN OWNER DEVELOPER. Broker associates and sales associates must have their licenses issued in their legal names. A sales associate is allowed by law to form as a limited liability company. The DBPR issues the license in the licensee's actual name, and includes the entity designation on the face of the license. The LLC may be formed for income tax purposes only, and it is not a real estate brokerage entity.

Mike Meyers, licensed real estate broker, is a sole proprietor who uses the trade name #1Service Realty. His wife Susan Meyers works with Mike and is a licensed broker associate. Of the following pieces of information that appear on the broker's entrance sign, which is optional under Florida license law?

The answer is SUSAN MEYERS, BROKER ASSOCIATE. The names of sales associates and broker associates are not required to appear on the entrance sign. If the names of associates do appear on the entrance sign, the associate's license status must appear next to the name.

Under which situation does a license become ineffective?

The answer is SUSPENDED. An ineffective license occurs when a license is inactive or suspended.

A license becomes ineffective when it is

The answer is SUSPENDED. License is ineffective when it is suspended.

If you have located a township numbered T2S, R4E, the township due south of that township is

The answer is T3S, R4E. The township number changes when moving south. Because it is further south (away from the intersection of the principal meridian and base line) the number is larger.

A tenant, after rightfully being in possession of a rented premises, without the consent of the owner, continues possession. This situation creates a(n)

The answer is TENANCY AT SUFFERANCE. A tenancy at sufferance occurs when a tenant stays in possession of a property beyond the ending date of a legal tenancy, without the consent of the landlord.

Which type of estate is created when a husband and wife take title in both of their names?

The answer is TENANCY BY THE ENTIRETIES. A tenancy by the entireties is title in the name of a husband and wife.

Property held as a tenancy by the entireties becomes which type of estate in the event of divorce?

The answer is TENANCY IN COMMON. In the event of a divorce, the tenancy by the entireties is ended and a tenancy in common results.

Which statement is TRUE regarding a racial discrimination case involving commercial real estate? -Racial discrimination in commercial transactions is not protected under the law because the Fair Housing Act pertains to residential real estate only -The Civil Rights Act of 1968, which replaced the 1866 Civil Rights Act, does not protect against racial discrimination in nonresidential transactions -The Civil Rights Act of 1866, which is enforceable today, makes racial discrimination illegal in residential and nonresidential transaction -The Fair Housing Act, as amended in 1988, makes racial discrimination in nonresidential transactions illegal

The Civil Rights Act of 1866, which is enforceable today, makes racial discrimination illegal in residential and nonresidential transactions. The Civil Rights Act of 1866 prohibits any type of discrimination based on race in any real estate transaction without exceptions. This law is still in force today.

Who must receive the lead-based paint disclosure?

The answer is TENANTS AND BUYERS OF ALL RESIDENTIAL PROPERTY BUILT PRIOR TO 1978. The lead-based paint disclosure law applies to buyers and tenants of residential property built prior to 1978.

Three individuals want to develop and sell a parcel of land. Each of the individuals has a spouse and children. The three individuals want to take title to the property in such a way that an owner's family would inherit part of the property if that property owner died. How should the individuals take title to the land?

The answer is TENANTS IN COMMON. In a tenancy in common, the interest of each common tenant descends to the legal heirs.

Sales associate Terry Stoufer may have which information entered on her license, if applicable?

The answer is TERRY STOUFER, LLC. Sales associates may not use trade names

A person who dies with a valid will has, in effect, died

The answer is TESTATE. To die testate indicates the deceased person prepared a will before death.

The broker is a single agent of the seller. The principal has disclosed to the broker that the roof leaks, although there is no visible evidence of a water problem. The broker has satisfied her legal obligation to both the principal and all prospective buyers if she discloses

The answer is THAT THE ROOF LEAKS. The licensee must disclose all known facts that materially affect the value of residential real property and are not readily observable

The Sherman Antitrust Law and Florida antitrust laws prohibit which activity?

The answer is THE ASSOCIATION OF REALTORS® RECOMMENDING A STANDARD COMMISSION RATE BASED ON SURVEYS OF MEMBERSHIP. It is illegal for real estate brokers to conspire to fix commissions or fees for the services they perform. The amount of commission to be paid is negotiable.

Which statement is NOT associated with the economic concept of demand?

The answer is THE AVAILABILITY OF BUILDING MATERIALS INFLUENCES DEMAND. The availability of building materials has to do with supply (not demand).

An investor wanted to build a motel. A broker showed him three choice sites zoned hotel-motel. The investor promised to decide on a site in three weeks, so the broker took a two-week vacation. When the broker returned, the investor bought one of these sites. The broker sold the site, not knowing that the zoning on that site had been changed to industrial. Which is correct?

The answer is THE BROKER IS GUILTY OF CULPABLE NEGLIGENCE. Culpable negligence is the term used to describe inadequate attention to duties and obligations

A licensed real estate broker has been hired by a lender to appraise a home for a buyer who has made application for an FHA loan. Which statement is TRUE regarding this situation?

The answer is THE BROKER IS REQUIRED TO BE A STATE-CERTIFIED APPRAISER TO PERFORM THIS APPRAISAL ASSIGNMENT. A state-certified or licensed appraiser must prepare appraisal reports for any loans involving Fannie Mae, Freddie Mac, HUD, or VA

Which statement is TRUE regarding interest-bearing escrow accounts?

The answer is THE BROKER MUST GET WRITTEN PERMISSION FROM ALL PARTIES TO THE TRANSACTION BEFORE PLACING THE FUNDS INTO AN INTEREST-BEARING ACCOUNT. If an escrow account is an interest-bearing account, the broker must get written permission from all parties before placing the funds into the account. The written authorization must specify who is entitled to the interest earned.

Which statement concerning sections is FALSE?

The FALSE statement is the a SECTION contains 43,560 sf. It's one mile square of 640 acres

A licensed real estate broker has a successful real estate business. The broker has branch offices in Fort Myers, Naples, and Bradenton, Florida. The broker wants to close her Bradenton office and open a new branch office in Sarasota, Florida. Which statement applies to this situation?

The answer is THE BROKER MUST REGISTER THE NEW BRANCH LOCATION AND PAY THE BRANCH OFFICE LICENSE FEE. The new location must be registered and the fee paid. Registrations issued to branch offices are not transferable.

A licensed broker is the broker for two independent real estate brokerages. Which statement applies to this situation?

The answer is THE BROKER MUST REQUEST AND BE ISSUED MULTIPLE BROKER LICENSES—ONE FOR EACH BROKERAGE COMPANY. Multiple licenses are issued to brokers who qualify as the broker for more than one business entity. A broker who holds more than one Florida broker license is said to hold multiple licenses.

Is a broker required to retain the brokerage relationship disclosure documents, and if so, for how long, if a written nonresidential transaction that utilized designated sales associates fails to close?

The answer is THE BROKER MUST RETAIN THE DISCLOSURE DOCUMENTS FOR FIVE YEARS EVEN IF A NONRESIDENTIAL TRANSACTION THAT UTILIZED DESIGNATED SALES ASSOCIATES FAILS TO CLOSE. Brokers must retain brokerage relationship disclosure documents for five years for all nonresidential transactions that utilize designated sales associates that result in a written contract to purchase and sell real property. This requirement includes files of properties that may have failed to close.

Money will be paid from the Real Estate Recover Fund when:

The Florida Real Estate Commission has been proven wrong in a court of law

A real estate licensee purchased a home from the seller. After the closing, the licensee discovered that the seller's broker had failed to disclose latent defects. The licensee sued the seller's broker and was awarded a judgment. The licensee was unable to collect on the judgment and is considering submitting a claim to the Real Estate Recovery Fund. Which statement is TRUE regarding this situation?

The RE licensee is not eligible to make a claim against the Real Estate Recovery Fund

In commercial real estate transactions that meet specific criteria, a real estate brokerage may use one sales associate to work as a single agent of the buyer and another sales associate to act as a single agent of the seller. Which criteria must be met?

The answer is THE BROKER MUST SERVE AS A NEUTRAL PARTY AND NOT GIVE GUIDANCE OR REPRESENTATION TO THE BUYER AND THE SELLER. The buyer and seller may request, in certain commercial real estate transactions, that two sales associates be designated, with one to act as a single agent for the buyer and the other sales associate to act as a single agent of the seller. The broker serves as a neutral party helping to facilitate the process without giving guidance or representation to the parties in the transaction.

Which statement is TRUE regarding a racial discrimination case involving commercial real estate?

The answer is THE CIVIL RIGHTS ACT OF 1866, WHICH IS ENFORCEABLE TODAY, MAKES RACIAL DISCRIMINATION ILLEGAL IN RESIDENTIAL AND NONRESIDENTIAL TRANSACTIONS. The Civil Rights Act of 1866 prohibits any type of discrimination based on race in any real estate transaction without exception. This law is still in force today.

Which statement is unique to the transaction broker relationship?

The answer is THE CUSTOMER IS NOT RESPONSIBLE FOR THE ACTS OF THE LICENSEE. The duty of obedience is unique to the single agent relationship. In all three brokerage relationships, when dealing in residential real estate, the licensee must disclose all known facts that materially affect the value of the real property. The licensee is not required to give written notification of the brokerage relationship duties in a transaction broker relationship. The buyer or seller is not required to sign the disclosure unless transitioning from one brokerage relationship to another.

Which statement concerning tenancy by the entireties is FALSE?

The answer is THE DEED MUST SPECIFICALLY STATE INTENT TO CREATE SUCH A TENANCY. A tenancy by the entireties is automatically created (without special wording) when title is taken in the names of the husband and wife.

The rate of interest that the Federal Reserve Bank charges member banks for borrowing from the Federal Reserve Bank is referred to as

The answer is THE DISCOUNT RATE. The discount rate is the interest rate charged member banks for borrowing from the Federal Reserve

If a married couple who files jointly realizes a profit from the sale of their home that exceeds $500,000, what is the result?

The answer is THE EXCESS GAIN WILL BE TAXED AT THE CURRENT APPLICABLE CAPITAL GAINS RATE. Gain is not taxed up to $500,000.

Which information must be disclosed to all prospective buyers?

The answer is THE HOME IS SITUATED IN A FLOOD-PRONE AREA. Whether a person was murdered, infected with HIV, or is Hispanic is not a material fact that affects the value of real estate. The fact that the home is in a flood prone area is a material fact that affects the value of the property and must be disclosed to prospective buyers

A warehouse measures 825 feel by 600 feet and rents for $130,000 a month. What is the rent per square foot per month? -$0.26 -$0.33 -$2.62 -$3.05

The answer is $0.26. The solution is: 825 feet x 600 feet = 495,000 sq ft $130 ,000 rent divided by 495,000 sq ft = .262626 or $.26 per square foot

A warehouse measures 825 feet by 600 feet and rents for $130,000 a month. What is the rent per square foot per month?

The answer is $0.26. The solution is: 825 feet × 600 feet = 495,000 square feet; $130,000 rent ÷ 495,000 square feet = .262626 or $.26 per square foot.

What is the usual action of the Commission if a real estate licensee has for the second time violated the Uniform Standards of Professional Appraisal Practice as defined in Florida license law?

The answer is $1,000 TO $5,000 ADMINISTRATIVE FINE AND SUSPENSION TO REVOCATION. Rule 61J2-24.001, Florida Administrative Code, sets out the disciplinary guidelines that may be imposed by the Commission. If a real estate licensee violates the Uniform Standards of Professional Appraisal Practice for the second time, the Commission may impose a penalty of $1,000 to $5,000 administrative fine and suspension to revocation.

A 30.25-acre parcel of land in Citrus County sells for $5,300 per acre. What is the documentary stamp tax on the deed? -$561.40 -$1,113.00 -$1,122.80 -$1,124.20

The answer is $1,122.80. The solution is: 30.25 acres x $5,300 per acre = $160,325 purchase price; $160,325 divided by $100 increments = 1603.25 rounded up to 1604 increments 1604 x $.70 rate = $1,122.80 documentary stamp tax on deed.

A 30.25-acre parcel of land in Citrus County sells for $5,300 per acre. What is the documentary stamp tax on the deed?

The answer is $1,122.80. The solution is: 30.25 acres × $5,300 per acre = $160,325 purchase price; $160,325 ÷ $100 increments = 1603.25 rounded up to 1604 increments; 1604 × $.70 rate = $1,122.80 documentary stamp tax on deed.

A senior citizen who owns a home located in Pinellas County, with an assessed value of $112,800. The city tax rate is 9.5 mills, the county rate is 9.5 mills, and the school board tax rate is 7.3 mills. The senior citizen has homesteaded his principal residence. The amount of savings in property taxes realized by all allowable tax exemptions is

The answer is $1,132.50. The solution is: 9.5 city + 9.5 county + 7.3 school = 26.3 mills; $25,000 homestead × .0263 mills = $657.50 savings; 9.5 city mills + 9.5 county mills = 19 mills; $25,000 additional exemption × .019 = $475 savings; $657.50 + $475 = $1,132.50 total savings.

What is the fine per telephone call for a violation of Florida's Telemarketing Act?

The answer is $10,000. Violators of Florida's Telemarketing Act may be fined $10,000 per call.

An investor purchased a commercial building in January for $524,900. The contract specified that 80 percent of the purchase price was allocated to the structure and the remaining purchase price was allocated to the land. What is the annual depreciation deduction? (Round to nearest dollar.)

The answer is $10,767. The solution is: $524,900 × .80 = $419,920 building; $419,920 ÷ 39 years = $10,767.

A seller owns a home appraised at $52,500. The seller still owes $32,760 on the first mortgage and $4,200 on a second mortgage. The sales commission will be $3,640. What is the seller's equity in the home?

The answer is $15,540. The solution is: $52,500 appraised value - $32,760 first mortgage - $4,200 second mortgage = $15,540 equity.

A licensed real estate broker has a buyer who is interested in investing in income-producing property. The broker finds a property producing net income of $1,750 per month. The buyer will purchase the property if the buyer can get it for a price that will return 14 percent per year on her investment. If the desired 14 percent rate of return is regarded as a 14 percent capitalization rate, what will the buyer be willing to pay for the property?

The answer is $150,000. The solution is: $1,750 monthly net income × 12 months = $21,000 NOI; $21,000 ÷ .14 cap rate = $150,000 target price

A man owned 3/8 of a property. He was paid $60,000 as his share of the proceeds from the sale of the property. What was the total selling price of the property? -$180,000 -$160,000 -$120,000 -$96,000

The answer is $160,000. The solution is: Part divided by rate = Whole (total sale price) $60,000 part divided by .375 = $160,000 total sale price

A man owned 3/8 of a property. He was paid $60,000 as his share of the proceeds from the sale of the property. What was the total selling price of the property?

The answer is $160,000. The solution is: Part ÷ Rate = Whole (total sale price); $60,000 part ÷ .375 rate = $160,000 total sale price.

The interest portion on the first monthly payment of a 30-year, 6 percent mortgage is $650. If the loan-to-value ratio is 80 percent, how much did the owner pay for the house? -$68,750 -$130,000 -$162,500 -$168,750

The answer is $162,500. The solution is: Part divided by Rate = Total; $650 x 12 months = $7,800 = part (the annual interest); $7,800 part divided by .06 rate = $130,000 whole = loan amount $130,000 lon (part) divided by .80 rate = $162,500 purchase price.

The interest portion on the first monthly payment of a 30-year, 6 percent mortgage is $650. If the loan-to-value ratio is 80 percent, how much did the owner pay for the house?

The answer is $162,500. The solution is: Part ÷ Rate = Total; $650 × 12 months = $7,800 = part (the annual interest); $7,800 part ÷ .06 rate = $130,000 whole = loan amount; $130,000 loan (part) ÷ .80 rate = $162,500 purchase price.

What would be the total required taxes for the loans on a $47,500 tract that sold with $10,000 cash down, a new second mortgage of $15,500, and an assumed mortgage of $22,000 that was previously recorded?

The answer is $162.25. The solution is: Doc stamps on new note: $15,500 ÷ $100 increments × $.35 rate = $54.25; Doc stamps on assumed note: $22,000 ÷ $100 increments × $.35 rate = $77.00; Intangible tax on new mortgage: $15,500 × $.002 = $31.00; $54.25 + $77.00 + $31.00 = $162.25 taxes for the mortgage loans.

An appraiser is calculating the reproduction cost new of a home using the comparative square-foot method. The appraiser measured the exterior dimensions of the home, which were 30 feet by 55 feet, plus a detached garage measuring 22 feet by 24 feet. The appraiser consults an accepted cost manual and estimates the reproduction cost for heated and air-conditioned living area to be $90.50 per square foot and the finished free-standing garage to be $58.00 per square foot. What is the reproduction cost new of the improvements?

The answer is $179,949. The solution is: 30 feet × 55 feet = 1,650 square feet living area × $90.50 = $149,325; 22 feet × 24 feet = 528 square feet garage area × $58.00 = $30,624; $149,325 + $30,624 = $179,949 reproduction cost new.

You bought a house for $195,000. You gave a deposit of $25,000, assumed a mortgage of $100,000, and signed a new second mortgage note for $70,000. What are the total state taxes due as a result of this transfer of property? -$1,265 -$1,365 -$1,960 -$2,100

The answer is $2,100. The solution is: $195,000 divided by $100 increments = 1,1950 taxable increments; 1,950 x $.70 rate = $1,365 doc stamps on deed; $100 divided by $100 = 1,000 taxable increments; 1,000 x .35 rate = $350 doc stamps on assumed mortgage note; $70,000 divided by $100 increments = 700 taxable increments; 700 x $.35 rate = $245 doc stamps on new mortgage note; $700,000 new mortgage x $.002 = $140 intangible tax on new mortgage $1,365 + 350 + $245 + $140 = $2,100

Which statement is FALSE regarding biweekly mortgages?

The answer is THE INTEREST RATE IS TYPICALLY HIGHER COMPARED WITH FIXED-RATE MORTGAGES AMORTIZED MONTHLY. The biweekly mortgage has the same interest rate as the equivalent monthly amortized mortgage loan, but because an extra month's payment is made each year, the loan is paid off sooner, reducing the total amount of interest paid over the life of the loan.

A loan applicant is a 72-year-old retired professor. The loan applicant was denied for a 30-year mortgage, even though the applicant has sufficient income from a pension plan and an excellent credit history.

The answer is THE LENDER'S ACTIONS ARE A VIOLATION OF THE EQUAL CREDIT OPPORTUNITY ACT. The Equal Credit Opportunity Act prohibits discrimination regarding credit on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance

Which element is NOT a cause of action for fraud in a real estate transaction?

The answer is THE LICENSEE REPRESENTED THE BUYER IN THE TRANSACTION. There are four elements of a cause of action for fraud: (1) the licensee made a misstatement or failed to disclose a material fact; (2) the licensee either knew or should have known that the statement was not accurate or that the undisclosed information should have been disclosed; (3) the buyer relied on the misstatement; and (4) the buyer was damaged as a result.

When a broker's license is revoked, what happens to the licenses of the sales associates that are registered under the broker?

The answer is THE LICENSES REVERT TO INVOLUNTARY INACTIVE STATUS. The DBPR places the licenses of any sales associates registered under the penalized broker on involuntary inactive status.

The license of the only broker for a firm was revoked. What action, if any, will be taken against the sales associates' licenses registered under the broker?

The answer is THE LICENSES WILL BE PLACED IN INVOLUNTARY INACTIVE STATUS. A sales associate's license is placed in involuntary inactive status when an employer's license is suspended or revoked

In the cost-depreciation approach, estimating accrued depreciation involves estimating

The answer is THE LOSS IN VALUE OF THE IMPROVEMENTS. Depreciation is loss in value due to physical deterioration, functional obsolescence, and external obsolescence. Depreciation applies to the structure only.

What is meant by the phrase "the automatic working of the system"?

The answer is THE MARKETPLACE OF PRODUCERS AND CONSUMERS INTERACT TO DETERMINE WHAT PRODUCTS SHOULD BE PRODUCED AND AT WHAT COST. We have a relatively free enterprise system. No committee from the Department of Commerce or any other agency has to survey the national market to determine what goods and services are selling well and which ones should be removed from the marketplace.

What is the result of increasing the discount rate?

The answer is THE MONEY SUPPLY DECREASES. If the discount rate is increased, member banks have to pay a higher interest rate for money borrowed from their district bank. The higher interest rate is passed on in the form of higher interest to consumers. This reduces the number of loans made and less money circulates in the marketplace.

Which statement is TRUE regarding a level payment plan mortgage?

The answer is THE MONTHLY PRINCIPAL AND INTEREST PAYMENT REMAINS CONSTANT FOR THE ENTIRE LOAN TERM. The borrower pays the same amount each month; however, the portion used to pay interest decreases each month, while the portion used to repay principal increases each month.

Which statement concerning broker's price opinions (BPOs) is TRUE?

The answer is THE PAYMENT FOR A BPO MUST BE PAID TO THE BROKER AND NOT DIRECTLY TO THE SALES ASSOCIATE WHO PREPARED THE BPO. If a sales associate or broker associate performs a BPO, the compensation must be paid to the broker and not directly to the associate who prepared the BPO.

Florida's Statute of Limitations defines

The answer is THE PERIOD OF TIME THAT A WRITTEN CONTRACT IS LEGALLY ENFORCEABLE. The Statute of Limitations designates the period of time during which the terms of a contract may be enforced.

A school administrator relocates the real estate school to a new location. The school administrator is so busy with movers and getting the space set up to offer classes that the administrator forgets to notify the DBPR within ten days of the change of address. What, if anything, will happen to the school permit?

The answer is THE PERMIT WILL CEASE TO BE IN FORCE. The Commission must be notified within ten days when a registered school changes business address. The school permit will cease to be in force until the Commission receives proper notification.

Which statement concerning characteristics of the real estate market is FALSE?

The answer is THE REAL ESTATE MARKET IS ORGANIZED AND CONTROLLED CENTRALLY. The market is unorganized and without central control.

You bought a house for $195,000. You gave a deposit of $25,000, assumed a recorded mortgage of $100,000, and signed a new second mortgage and note for $70,000. What are the total state taxes due as a result of this transfer of property?

The answer is $2,100. The solution is: $195,000 ÷ $100 increments = 1,950 taxable increments; 1,950 × $.70 rate = $1,365 doc stamps on deed; $100,000 ÷ $100 increments = 1,000 taxable increments; 1,000 × $.35 rate = $350 doc stamps on assumed mortgage note; $70,000 ÷ $100 increments = 700 taxable increments; 700 × $.35 rate = $245 doc stamps on new mortgage note; $70,000 new mortgage × $.002 = $140 intangible tax on new mortgage; $1,365 + $350 + $245 + $140 = $2,100.

The buyers are purchasing an apartment building. Each of the five apartments rents for $825 per month. The closing is scheduled for July 15, and the rents were collected on July 1. What is the rent proration for this transaction, and to whom will the amount be credited? (Day of closing belongs to the buyer.)

The answer is $2,262.10 CREDIT TO BUYER. The solution is: 825 rent × 5 apartments = $4,125 total monthly rent; $4,125 ÷ 31 days × 17 days due buyer = $2,262.097 or $2,262.10 credit to buyer.

Th buyers are purchasing an apartment building. Each of the fiver apartments rents for $825 per month. The closing is scheduled for July 15, and the rents were collected on July 1. What is the rent proration for this transaction, and to whom will the amount be credited? (Day of closing belongs to the buyer.) -$2,062.50 credit to seller -$2,262.10 credit to buyer -$2,337.50 credit to seller -$4,125.00 credit to buyer

The answer is $2,262.10 credit to buyer. The solution is: $825 rent x 5 apartments = $4,125 total monthly rent $4,125 divided by 31 days x 17 days due to buyer = $2,262.097 or $2,262.10 credit to buyer.

The following taxes were paid at the closing of a new home: $1,540 state documentary stamp tax on the deed, $693 state documentary stamp tax on the note, and $396 state intangible tax on the mortgage. What was the purchase price of the home?

The answer is $220,000. The solution is: Part ÷ Rate = Value; $1,540 doc stamps on deed ÷ $.70 rate = 22,000 tax increments; 22,000 × $100 = $220,000 purchase price.

A property has been assessed at $40,000. The city tax rate is 10 mills, the county tax rate is 9 mills, and the school board levy is 8 mills. The owner has qualified for and received homestead tax exemption. How much will the owner save from county taxes as a result of the homestead tax exemption?

The answer is $225. The solution is: $25,000 homestead exemption × .009 county rate = $225.

A sales associate has held an active real estate license since 2000. The licensee neglected to renew his real estate license prior to the expiration date in March of this year. Which statement does NOT apply to this situation?

The answer is THE SALES ASSOCIATE IS REQUIRED TO COMPLETE 28 HOURS OF A COMMISSION-PRESCRIBED EDUCATION COURSE. The license reverts to involuntary inactive status when it is not renewed at the end of the license period. When a licensee has been in involuntary inactive status for 12 months or less, the licensee may satisfy the education requirement by completing 14 hours of FREC-approved continuing education. The 28-hour course is required if the license has been expired for more than 12 months but less than 24 months.

A seller wants to give something extra to the sales associate beyond the sale commission to be paid for a transaction. The seller decides to give the sales associate a shopping mall gift certificate. Which statement applies to this situation?

The answer is THE SELLER CANNOT GIVE THE GIFT CERTIFICATE TO THE SALES ASSOCIATE DIRECTLY, BUT MAY GIVE IT TO THE SALES ASSOCIATE'S BROKER WITH A NOTE REQUESTING THAT THE GIFT CERTIFICATE BE GIVEN TO THE SALES ASSOCIATE FOR FINE SERVICE. All monies or other compensation earned by sales associates as a result of any real estate services must be paid to the sales associates by their employers and not directly by a buyer or seller

What does Florida's Homeowner Association Law require of sellers who own property subject to a mandatory homeowners' association?

The answer is THE SELLER MUST PROVIDE THE BUYER WITH A DISCLOSURE SUMMARY REGARDING THE ASSOCIATION. Florida law requires sellers of property subject to a homeowners' association to provide buyers with a disclosure summary regarding the association, the existence of restrictive covenants, and any assessments that the association imposes.

Zoning ordinances regulate

The answer is THE SETBACK REQUIREMENTS OF A BUILDING FROM THE PROPERTY LINES. Zoning laws regulate the purposes for which structures can be used, setback requirements, minimum square footage requirements for buildings, and maximum building height.

A prospective tenant purchased rental information from a real estate brokerage company for $75. What recourse is available to the prospective tenant who purchased the information and found that much of the rental information was out-of-date?

The answer is THE TENANT SHOULD DEMAND WITHIN 30 DAYS A REFUND OF $75. If the information provided to a prospective tenant is not current or is inaccurate in any material respect, the broker must repay the full fee to the prospective tenant on demand if the claim is made within 30 days from the contract date.

A sales associate received a $5,000 earnest money deposit from a buyer. The associate immediately delivered the deposit to the broker. The broker deposited the check on the third business day into the general operating account.

The answer is THIS IS AN EXAMPLE OF COMMINGLING OF ESCROW FUNDS. Commingling is the mixing together of escrow funds with general business funds or personal funds.

A broker has a listing priced at $120,000. An uninformed buyer offers her $125,000. The broker buys the property for $120,000, then sells it for $125,000. Which statement is FALSE?

The answer is THIS IS LEGAL AS LONG AS THE BROKER WITHDRAWS FROM THE LISTING FIRST. A secret profit or overage is considered to be fraud, misrepresentation, concealment, and/or dishonest dealing and could expose the licensee to liability to both seller and buyer for the full amount of the secret profit, and might further give rise to disciplinary proceedings against the licensee.

Which requirement does NOT have to be accomplished before a deed can be recorded?

The answer is THREE WITNESSES. Before a deed can be recorded, it must first be acknowledged by the grantor and witnessed. The acknowledgment must be certified by a notary public. Two witnesses (NOT three) are required. The notary may serve as one of the witnesses.

Which property is exempt from Title VIII of the Civil Rights Act of 1968?

The answer is THREE-UNIT DWELLING IN WHICH THE OWNER RESIDES IN ONE OF THE UNITS. Title VIII of the Civil Rights Act (Fair Housing Act) exempts rentals in multifamily dwellings with four or fewer family units provided the owner lives in one of the units. In this case, there are three units, and the owner resides in one of the units. Remember, however, that racial discrimination is illegal in any real estate transaction under federal law.

A sales associate received an earnest money deposit on Monday. The sales associate gave the check to his broker on Tuesday. By end of business on which day must the check be deposited into the escrow account?

The answer is THURSDAY. The broker has until the end of the third business day (Thursday) to deposit the funds. The three business-day time period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker. In this case, the first day of the three-business-day period is Tuesday.

The borrower retains equitable title in which mortgage theory?

The answer is TITLE. In title theory states, the borrower retains equitable title to the property. Once the debt is paid in full, the lender conveys legal title to the borrower.

All of the following are reasons for appraising a business and its assets EXCEPT

The answer is TO ENSURE COMPLIANCE WITH ALL PERTINENT STATE AND FEDERAL SECURITIES LAWS. Reasons for valuation of businesses include: to obtain financing; eminent domain proceedings; and destruction of the real property associated with a business.

A real estate company represents a motel owner who wishes to list one of his motels for sale. The owner has told the listing agent that he does NOT want to sell the motel to any racial minorities.

The answer is TO REFUSE TO SELL OR LEASE ANY REAL PROPERTY BASED ON ONE'S RACE IS A VIOLATION OF THE FEDERAL CIVIL RIGHTS ACT OF 1866. All racial discrimination, whether private or public in the sale or rental of property, is prohibited and illegal

A couple tours several model homes in a new subdivision. The couple decides to purchase one of the available lots and have the builder construct one of the model floor plans on the lot. Which type of construction is this?

The answer is TRACT HOME. Tract homes are a type of speculative building. A new subdivision will typically feature several model homes. Buyers select a floor plan from the models and a lot on which to have a home constructed in the new subdivision.

In Florida, which type of brokerage relationship is presumed?

The answer is TRANSACTION BROKER. Under Florida law, it is presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established.

A title theory state is one in which a mortgage

The answer is TRANSFERS TITLE TO THE LENDER OR ESCROW AGENT UNTIL THE LOAN IS PAID. Title theory is a legal concept that vests title to mortgaged property in the name of the mortgagee (lender) or a third party.

Which brokerage disclosure notice must be signed or initialed by the buyer or seller before implementation?

The answer is TRANSITION TO TRANSACTION BROKER. A single agent relationship may be changed to a transaction broker relationship (or another relationship), provided the agent first obtains the principal's written consent to the change in relationship. The buyer or seller (or both) must either sign or initial the consent to transition to transaction broker notice.

The law that requires that the annual percentage rate be disclosed to consumers is the

The answer is TRUTH-IN-LENDING ACT. The Truth-in-Lending Act requires that lenders disclosure the annual percentage rate (APR) of interest and finance charges imposed on consumers

A real estate brokerage office receives an earnest money deposit check on Thursday. By end of business on which day must the funds be deposited into the escrow (trust) account?

The answer is TUESDAY. Brokers must place trust funds into their escrow account no later than the end of business of the third business day following receipt of the funds.

What are the dimensions of a parcel of land formed by sections 25, 26, 35, and 36 of a township?

The answer is TWO MILES BY TWO MILES. Sections 25, 26, 35, and 36 form a square. Because each section is one mile square, the resulting square is two miles by two miles, or two miles square.

After what period of time does an involuntary inactive license automatically expire and become null and void?

The answer is TWO YEARS. When a license is in involuntary inactive status for more than two years, the license automatically expires and it becomes null and void.

Who renders a determination as to whether probable cause exists?

The answer is TWO-FREC-MEMBER PANEL. The probable-cause panel is composed of two members of the FREC. The probable-cause panel's sole responsibility is to determine whether probable cause exists.

A home has 2,000 square feet of living area and 485 square feet of garage. The reproduction cost new is $98 per square foot for living area and $55 per square foot for finished garage area. The site measure 75 feet wide by 120 feet deep and is valued at $5 per square foot. The economic life of the structure is estimated to be 60 years. The house is 10 years old. What is the value of the property using the cost-depreciation approach (round figures to the nearest dollar)?

The answer is $230,562. The solution is: 2,000 square feet × $98 = $196,000 living area; 485 square feet × $55 = $26,675 garage area; $196,000 + $26,675 = $222,675 reproduction cost new; $222,675 ÷ 60 years economic life × 10 years = $37,112.50 accrued depreciation (rounded up to $37,113). $222,675 - $37,113 = $185,562 depreciated structure; 75 feet wide × 120 feet deep = 9,000 square feet for lot;9,000 × $5 per square foot = $45,000 land value; $185,562 + $45,000 = $230,562 property value

Comparable A sold for $286,900. The comparable is a 3-bedroom, 2-bath home with a loft and swimming pool. The loft is worth $30,000; the pool is worth $15,000. The subject property is a 3-bedroom, 2½- bath home. The extra half bath is worth $12,000. What is the adjusted sale price of Comparable A?

The answer is $253,900. The solution is:$286,900 - $30,000 (loft) - $15,000 (pool) + $12,000 (half bath) = $253,900.

A development company purchased 1,000 acres of land from a foreign seller for $2,850,000. Federal law requires the buyer to withhold from the seller and pay to the IRS approximately

The answer is $285,000. The IRS requires that buyers withhold 10 percent of the gross sale price. The buyer must report the purchase and pay the IRS the amount withheld.

A property owner has lived in her home for seven years. This year, the owner refinanced her mortgage loan in order to reduce her monthly housing expense. The property owner may NOT deduct which housing expense on her annual federal income tax return?

The answer is $3,000 POINTS CHARGED TO REFINANCE THE MORTGAGE LOAN. Points are deductible in the year paid, unless they are paid when refinancing a loan. In such cases, the points must be deducted over the entire life of the mortgage loan.

A buyer pays $198,000 for a home and secures a mortgage for 80 percent of the purchase price. The mortgage is for 5 percent plus 2 points. How much did the buyer pay in discount points?

The answer is $3,168. The solution is: $198,000 purchase price × .80 rate = $158,400 mortgage; $158,400 × .02 rate = $3,168.

Rent is $2,500 per month plus 3 percent of gross sales. The total rent for last month was $3,400. Calculate the gross sales for the same month.

The answer is $30,000. The solution is: $3,400 total rent - $2,500 base rent = $900 rent based on gross sales; Part ÷ Rate = Whole; $900 ÷ .03 rate = $30,000 gross sales.

You have been granted homestead tax exemption. Your assessed property value is $395,000. What is your taxable property value for county taxes?

The answer is $345,000. The solution is: $395,000 assessed value - $50,000 homestead exemption = $345,000 taxable value.

An investor incurred a 20 percent loss when she sold a 10-acre parcel (Tract A) for $150,000. She also owns a 25-acre parcel (Tract B) for which she paid $300,000. How much must the investor sell Tract B for if she wishes not only to recover the loss from Tract A but also to realize a 20 percent profit on the investment in Tract B? -$360,000 -$397,500 -$420,500 $510,000

The answer is $397,500. The solution is: Tract A: 100% - 20% = 80% = $150,000 sale price; $150,000 divided by .80 = $187,500 cost; $187,500 cost - $150,000 sales price= $37,500 loss from Tract A. Tract B: $300,000 cost + 20% profit = $300,000 x 1.20 = $360,000 sale price; $360,000 sale price to make a 20% profit + $37,500 loss from Tract A = $397,500 target sale price for Tract B.

An investor incurred a 20 percent loss when she sold a 10-acre parcel (Tract A) for $150,000. She also owns a 25-acre parcel (Tract B) for which she paid $300,000. How much must the investor sell Tract B for if she wishes not only to recover the loss from Tract A but also to realize a 20 percent profit on the investment in Tract B?

The answer is $397,500. The solution is: Tract A: 100% - 20% = 80%; 80% = $150,000 sale price; $150,000 ÷ .80 = $187,500 cost; $187,500 cost - $150,000 sale price = $37,500 loss from Tract A. Tract B: $300,000 cost + 20% profit = $300,000 × 1.20 = $360,000 sale price; $360,000 sale price to make a 20% profit + $37,500 loss from Tract A = $397,500 target sale price for Tract B.

A corner lot measures 120 by 100 feet. Street paving costs are $55 per running foot, and the city will pay 30 percent of paving costs. All of the streets in the neighborhood are being paved. What is the property owner's assessment?

The answer is $4,235. The solution is: 120 feet + 100 feet = 220 total feet × $55 = $12,100; $12,100 × .30 = $3,630; $12,100 - $3,630 = $8,470 property owners' share; $8,470 ÷ 2 sides of street = $4,235 assessment.

A broker lists a property. A 6 percent commission is agreed to, and the listing is placed in the MLS. The sale commission is to be split as follows: 45 percent to the listing broker and 5 percent to the selling broker. A sales associate who works for a cooperating broker sells the property for $245,000. The sales associate's agreement with her employer calls for a 60 percent share of all commission she brings to the company. How much is due to the sales associate? -$3,969 -$4,851 -$6,615 $8,820

The answer is $4,851. The solution is: $245,000 sale price x .06 = $14,700 total sale commission; $14,700 commission x .55 rate = $8,085 commission to selling office $8,085 x .60 rate = $4,851 selling sales associate's split

A broker lists a property. A 6 percent commission is agreed to, and the listing is placed in the MLS. The sale commission is to be split as follows: 45 percent to the listing broker and 55 percent to the selling broker. A sales associate who works for a cooperating broker sells the property for $245,000. The sale associate's agreement with her employer calls for a 60 percent share of all commissions she brings to the company. How much is due the sales associate?

The answer is $4,851. The solution is: $245,000 sale price × .06 rate = $14,700 total sale commission; $14,700 commission × .55 rate = $8,085 commission to selling office; $8,085 × .60 rate = $4,851 selling sales associate's split.

A borrower has a level-payment, amortized mortgage of $42,000 at 12½ percent for 30 years. The monthly payment is $448.25. What amount of interest will be paid from the second monthly payment?

The answer is $437.39. The solution is: $42,000 mortgage × .125 rate = $5,250 annual interest; $5,250 ÷ 12 months = $437.50 interest month 1; $448.25 PI - $437.50 = $10.75 principal month 1; $42,000 - $10.75 = $41,989.25 outstanding balance; $41,989.25 × .125 rate = $5,248.6563 annual interest; $5,248.6563 ÷ 12 months = $437.39 interest month 2

Under Florida Statute 455, the DBPR may impose which penalty for unlicensed practice of real estate?

The answer is $5,000 FINE PER COUNT. Revocation and suspension are penalties that may be imposed against a holder of a real estate license. The DBPR is authorized to issue fines of up to $5,000 per count to a person it finds guilty of unlicensed activity.

What amount of a broker's own personal funds may the broker place in the property management escrow account?

The answer is $5,000. A broker may keep up to $5,000 of the broker's personal funds or brokerage funds in a property management escrow account.

How much personal money may a broker place in a property management escrow account?

The answer is $5,000. A broker may place up to $5,000 of personal or business funds in a property management escrow account

A sales associate receives an earnest money deposit on Saturday. When does the sales associate have to give the deposit to the broker? Sunday, Monday, Tuesday, Wednesday

Monday. The sales associate has until the end of the next business day to deliver the deposit to the broker.

Government control influence the real estate market both directly and indirectly. An example of an indirect control is... -zoning ordinances. -building moratoriums. -monetary policy. -building codes.

Monetary policy. Governments exercise indirect controls through the use of such tools as the monetary policies of the federal government and planned future growth policies of local governments.

Which type of construction involved pouring the slab directly on the ground with the footers? -Platform -Floating -Pier -Monolithic

Monolithic. Slab-on-grade construction involves pouring a concrete slab directly on the ground. If the footers are poured with the slab, it is a monolithic slab.

Which statement MOST accurately describes the first year of a 30-year level-payment, fixed rate mortgage?

Monthly payments remain constant, and the interest portion comprises the majority of the payments.

An individual who repeatedly writes bad checks can be charged with

Moral Turpitude involves conduct contrary to honest, good morals, accepted custom (i.e. writing bad checks, crimes of larceny)

Factors that affect the supply side of the real estate market do NOT include availability of... -land. -skilled labor. -material. -mortgage credit.

Mortgage credit. Variables that influence supply are availability of: (1) skilled labor; (2) construction loans and financing; (3) land; and (4) materials. Availability of mortgage credit influences demand.

Which of the following is tax deductible on your primary residence?

Mortgage interest

Which of the following is tax deductible?

Mortgage interest

Which expense is NOT subtracted from potential gross income in order to derive the net operating income of a commercial property? -Hazard insurance -Vacancy and collection loss -Reserve for replacements -Mortgage payment

Mortgage payment. Operating expenses are grouped into three categories. Fixed expenses include property taxes and hazard insurance. Reserve for replacements is a type of operating expense. Mortgage payments are not considered an operating expense because they are not directly associated with the maintenance and operation of a property.

Which pair does NOT belong together? -Equity of redemption-remedy for borrower to prevent foreclosure -Mortgagee-borrower -Mortgagor-gives the mortgage as security for the debt -Due-on-sale clause-assumption not allowed

Mortgagee-borrower. The mortgagee is the lender (not the borrower).

Which type of title insurance policy is transferable? -Owner -Mortgagee -Vendor -Mortgagor

Mortgagee. The mortgagee (lender) policy is transferable.

What are the total property taxes if the assessed value is $265,800 and the homeowner qualifies for homestead exemption? The city tax rate is 10 mills, the county tax rate is 9.5 mills, and the school board tax rate is 5.8 mills.

The answer is $5,604.74. The solution is: $265,800 - $50,000 exemption = $215,800 taxable value; 10 city mills + 9.5 county mills + 5.8 school mills = 25.3 or .0253 mills; $215,800 × .0253 tax rate = $5,459.74 taxes due; $25,000 additional exemption × .0058 school board mills = $145 additional taxes due; $5,459.74 + $145 = $5,604.74 total taxes due.

The price per square foot for three comparable lots is as follows: Lot 1: $5.25; Lot 2: $6.00; and Lot 3: $6.30. Based on inspection of the properties and considerations such as shape and location, the appraiser decides to use a weighted averaging technique of 20 percent weight for Lot 1 and 40 percent weight each for Lots 2 and 3. What is the average price per square foot?

The answer is $5.97. The solution is: $5.25 × .20 = $1.05; $6.00 × .40 = $2.40; $6.30 × .40 = $2.52; $1.05 + $2.40 + $2.52 = $5.97 per square foot.

The maximum amount that may be collected from the Real Estate Recovery Fund as a result of a single real estate transaction is

The answer is $50,000. Payments for claims arising out of the same transaction are limited, in total, to $50,000 or the unsatisfied portion of a judgment claim, whichever is less.

Three claimants have come before the Commission requesting relief from the Real Estate Recovery Fund. All three claimants were involved in the same real estate transaction. Payment for their claims, in the aggregate, is limited to

The answer is $50,000. The maximum payment from the recovery fund for damages associated with a single transaction is $50,000

What is the maximum finder's fee that may be paid in the form of a credit toward rent paid to the tenant for referring a person to the management company if that person later becomes a tenant of the complex?

The answer is $50. A property management firm or an owner of an apartment complex may pay a finder's fee (or referral fee) of up to $50 to an unlicensed person who is a tenant of the apartment complex.

Homeowners who have homestead exemption on their current home in either of the two preceding years can transfer up to what amount of their Save Our Home benefit to a new home?

The answer is $500,000. A homesteaded property owner can transfer up to $500,000 of Save Our Home benefit to a new homestead.

A woman has homesteaded her residence. Her home has an assessed value of $279,000. The woman is a nonveteran who is totally and permanently disabled due to a serious car accident. She is also legally blind. What is the cumulative tax exemption for county taxes on the homesteaded residence?

The answer is $51,000. $25,000 base homestead exemption + $25,000 additional homestead exemption + $500 disability + $500 blind = $51,000.

A limited partnership plans to purchase an apartment building that has a monthly net income of $5,200 and monthly expenses of $1,400. If the partnership is to get a 12 percent return on its investment, what should it pay for the property?

The answer is $520,000. The solution is: $5,200 monthly net income × 12 months = $62,400 annual NOI; Income ÷ Rate = Value; $62,400 ÷ .12 rate of return = $520,000 target price.

To get a mortgage loan of $98,500, a buyer has agreed to pay all state tax costs incurred by creation of the new mortgage. What is the total cost? -$197 -$344.75 -$541.75 -$689.50

The answer is $541.75. The solution is: $98,500 mortgage divided by $100 increments = 985 taxable increments 985 x $.35 = $344.75 doc stamps on mortgage note $98,500 x $.002 rate = $197 intangible tax $344.74 + 197 = 541.75

To get a mortgage loan of $98,500, a buyer has agreed to pay all state tax costs incurred by creation of the new mortgage. What is the total cost?

The answer is $541.75. The solution is: $98,500 mortgage ÷ $100 increments = 985 taxable increments; 85 × $.35 = $344.75 doc stamps on mortgage note; $98,500 × $.002 rate = $197 intangible tax; $344.75 + $197 = $541.75.

A commercial property has a potential gross income of $75,000. Vacancy and collection losses are 5 percent of PGI. Additional operating expenses total $16,500. Payments on the first mortgage are $1,500 per month. Using a capitalization rate of 10 percent, which amount is an accurate estimate of the property's value?

The answer is $547,500. The solution is: $75,000 PGI × .05 rate = $3,750 vacancy and collection loss; $75,000 - $3,750 = $71,250 EGI; $71,250 - $16,500 = $54,750 NOI; $54,750 ÷ .10 = $547,500.

A homesteaded single-family residence has an assessed value of $92,800. The owner is a 25 percent service-disabled veteran who is 75 years of age. What is the total homestead tax exemption?

The answer is $55,000. The solution is: $50,000 homestead exemption + $5,000 disability = $55,000 total homestead tax exemption.

A senior sales associate receives 60 percent of all sale commissions earned. His broker has listed a motel for $1,480,000. The listing contract specified a 6.5% sale commission for the first $600,000 of the selling price, 7.5% for the next $800,000, and 8.25% on the actual sale price exceeding $1.4 million. What will the sales associate's commission be if he sells the motel for the list price? -$54,450 -$63,360 -$95,000 -$105,600

The answer is $63,360. The solution is: $600,000 x .065 = $39,00 first increment; $800,000 x .075 = $60,000 second increment; $80,000 x .0825 = $6,600 third increment; $39,000+$60,000+$6,6000=$105,600 total commission $105,600 x .60 share = $63,360 sales associate's split

A senior sales associate receives 60 percent of all sale commissions earned. His broker has listed a motel for $1,480,000. The listing contract specified a 6.5 percent sale commission for the first $600,000 of the selling price, 7.5 percent for the next $800,000, and 8.25 percent on the actual sale price exceeding $1.4 million. What will the sales associate's commission be if he sells the motel for the listed price?

The answer is $63,360. The solution is: $600,000 × .065 = $39,000 first increment; $800,000 × .075 = $60,000 second increment; $80,000 × .0825 = $6,600 third increment; $39,000 + $60,000 + $6,600 = $105,600 total commission; $105,600 × .60 share = $63,360 sales associate's split

An income-producing property has a projected effective gross income of $65,000. Expenses are estimated at 20 percent of effective gross income. An appraiser has determined that an appropriate capitalization rate is 8 percent. What is the estimated market value of this property?

The answer is $650,000. The solution is: $65,000 EGI × .20 rate = $13,000 expenses;$65,000 - $13,000 = $52,000 NOI; NOI ÷ Rate = Value; $52,000 ÷ .08 cap rate = $650,000 value.

A buyer was defrauded by a real estate licensee. The buyer is awarded a judgment against the licensee in the amount of $7,000 damages plus $2,300 for attorney's fees and court costs. The buyer has been unable to collect on the judgment, but it is determined that the buyer may seek reimbursement from the Real Estate Recovery Fund. How much can the buyer recover from the Fund?

The answer is $7,000. The buyer can recover the amount of the judgment up to $50,000 or the unpaid amount of the judgment, whichever is less. The buyer cannot be reimbursed from the Recovery Fund for court costs or attorney's fees.

The city has decided to pave the streets of a recently incorporated community. Property owners are to be assessed 70 percent of the cost of paving, which is found to be $25 per foot. The 70 percent assessment tax is to be apportioned between owners on both sides of the streets. What will the special assessment be for a property with 80 feet of frontage?

The answer is $700. The solution is: $25 cost × 80 feet = $2,000 total cost of paving; $2,000 × .70 property owner's rate = $1,400 non-city portion; $1,400 ÷ 2 sides of street = $700 home owner's cost.

In 2010, a taxpayer had a $30,000 loss from the sale of Investment Property A, a $28,000 gain from the sale of Investment Property B, and a $3,000 loss from the sale of his principal residence. All three properties were owned for more than 12 months. The taxpayer also earned a $75,000 salary. What is the 2010 total income for tax purposes, using just this information?

The answer is $73,000. The solution is: $30,000 loss Property A + $28,000 gain Property B = $2,000 net loss from sale of investment properties; $75,000 salary - $2,000 loss = $73,000 taxable income. (Note: You cannot deduct loss from the sale of a principal residence.)

A building is valued at $420,000 when NOI is capitalized at a rate of 8 percent. NOI is 40 percent of effective gross income. Calculate the effective gross income.

The answer is $84,000. The solution is: $420,000 × .08 cap rate = $33,600 NOI; $33,600 NOI ÷ .40 rate = $84,000 EGI.

You have a VA loan of $89,000 at 6 percent with a 30-year term. The monthly principal and interest payment is $533.60. What portion of the second month's payment will apply to amortization of the mortgage? -$88.60 -$89.04 -$177.20 -$444.56

The answer is $89.04. The solution is: $89,000 loan amount x .06 rate = $5,340 annual interest rate divided by 12 months = $455 interest rate month 1; $533.60 monthly payment -$455 interest = 88.60 principal paid month 1; $89,000 loan - $88.60 principal paid = $88.911.40 outstanding balance; $88,911.40 x .06 rate = $5334.684 divided by 12 months = $444.557 or $444.56 (rounded) $533.60 month payment - $444.56 interest = $89.04 principal paid month 2.

You have a VA loan of $89,000 at 6 percent with a 30-year term. The monthly principal and interest payment is $533.60. What portion of the second month's payment will apply to amortization of the mortgage?

The answer is $89.04. The solution is: $89,000 loan amount × .06 rate = $5,340 annual interest ÷ 12 months = $445 interest month 1; $533.60 monthly payment - $445 interest = $88.60 principal paid month 1; $89,000 loan - $88.60 principal paid = $88,911.40 outstanding balance; $88,911.40 × .06 rate = $5334.684 ÷ 12 months = $444.557 or $444.56 (rounded); $533.60 month payment - $444.56 interest = $89.04 principal paid month 2.

A sales associate receives 45 percent of sales commissions earned as a result of his sales efforts. The broker lists a property for $248,000, with a 7 percent sales commission agreed to by the owner. The sales associate sells the property at the listed sale price. What is the broker's share of the commission?

The answer is $9,548. The solution is: $248,000 sale price × .07 rate = $17,360 total commission; $17,360 × .55 broker rate = $9,548 broker's share of commission.

Which property is immune from property taxes?

Municipal Airport - immune properties are city, county, state and federal gov't properties - others are exempt only, which are subject to taxes, but are released from obligation

An applicant for mutual recognition:

Must have a real estate license in another state

A case in which the interest paid for borrowed funds is more than the overall rate of return to an investor is an example of... -yield. -positive leverage. -negative leverage. -liquidity.

Negative leverage. If the interest paid for borrowed funds is more than the overall rate of return from an investment, the investor's real yield is decreased, resulting in negative leverage.

When evaluating a business, the difference between asset and liabilities is?

Net worth

A lease that provides for the lessee to pay a fixed rent plus some of the property's costs is which type of lease? Net, Gross, Variable, Percentage

Net. In a net lease, the tenant (lessee) pays fixed rent plus property costs such as maintenance and operating expenses.

Define alluvion.

New deposits of land as a result of accretion.

Report the deadline for the following: Sales associate must deliver escrow deposits to their broker by the end of...

Next business day

"Nolo contendere" is a term the means... no compensation is paid for services, no contest, no one witnessed the signature, property was seized from the owner

No contest. The Latin term "nolo contendere" means "I do not wish to contest." In legal proceedings it is a plea by a defendant in a criminal case declaring that the individual will not make a defense, but the individual does not admit to guilt.

When a Veteran gets a loan that is guaranteed by the Veterans Administration:

No down payment is required

The market value of an apartment building is $475,900. The investor has leveraged $380,720. What is the investor's equity in the property?

The answer is $95,180. The solution is: $475,900 market value - $380,720 leverage amount = $95,180 equity.

Change 5 percent to a decimal.

The answer is .05. To change any percentage to an equivalent decimal, place a decimal point two places to the left of the number and drop the percent sign. (This is the same as dividing the percentage figure by 100.) If necessary, add a zero to the left to allow moving the decimal point two places to the left.

Change 5 percent to a decimal. -.05 -.005 -.0005 -.00005

The answer is .05. To change any percentage to an equivalent decimal, place a decimal point two places to the left of the number and drop the percent sign. (This is the same as dividing the percentage figure by 100.) If necessary, add a zero to the left to allow moving the decimal point two places to the left.

Change 1/16 and 1/25 to decimals.

The answer is .0625 AND .04. To change a fraction to a decimal, divide the top number in the fraction (numerator) by the bottom number (denominator).

Change 1/16 and 1/25 to decimals. -.06 and .25 -.06 and .025 -.0625 and .04 -.016 and .25

The answer is .0625 an .04. To change a fraction to a decimal, divide the top number in the fraction (numerator) by the bottom number (denominator).

Change 1/8 o a decimal.

The answer is .125. The change a fraction to a decimal, divide the top number in the fraction (numerator) by the bottom number (denominator).

Change 1/8 to a decimal.

The answer is .125. To change a fraction to a decimal, divide the top number in the fraction (numerator) by the bottom number (denominator).

Charging 2 discount points has the effect of increasing the lender's yield on a mortgage loan by what percent?

The answer is .25. Each discount point increases the lender's yield by approximately 1/8 of 1 percent or .00125. Therefore, 2 discount points would increase the yield by approximately 2 × .00125 = .0025 or .25 percent.

Change 42½ percent to a decimal.

The answer is .425. To change any percentage to an equivalent decimal, place a decimal point two places to the left of the number and drop the percent sign. (This is the same as dividing the percentage figure by 100.) If necessary, add a zero to the left to allow moving the decimal point two places to the left.

Change 4/5 to a decimal.

The answer is .8. The change a fraction to a decimal, divide the top number in the fraction (numerator) by the bottom number (denominator).

Change 4/5 to a decimal.

The answer is .8. To change a fraction to a decimal, divide the top number in the fraction (numerator) by the bottom number (denominator).

Change 85 percent and 155 percent to decimals.

The answer is .85 AND 1.55. To change any percentage to an equivalent decimal, place a decimal point two places to the left of the number and drop the percent sign. (This is the same as dividing the percentage figure by 100.) If necessary, add a zero to the left to allow moving the decimal point two places to the left.

Change 20 percent and 25 percent to fractions.

The answer is 1/5 AND 1/4. This exercise is designed to give you practice converting percentages into fractions.

Change 20 percent and 25 percent to fractions.

The answer is 1/5 and 1/4.

A broker made a request to the Commission that it issue an escrow disbursement order (EDO) regarding disputed escrowed funds. Prior to the EDO being issued, the escrow dispute was settled between the parties. How long does the broker have to notify the FREC that the matter has been resolved?

The answer is 10 BUSINESS DAYS. If a broker requests an EDO and the escrow dispute is either settled or goes to court before the EDO is issued, the broker must notify the FREC within 10 business days.

What is a building's vacancy rate if 621 units are rented in a 690-unit building?

The answer is 10 PERCENT. 690 total units - 621 rented units = 69 vacant units. 69 units ÷ 690 total units = .10 or 10 percent vacancy rate.

What is permission to continue to use in spite of enacted zoning ordinance?

Nonconforming use

A small general store that existed before a change to residential zoning would be an example of a... -special exception. -variance. -PUD. -nonconforming use.

Nonconforming use. If a property's use was lawfully established but no longer conforms to current zoning, the use is allowed to continue as a nonconforming use.

Which legal instrument contain the loan amount, interest rate, and loan term? -Mortgage -Deed -Note -Hypothecate

Note. The note states the amount of indebtedness, interest rate, repayment method, and term or time period to repay.

A warning for an initial offense that allows a licensee to correct the minor infraction without consequence is known as a(n)... -citation -letter of reprimand -notice of noncompliance -administrative fine

Notice of noncompliance. A notice of noncompliance is a warning for a minor violation of an initial offense that allows a licensee 15 days to correct the minor infraction without consequence.

A broker who has a good faith doubt regarding who is entitled to escrow funds should take which action? -Request an escrow disbursement order from the DBPR -Notify the FREC in writing of the good faith doubt within 15 business days -Institute one f the settlement procedures within 15 business days -Send a certified letter to the parties to the contract indicating that they will forfeit the funds if they do not make a claim within 30 business days

Notify the FREC in writing of the good faith doubt within 15 days. If a broker has a good faith doubt as to which party should receive the escrowed property, the broker must notify the FREC, in writing, within 15 business days of having such doubt.

Which method of purchasing mortgaged property relieves the seller of any liability in the even of default and makes the buyer personally liable for the existing mortgage? -Subject to the mortgage -Assumption -Novation -Wraparound

Novation. Novation is the substitution of a new obligation for an old one, or the substitution of new parties to an agreement accept a new debtor in place of an old one. If mortgage property is sold, a lender releases the seller and creates a new note with the buyer, who becomes the individual solely responsible for the debt.

When are property taxes due for the current year?

November 1

Which entity charters and regulates federal saving associations? -Federal Reserve -Office of Thrift Supervision -Federal Deposit Insurance Corporation -Savings Association Insurance Fund

Office of thrift supervision. The Financial Institution Reform, Recovery, and Enforcement Act of 1989 created the Office of Thrift Supervision to charter and regulate member federal saving associations.

How many acres are in a parcel described as the SW ¼ of the NE ¼ of the SE ¼?

The answer is 10. 640 ÷ 4 ÷ 4 ÷ 4 = 10 acres.

A broker who changes business address must notify the Commission of the address change within how many days?

The answer is 10. The FREC requires that licensees notify the Commission in writing of any change in business address within 10 days after the change. The license ceases to be in force until the Commission receives proper notification

A prospective tenant purchased a rental list from a broker and then rented a duplex that the list indicated included all utilities. The tenant discovered that only water was included in the rent and notified the broker within the legislated time limit. The tenant is entitled to

The answer is 100 PERCENT OF THE FEE PAID. If the information provided to the prospective tenant is not current or is inaccurate in any way, the full fee must be refunded on request.

Which section is located directly south of section 1?

The answer is 12. Section 12 is located directly south (below) section 1.

An income-producing property has a potential annual gross income of $98,500. Vacancy and collection losses are estimated at 10 percent of potential gross income. Expenses are estimated at $45,000. The estimated value of the property is $350,000. What is the capitalization rate for this property?

The answer is 12.47 percent. The solution is: $98,500 PGI × .10 rate = $9,850 vacancy and collection loss; $98,500 - $9,850 = $88,650 EGI; $88,650 - $45,000 expenses = $43,650 NOI; NOI ÷ Value = Rate; $43,650 ÷ $350,000 value = .1247 or 12.47% cap rate.

How many acres are in a parcel described as the SW ¼ of the NE ¼ and the SE ¼ of the S ½?

The answer is 120. 640 ÷ 4 ÷ 4 = 40 acres; 640 ÷ 4 ÷ 2 = 80 acres; 40 + 80 = 120 acres.

A residential property recently sold for $163,900. The property rents for $1,225 per month. What is the GRM for this property? (Round to nearest whole number.)

The answer is 134. The solution is: $163,900 sale price ÷ $1,225 rent = 133.7959 (rounded to 134 GRM).

Which property would be defined as agricultural property under Chapter 475 of the Florida statutes?

The answer is 15 ACRES OF UNDEVELOPED AGRICULTURAL LAND. Agricultural property is defined in Chapter 475, F.S., to mean agricultural property of more than ten acres.

A borrower does NOT have the right to cancel which loan contract within three business days?

The answer is 15-YEAR MORTGAGE TO PURCHASE A HOME. A borrower does not have the right to cancel home acquisition loans.

A developer who builds and sells new condominium units must allow buyers the opportunity to cancel the purchase agreement within how many days of signing the contract?

The answer is 15. Purchasers of new condominium units may cancel the contract within 15 days of signing the contract and receipt of the required documents.

A tenant notifies the landlord that the tenant will not be renewing the lease. The tenant leaves the unit in excellent condition. After inspection of the premises, the landlord decides that the tenant is eligible to receive a full refund of the damage deposit. Within how many days must the landlord return the deposit?

The answer is 15. The landlord has 15 days to return the security deposit and any accrued interest, if applicable, provided the landlord does not intend to make a claim on the security deposit.

How many days' notice must be given to terminate a month-to-month tenancy?

The answer is 15. When the tenancy is a month-to-month tenancy, the landlord must give the tenant a minimum of 15 days' notice to vacate.

How many square miles in a section?

One

How far is it from the North border of section 16 to South border section 4:

One mile

How far is it from the North border of section 16 to the South border of section 4:

One mile

The Value Adjustment Board is composed of... -the city manager, property appraiser, and three other elected officials. -three school board members and two county commissioners. -two school board members and three county commissioners. -one school board member, two county commissioners, and two citizen members.

One school board member, two county commissioners, and two citizen members. The board is made up of five members.

How many Florida Real Estate Commission members may be licensed as a real estate sales associate? One, Two, Three, Four

One. Four members must be licensed as brokers and two members must be consumer members. The seventh member may be either a licensed broker or a sales associate who has held an active licenses during the two years proceeding appointment.

Within one year, how many times may a student who failed the end-of-course examination retest without repeating the course? One, Two, Three, Unlimited

One. Within one year of the original examination, a student may retest a maximum of one time. Otherwise, a student failing the end-of-course exam must repeat the course prior to being eligible to retake the end-of-course examination.

How many members of the Florida Real Estate Commission must be consumer members who have never been real estate brokers or sales associates?

Only 2 members must be consumer members who have never been brokers or sales associates.

A real estate salesperson can draw up a lease:

Only if he uses a particular form in residential transaction

A real estate salesperson can draw up a lease:

Only if she uses a particular form in residential transaction

Which type of listing allows the seller to list the property with other brokers?

Open listing allows the seller to list the property with multiple brokers. The first broker to secure a buyer who is ready, willing and able to purchase at the terms of the listing is the PROCURING CAUSE and earns the commission.

The Fed periodically buys and sells an inventory of securities to increase or decrease the amount of money in circulation known as... -the reserve require. -liquidation. -portfolio reallocation. -open-market operations.

Open-market operations. Open-market operations involve the purchase and sale of U.S. Treasury and federal agency securities.

The just value of a homesteaded property in Leon County is $425,800. The Consumer Price Index for the previous year was two percent. The property's just value increased the maximum allowed under the Save Our Home Amendment. By what percent did the just value increase?

The answer is 2 PERCENT. The just value of homesteaded property may be increased either three percent annually (based on the assessed value for the previous year), or the percentage change of the Consumer Price Index for the preceding year, whichever is less.

Change 40 percent to a fraction. -2/5 -2/4 -2/3 -4/5

The answer is 2/5.

Change 40 percent to a fraction.

The answer is 2/5. This exercise is designed to give you practice converting percentages into fractions.

Which FHA program is the most common FHA-insured mortgage program?

The answer is 203(b). Title II, Section 203(b) is the fixed-rate loan program for one- to four-family residences.

A developer purchased three oceanfront lots, each measuring 75 by 110 feet, for $20 per square foot. The developer later sold the lots for $200,000 each. What was the developer's percentage of profit on the sale of the three lots? (Round to nearest percent.)

The answer is 21 PERCENT. The solution is: 75 feet × 110 feet = 8,250 square feet; 8,250 × $20 per square foot = $165,000 cost per lot; $200,000 sale price - $165,000 = $35,000 amount made per lot; $35,000 ÷ $165,000 = .2121212 or 21 percent

Within what period of time must the seller be given a copy of a written listing agreement?

The answer is 24 HOURS. Pursuant to Florida Statute 475.25, a copy of the listing contract must be given to the owner(s) within 24 hours of execution.

44,032 ÷ 1.72 =

The answer is 25,600. This exercise is designed to give you practice dividing numbers by decimal numbers.

Change 75 percent into a fraction.

The answer is 3/4.

Change 75 percent to a fraction.

The answer is 3/4. This exercise is designed to give you practice converting percentages into fractions.

A Florida licensed real estate school A is using another Florida licensed real estate school B's name in its advertising to fool the consumer into thinking they are in a partnership. School A and School B are:

Ostensible partners

Two licensed Florida real estate brokers are sharing an office. Broker A has his name on the door as he properly should. Broker B does not have his name on the door. Broker A and Broker B are:

Ostensible partners

Which mortgage component increases as a result of negative amortization? -Mortgage payment -Loan term -Amount credited to principal -Outstanding loan balance

Outstanding loan balance. Negative amortization occurs when the monthly mortgage payment amounts are less than what is needed to pay the monthly interest costs, causing the unpaid loan balance to increase.

Which expense is deducted to derive effective gross income?

PGI - V&C = EGI EGI - OPEX = NOI Vacancy and collection losses

Which type of mortgage is used to pledge personal property and real estate as collateral for the mortgage loan? -Package -Commercial -Chattel -Jumbo

Package. A package mortgage loan includes both real and personal property as security for the debt.

If a corporation had a blanket mortgage on a property they were developing, they would need:

Partial release clause

If a corporation had a blanket mortgage on a property they were developing, they would probably want:

Partial release clause

What is a balloon payment loan?

Partially amortized; final payment is larger than others.

What is an express contract?

Parties show their intention in words

Which type of stock is NOT issued by all companies? -Preferred stock -Common stock -Debenture bonds -Convertible bonds

Preferred stock. Some firms do not issue preferred stock, but all corporations must have common stock because it represents ownership.

A student who fails the sales associate end-of-course exam must wait how long from the date of the original examination to retest?

The answer is 30 DAYS. Rule 61J2-3.008 of the Florida Administrative Code states that a student who fails the end-of-course exam must wait at least 30 days from the date of the original examination to retest. Alternatively, the student may retake the course and take an alternate exam after completing the course a second time.

An investor purchased three 200-foot lots on a lake for $700 per front foot each. The investor then subdivided the lots into six lakefront lots, which he then sold for $91,000 each. What was his percentage of profit on the sales?

The answer is 30 PERCENT. The solution is: 3 lots × 200 feet = 600 front feet; 600 front feet × $700 per front foot = $420,000 cost of lots; $91,000 lot sale price × 6 lots = $546,000; $546,000 - $420,000 = $126,000 profit; $126,000 profit ÷ $420,000 cost = .30 or 30% profit.

An elective share consists of what percent of a decedent's net estate, other than homesteaded property?

The answer is 30. An elective share is defined as consisting of 30 percent of the decedent's net estate, except for homesteaded property.

The FREC imposes an administrative penalty on a broker for violation of license law. Within how many days after the final order is filed does the order become effective?

The answer is 30. The final order becomes effective 30 days after it has been entered.

A licensee has how many days to file an appeal once the final order has been issued?

The answer is 30. The licensee-respondent may challenge the final order within 30 days by filing a petition for judicial review.

A parcel of land contains 93.5 acres. A developer has reserved 25 percent of the land for streets and green space. Applicable zoning regulations require a minimum of 9,750 square feet per residential lot. The number of permissible lots is

The answer is 313. The solution is: 93.5 acres × .25 rate = 23.375 acres for streets and green space; 93.5 - 23.375 = 70.125 acres for lots; 70.125 × 43,560 square feet per acre = 3,054,645 square feet for development; 3,054,645 ÷ 9,750 = 313.29 or 313 buildable lots.

When conventional lenders qualify a buyer for a mortgage, they usually require the buyer's total debt to income to be no more than what percent of gross monthly income?

The answer is 36. FNMA's benchmark ratio for total debt to income is 36 percent.

For licensing purposes, a resident of Florida is defined as a person who has resided in Florida for what period of time?

The answer is 4 MONTHS. For application and licensing purposes, the FREC rules define a resident of Florida as a person who has resided in Florida continuously for a period of four calendar months or more within the preceding year, regardless of whether the person resided in a recreational vehicle, hotel, rental unit, or other temporary or permanent location.

A prospective borrower has an estimated monthly housing expense of $900. The borrower's total monthly obligations are $1,200. Monthly gross income totals $2,950. What is the total obligations ratio? (Round to nearest percent.)

The answer is 41 PERCENT. The solution is: $1,200 total monthly obligations ÷ $2,950 monthly gross income = .4067 or 40.67% or 41% (rounded to the nearest percent).

7,735 ÷ .17 =

The answer is 45,500. This exercise is designed to give you practice dividing numbers by decimal numbers.

An individual on active duty with the U.S. Navy has up until what period of time after discharge from active duty to renew a real estate license?

The answer is 6 MONTHS. A licensee in good standing who is a member of the U.S. Armed Forces is exempt from the renewal provisions during active duty and for a period of up until six months after discharge from active duty.

A local lender charged 7 percent interest plus 4 points on a conventional mortgage loan. What was the approximate yield on the loan?

The answer is 7 1/2 PERCENT. The solution is: 4 points × 1/8 percent = 1/2 percent; 7 + 1/2 = 7 1/2 percent yield.

Students must pass the prelicense end-of-course exam with a grade of at LEAST what percent?

The answer is 70. Students must pass the school-administered, end-of-course exam with a grade of 70 percent or higher.

18,768 ÷ 25.5 =

The answer is 736. This exercise is designed to give you practice dividing numbers by decimal numbers.

What is the percentage passing score on the state license exam?

The answer is 75. The passing score on the state license exam is a grade of 75 percent or higher.

493.8 divided by .60 = -296.28 -823 -1,234.5 29,628

The answer is 823.

493.8 ÷ .60 =

The answer is 823. This exercise is designed to give you practice dividing numbers by decimal numbers.

315 apartments are rented in a 350-unit apartment building. What is the building's occupancy rate?

The answer is 90 PERCENT. 315 rented units ÷ 350 total units = .90 or 90 percent occupancy rate.

A homeowner has a residence with a value of $300,000 and a mortgage debt of $270,000. What is the loan-to-value ratio?

The answer is 90 percent. The solution is: $270,000 loan ÷ $300,000 value = .90 or 90%.

Which statement BEST describes the provisions of Florida's equitable right of redemption?

The answer is A BORROWER WHO IS IN DEFAULT, PRIOR TO FORECLOSURE, HAS THE RIGHT TO REPAY THE AMOUNT OWED PLUS INTEREST TO PREVENT FORECLOSURE. Equitable redemption allows the mortgagor to prevent foreclosure from occurring by paying the mortgagee the principal and interest due plus any expenses the mortgagee has incurred in attempting to collect the debt. The right of equity of redemption ends once the property has been sold at a foreclosure sale.

Which individual is NOT exempt from real estate licensure under F.S. 475?

The answer is A BUSINESS BROKER WHO NEGOTIATES LEASES OF BUSINESS PROPERTY. A real estate license is required for dealing in business opportunities.

A sales associate who is employed by an owner-developer who owns properties in the name of various entities may be issued

The answer is A GROUP LICENSE. A group license is issued to a sales associate or broker associate to work various properties owned by affiliated entities under one owner developer

To be granted a variance, a property owner must provide evidence that

The answer is A HARDSHIP RELATED TO LAND USE EXISTS. A variance is permission to build or use to relieve a hardship not caused by the owner.

An example of an ad valorem tax is

The answer is A PROPERTY TAX. Ad valorem means taxed according to value. Property taxes are calculated based on the just value of the property.

Leasehold estates do NOT include

The answer is A REMAINDER ESTATE. The other choices all concern lease estates. A remainder estate is associated with a life estate.

Which statement is FALSE regarding a real estate brokerage corporation?

The answer is A SALES ASSOCIATE MAY BE APPOINTED AS A DIRECTOR OF A REAL ESTATE BROKERAGE CORPORATION. A sales associate or broker associate may not be an officer or director of a real estate brokerage corporation.

When the equilibrium of the real estate market is upset by excess demand

The answer is A SELLER'S MARKET EXISTS. When the supply and demand equilibrium is upset by excess demand, a seller's market exists.

If a developer wants to develop a new subdivision, she must submit

The answer is A SUBDIVISION PLAT MAP TO THE PLANNING COMMISSION. A developer planning to create a subdivision must submit a subdivision plat to the planning commission for approval.

A real estate broker who works in a limited capacity for both the buyer and the seller in the same transaction is

The answer is A TRANSACTION BROKER. A transaction broker is a broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but who does not represent either party in a fiduciary capacity or as a single agent.

Which mortgage clause allows the mortgagee to demand immediate repayment of the entire unpaid loan in the event of default?

The answer is ACCELERATION. The acceleration clause authorizes the mortgagee to accelerate or advance the due date of the entire unpaid balance if the mortgagor fails to fulfill any promises stated in the mortgage instrument.

Which activity is NOT conducted by mortgage lenders?

The answer is ACCEPT SAVER'S DEPOSITS. Mortgage lenders (mortgage companies) are not financial intermediaries, and, as such, do not accept savings deposits.

Which brokerage relationship duty applies to all three types of brokerage relationships?

The answer is ACCOUNTING FOR ALL FUNDS. Loyalty and confidentiality are single agent duties. The duty to use skill, care, and diligence is a duty of transaction broker and single agent relationships. Accounting for all funds applies to no brokerage, transaction broker, and single agent relationships.

The process of land buildup from water-borne rock and soil is referred to as

The answer is ACCRETION. Accretion is the process of land buildup from water-borne rock, sand, and soil.

Which term describes the process of land buildup from water-borne rock, sand, and soil?

The answer is ACCRETION. Accretion is the process of land buildup from water-borne rock, sand, and soil.

Which element is NOT required of a valid real estate contract?

The answer is ACKNOWLEDGMENT. Real estate contracts must include consideration, be for a legal purpose, and include a meeting of the minds (offer and acceptance). Real estate contracts are not required to be acknowledged to be valid.

For tax purposes, real estate commission is classified as which type of income?

The answer is ACTIVE. Active income includes wages, tips, commissions, and so forth.

A person must hold an active real estate license if, for express or for implied compensation, the person

The answer is ADVERTISES A LIST OF AVAILABLE RENTAL PROPERTIES. Advertising rental lists is one of the services of real estate that requires a real estate license

A holder of a tax certificate may request a tax deed

The answer is AFTER HOLDING THE CERTIFICATE FOR AT LEAST TWO YEARS. The holder of a tax certificate can force a public auction of the property after two years (but no later than seven years) by requesting a tax deed.

A real estate licensee is obligated to communicate to the seller

The answer is ALL ORAL AND WRITTEN OFFERS, REGARDLESS OF HOW WORTHY THEY MAY BE IN THE BROKER'S OPINION. Unless a party has previously directed the licensee otherwise in writing, the licensee must present all offers in a timely manner.

Which statement is FALSE regarding a corporation for profit that is doing business as a real estate broker?

The answer is ALL STOCKHOLDERS MUST BE REGISTERED WITH THE DBPR AS INACTIVE BROKERS. Stockholders are not required to register with the Commission

The typical homebuyer today is concerned primarily with the

The answer is AMOUNT OF THE MONTHLY MORTGAGE PAYMENT. The typical homebuyer today is concerned primarily with the amount of the monthly mortgage payment.

A mortgage in which changes in the interest rate may cause changes in the monthly payment amount is called

The answer is AN ADJUSTABLE-RATE MORTGAGE. An adjustable-rate mortgage is a financing technique in which the lender can raise or lower the interest rate (which in turn adjusts the payment) to a set index

Another term for a formal complaint is

The answer is AN ADMINISTRATIVE COMPLAINT. A formal complaint (also referred to as an administrative complaint) is an outline of allegations of facts and charges against the licensee.

Which element is NOT essential in a valid real estate sale contract?

The answer is AN EARNEST MONEY DEPOSIT. Although a binder deposit is desirable to protect the seller, it is not required to make a contract valid.

Which information is confidential?

The answer is AN EXAMINEE'S GRADE ON THE STATE LICENSING EXAMINATION. Exam grades are considered confidential

The mortgage clause that requires the lender to waive the right to a deficiency judgment against the borrower, relieving the borrower of personal liability to repay the loan, is referred to as

The answer is AN EXCULPATORY CLAUSE. The exculpatory clause is a provision in a mortgage or note in which the lender waives the right to a deficiency judgment against the borrower and the borrower is relieved of personal liability to repay the loan

Which statement is FALSE regarding the relationship between price and demand?

The answer is AN INCREASE IN PRICE CAUSES AN INCREASE IN DEMAND. An increase in price causes a decrease (not an increase) in demand.

Failure to comply with the Statute of Frauds may result in

The answer is AN UNENFORCEABLE CONTRACT. The Statute of Frauds is a law that requires that certain real estate instruments and contracts affecting title to real property be in writing in order to be enforceable

A developer combines two adjacent parcels into a single parcel, making the property more suitable for development. Which appraisal term describes this process?

The answer is ASSEMBLAGE. Assemblage is the combining of two or more adjoining properties into one tract: the process of consolidating properties. This is usually done to increase the usability and value of the resulting consolidation.

All of the resources of a business, including tangibles and intangibles, are referred to as the

The answer is ASSETS. Assets are the entire resources of a business, including tangibles and intangibles such as accounts and notes receivable, cash, inventory, equipment, real estate, and goodwill.

The process of transferring ownership of a mortgage from one company to another is accomplished by executing which instrument?

The answer is ASSIGNMENT OF MORTGAGE. When ownership of a mortgage is transferred from one company to another, it is called an assignment. This process is accomplished by executing an assignment of mortgage.

Which housing is exempt from the familial status protection under the Fair Housing Act?

The answer is AT LEAST 80 PERCENT OF THE UNITS ARE OCCUPIED BY ONE OR MORE PERSONS 55 YEARS OF AGE OR OLDER. Certain housing for older persons is exempt from the familial status protection under the Fair Housing Act, provided all of the units are occupied by persons 62 years of age or older, or at least 80 percent of the units are occupied by one or more persons 55 years of age or older.

A real estate broker does NOT have to report to the FREC conflicting demands regarding escrowed property if the escrowed funds are maintained by which method?

The answer is ATTORNEY'S TRUST ACCOUNT. Real estate license law governs only broker's escrow accounts held in Florida commercial banks, credit unions, or savings associations. Real estate license law has no authority over title company escrow accounts or attorney escrow accounts. Therefore, if a title company or an attorney is the escrow agent, the broker has no obligation to report an escrow dispute to the FREC.

Which information must NOT be included in a listing agreement?

The answer is AUTOMATIC RENEWAL CLAUSE. Chapter 475, F.S., forbids including an automatic renewal clause in a listing agreement.

Which variable does NOT influence demand?

The answer is AVAILABILITY OF CONSTRUCTION LOANS. Availability of construction loans influences supply.

You want to replace a ceiling fan, and you have removed the old fixture. The wiring to the old fixture consists of three wires: a black wire, a white wire, and a green wire. Which wire is the hot wire?

The answer is BLACK. The hot wire is normally black. If the cable has two hot wires, one is black, and the other is typically red.

A real estate licensee advertises a property for sale that is listed by the company, but fails to disclose in the ad that the property is being advertised by a real estate company. This is known as what type of advertising?

The answer is BLIND. Blind advertising is advertising that fails to disclose the license name of the brokerage firm.

On Sunday at an open house, a sales associate receives two offers on a home listed for $300,000. One offer is for $250,000 cash at closing. The second offer is for $295,000 contingent upon the buyer securing a mortgage for 90 percent of the sales price. What action should the sales associate take? -Present both offers, explaining the details of each contract to the seller -Present the higher prices offer first, and if declined, present the second offer -Present the offer received first, and if declined, present the second offer -Present only the higher priced offer because it will result in the highest commission.

Present both offers, explaining the details of each contract to the seller. Unless a party has previously directed the licensee otherwise in writing, the licensee must present all offers and counteroffers in a timely manner.

Using income capitalization, which is the result of holding the capitalization rate constant and increasing the net operating income? -Present value increases -Present value decreases -Capitalization rate increases -Capitalization rate decreases

Present value increases. If the net income goes up and the capitalization rate remains constant, the present value will increase.

The Federal Reserve increases the reserve requirement for member banks. Which statement BEST describes the result of this action? -The supply of loan funds is increased. -The money supply is increased. -Pressure is on the interest rates to rise. -The market is more liquid.

Pressure is on interest rates to rise. Increase the reserve requirement takes money out of circulation, making the market less liquid and causing interest rates to rise.

The purpose of a U-shaped trap under a kitchen sink is to... -prevent food debris from traveling through the plumbing pipes. -catch a small object such as a wedding ring before it enters the soil stack. -equalize the air pressure in the drain system. -prevent combustible gases from entering the home.

Prevent combustible gases from entering the home. Traps are U-shaped pipes that stay full of water. The water forms a seal in the waterline and prevents odors and combustible gases from entering the home.

Which government office assigns Parcel ID numbers to land within a tax district?

Property appraiser. Each parcel is assigned a Parcel ID number by the county property appraiser's office.

Which information must be disclosed to a prospective buyer regarding a particular property? -Student-teacher class ratios for the public K-12 schools assigned to the neighborhood's district -Property is located in a flood zone area that requires flood insurance coverage -Neighborhood residents comprise several ethnic groups -Seller's wife was diagnosed with immune deficiency syndrome

Property is located in a flood zone area that requires flood insurance coverage. Licensees have a duty to disclose to buyers all known facts the materially affect the value of a residential property.

What type of license or other credential is require for an individual to engage in the sale, purchase, or lease of business for others? Business broker license, Member of national association of business brokers, Commercial business license, Real estate license

Real estate license.

Which party is the optionor in a option contract? -Prospective buyer -Property owner -Lender -Person receiving the option

Property owner. The optionor is the property owner that grants (gives) a prospective buyer the right to buy the property within a specified period of time. The person receiving the option to buy is the optionee (prospective buyer).

Which tax is ad valorem?

Property tax

A closing is set for July 15. How will the property taxes be entered on the closing statement?

Property taxes are paid in arrears - so seller has paid no taxes that month. Therefore, debited to seller and credited to buyer

Which statement is TRUE regarding the federal telemarketing law?

Real estate licensees may contact their former customers for up to 18 months following the closing of a transaction, even if the customer's name is on the national registry.

Which statement is TRUE regarding comparative market analyses (CMAs)?

Real estate licensees may not represent a CMA as an appraisal.

Which statement is FALSE regarding property taxes? -The county property appraiser assesses all real property within the county. -Property taxes for the previous year are due on November 1. -Ad valorem tax means according to value. -Property taxes become a lien on all real estate in Florida on January 1 each year.

Property taxes for the previous year are due on November 1. Property taxes are due November 1 for the current year. Property taxes are paid in arrears, meaning that although they are assessed on January 1, the bill is not due until November 1 of the same year.

For investment purposes, the value of an investment property should be based on the... -property's return and the appreciation it will yield. -cost to reproduce the property. -prestige and appreciation the investment will afford. -net income of the property capitalized by current market capitalization rates.

Property's return and the appreciation it will yield. For investment purposes, the value of an investment property should be based on the property's return and the appreciation it will yield.

Which tax is ad valorem?

Real estate property tax

Which protection is NOT given to homesteaded property? -$50,000 tax exemption for all qualifying homesteaded property -Protection of up to 640 acres outside the city limits of a community -Protection from foreclosure for nonpayment of a judgement lien against the property owner -Protection of the family in the event the homesteaded property is titled in the deceased spouse's name only

Protection of up to 640 acres outside the city limits of a community. The size of a homesteaded property is restricted to 160 acres outside a municipality (city) or up to 1/2 acre if the property is located within the city.

Which description BEST fits if one were to shade in sections 14, 15, 16, and 17 of a township? -Square -Diagonal line -Rectangle -Vertical line

Rectangle. the sections are contiguous and form a horizontal strip that is longer on two sides, forming a rectangle.

An insurance company imposes different insurance terms and conditions on homeowners located in certain neighborhoods. Which discriminatory practice is being committed by the insurance company? Steering, Blockbusting, Redlining, Blackballing

Redlining. Redlining is the practice of denying loans or insurance coverage that present different terms or conditions for homes in certain neighborhoods.

An electrical cable stamped with the words 8/2 with ground is MOST appropriate for wiring to a... -ceiling fan. -wall switch. -computer. -refrigerator.

Refrigerator. The size wire used in a circuit is based on how much current it will carry. Wires supplying clothes dryers or other large appliances such as refrigerators require an 8-gauge or 6-gauge wire.

Which requirement must be accomplished to register a real estate brokerage as a general partnership? -Execute a written agreement signed by all of the general partners -File a partnership agreement with the Florida Real Estate Commission -Register the partnership in the name of the partnership with at least one partner licensed as an active broker -Accomplish all of the requirements listen above

Register the partnership in the name of the partnership with at least one partner licensed as an active broker. General partnerships are created by written, oral, or implied contract. Partnerships registered as a real estate brokers obtain register in the name of the partnership. The partnership itself is registered, and at least one of its partners must licensed as an active broker.

The Office of Thrift Supervision:

Regulates saving association

The broker followed the directions issued in an escrow disbursement order that became the subject of a lawsuit. The consumer-plantiff obtained a judgement against the licensed real estate broker. It is determined that the consumer is eligible to seek reimbursement from the Recovery Fund. The Fund may NOT reimburse which expense? -Broker-defendant's attorney's fees -Broker-defendant's court costs -Plaintiff's attorney's fees -Punitive damages

Punitive damages. In all cases, punitive damages, treble damages, and interest may not be recovered from the Real Estate Recovery Fund.

The FREC's power to determine license law violations is an exercise of which type of power? Executive, Quasi-legislative, Quasi-judicial, Civil

Quasi-judicial. Quasi-judicial responsibilities include the power to grant or deny license applications, to determine license law violations, and to administer penalties.

Which type of deed is used to clear title defects? -Quitclaim -Special warranty -General warranty -Bargain and sale

Quitclaim. A quitclaim deed is useful for clearing existing or potential clouds on the title.

Which range is furthest away from the intersection of the principal meridian and base line? -R1E -R10W -R12E -R22W

R22W. The further away from he principal meridian, the larger the number of the range.

Which statement concerning REITs is FALSE? -Individual REITs typically specialize in a particular type of property. -REITs require investors to make considerable outlays of cash for property management services for real estate holdings. -REITs offer diversification and liquidity. -REITs are purchased through a stockbroker.

REITs require investors to make considerable outlays of cash for property management services for real estate holdings. REITs provide a way for individual investors to pool resources for investment. The properties are managed by skilled centralized management.

The Civil Rights Act of 1968 prohibits discrimination based on:

Race, color, religion, national origin, sex, familial status, handicap

The Fair Housing Act prohibits discrimination based on:

Race, color, religion, national origin, sex, familial status, handicap

Which partial description describes an area of land six miles wide that touches where the principal meridian and base line intersect? -Range 1 East -Range 2 West -Township 1 East -Township 1 West

Range 1 East. Townships are north or south of the intersecting point; ranges are east or west of the intersecting point. Range 1 East is the first vertical strip of land east of the principal meridian and touches the intersecting point.

In the Government Survey System, the six-mile vertical strip of land that extends from the north to the south of Florida, located immediately west of the Tallahassee Principal Meridian, is called

Range 1 West is located immediately west of the principal meridian and base line.

What is an adjustable-rate loan?

Rate fluctuates based on some objective economic indicator.

Which business opportunity is an example of a service industry? -Yacht manufacturer -Pharmaceutical company -Reading and sunglasses retailer -Peach orchard business

Reading and sunglasses retailer. Service industries consist of business opportunities with costumers who are primarily local residents.

Which law prohibits a mortgage lender form paying a real estate broker an unearned referral fee? -Florida Fair Lending Act -Florida Uniform Land Sales Practices Act -Truth-in-Lending Act -Real Estate Settlement Procedures Act

Real Estate Settlement Procedures Act. Under the Real Estate Settlement Procedures Act (RESPA), a mortgage lender may not pay a real estate broker a fee for referring a buyer to the lender. In Florida, real estate licensees must hold mortgage broker's licenses to legally be paid a fee for referring prospective borrowers to affiliated mortgage lenders.

Which statement does NOT describe the real estate market? -Real estate has become standardize thanks to technology. -Real estate is fixed in its location. -Land is permanent. -Federal monetary policy has an indirect influence on the real estate market.

Real estate has become standardized thanks to technology. Real estate is unique (heterogeneous) and not standardized.

When a real estate school changes business address and the school permit holder notifies the FREC within the required ten days, the instructor permits of the instructors who continue to teach for the school... -are temporarily ineffective -cease to be in force -remain in force -revert to involuntary inactive status

Remain in force. When a real estate school changed business address, the school permit folder must file with the FREC a notice of change of address. The notification fulfills the change of address notification requirement for instructors who remain employed by the school, and the instructor permits remain in force. (This is also true of sales associates and broker associates working for a broker who changes business address and notifies the FREC within ten days.)

A man owns a condominium for his lifetime. Upon his death, the property will convey to his daughter. Which term applies to the daughter? -Separate property -Remainder estate -Maital asset -Common law property

Remainder estate. The father is a life estate owner of the property for the period of his lifetime. When the father dies the property will go to the father's daughter. The daughter owns a remainder estate while the life estate exists.

A parcel of real estate has been left to the wife through her husband's will for the widow's use and enjoyment during her lifetime, with the provision the property goes to the widow's stepson at her death. The stepson's interest is that of

Remainderman - 3rd party fee simple ownership at end of life estate by wife.

Which property is NOT included in the definition of real property according to Chapter 475, F.S.? -Rental lot in a mobile home park -Interest in a business enterprise -Mineral rights -Time-share unit

Rental lot in a mobile home park. Chapter 475, F.S., defines real property to mean any interest or estate in land and any interest in business enterprises or business opportunities, including any assignment leasehold, subleasehold, or mineral right. However, real property does not include the renting of a mobile home lot or recreational vehicle lot in a mobile home park or travel park.

The cost to duplicate the business structure being appraised having the same use but differing physically somewhat is known as... -replacement cost. -benchmarking. -reproduction cost. -cost analysis.

Replacement cost. When replacement cost is used, the appraiser calculates the cost that would result in a building having the same use and capabilities as the one being appraised, even though the new building might differ physically.

Which type of cost is calculated using similar, but NOT identical, building materials, resulting in equal utility as compared with the subject property? -Reproduction -Replacement -Accounting -Insurance

Replacement. Replacement cost is the amount of money required to replace a structure having the same use and functional utility as the subject property, but using modern, available, or updated materials.

You are appraising a four-year-old, single-family residence. The total square footage of the livable area is 2,600. The garage is 485 square feet. According to figures obtained from a cost-estimating service, the base construction cost per square foot of livable area is $92, and $76 per square foot for the garage. Calculate the reproduction cost new of the structure.

Reproduction cost: 2,600 x 92 = 239,200 485 x 76 = 36,860 $276,060 total

Which disclosure notice must be signed by the buyer and the seller in certain nonresidential transactions? -Single agent -Consent to transition -No brokerage relationship -Request to use designated sales associate representation

Request to use designated sales associate representation. The buyer and seller must sign the disclosure notice stating that their assets meet the threshold and requesting that the broker use the designated sales associate form of representation.

Which item is NOT a deductible expense for an income-producing property? -Depreciation -Reserve for replacement -Hazard insurance -Mortgage interest

Reserve for replacement. Reserve for replacement is not a cash expense and therefore is not deductible.

What are the five major sales specialties?

Residential, Commercial, Industrial, Agricultural, Business

Which penalty is NOT an administrative penalty that may be imposed by the FREC? -Revocation -Probation -$5,000 fine for violation Chapter 455 -Restitution to the injured party

Restitution to the injured party. The FREC does not have the authority to order restitution to an injured party. If the acts of a licensee harm a consumer, the injured party may seek damages in a court of law.

Which document would contain information regarding the architectural design standards that must be used in a particular subdivision? Restrictive covenants, Building code book, Zoning code, Subdivision plat map

Restrictive covenants. Restrictive covenants affect how the land can be used and establish criteria for all parcels in that subdivision such as minimum square footage, type of construction, architectural design, and so forth.

Which term describes the discriminatory practice whereby one person induces another person to enter into a real estate transaction by suggesting that the first person may benefit financially from a potential change in the neighborhood with respect to race, sex, religion, color, handicap, or familial status, and that the change may result in the lowering of property values?

The answer is BLOCKBUSTING. Using the entry, or rumor of the entry, of a protected class into a neighborhood to persuade owners to sell is commonly known as blockbusting.

An applicant has been issued a broker's license. The broker licensee does not want to own her own real estate brokerage business. The licensee went to work selling real estate under another broker. She is BEST described as a

The answer is BROKER ASSOCIATE. A broker associate is an individual who holds a broker's license but who chooses to register and work in real estate under the direction of another broker.

A strip of land that separates one land use from another is referred to as a(n)

The answer is BUFFER ZONE. A buffer zone is a strip of land separating one land use from another.

A broker received a $5,000 deposit from a buyer on Tuesday at 1 P.M. The seller will NOT be available until Monday. The broker's normal banking day is Monday. The broker is required to deposit the $5,000 before the end of

The answer is BUSINESS ON FRIDAY. Brokers must deposit escrow funds no later than the end of the third business day following receipt of a deposit. The deposit was received on Tuesday, so the broker has Wednesday, Thursday and until the end of business on Friday

Which activity is performed by a secondary mortgage market participant?

The answer is BUY EXISTING MORTGAGES. The secondary mortgage market is an investor market that buys and sells existing mortgages.

When the Fed wants to ease a tight money supply, it may

The answer is BUY TREASURY SECURITIES. When an increase in economic activity seems needed, the Fed buys securities, thereby releasing money back into normal circulation and increasing loanable funds.

Which statement is TRUE regarding the Florida Energy Efficiency Rating Act?

The answer is BUYERS MUST BE GIVEN AN INFORMATION BROCHURE NOTIFYING THE BUYER OF THE RIGHT TO CONDUCT AN ENERGY-EFFICIENCY RATING ON THE STRUCTURE. The Florida Building Energy-Efficiency Rating Act requires that buyers, before signing the sale contract, receive an information brochure notifying the purchaser of the option for an energy-efficient rating on the building.

Which accounting term refers to the total amount of money generated from an investment after the expenses are paid?

The answer is CASH FLOW. Cash flow is the total amount of money generated from an investment after expenses have been paid.

What is the purpose of the property tax disclosure?

The answer is CAUTION BUYERS THAT THEY CANNOT RELY ON THE SELLER'S PROPERTY TAX HISTORY AS AN INDICATION OF BUYER'S FUTURE PROPERTY TAX BILL. The purpose of the disclosure summary is to caution buyers that they cannot rely on the amount of the seller's property taxes as an indication of the taxes they will be required to pay in the year following purchase of the property.

A first time homebuyer responds to a for sale-by-owner yard sign and walks through a home for sale. The buyer is not sure what recent prices homes in the neighborhood have been commanding or what is a reasonable offering price. This situation is BEST described as

The answer is CAVEAT EMPTOR. Caveat emptor is a Latin term meaning, "let the buyer beware."

Which item is BEST described as a fixture?

The answer is CEILING FAN. Curtains, a refrigerator, and a clothes washer are examples of personal property. A ceiling fan is attached to the real property, and is therefore an example of a fixture.

Which unit under the Department of Business and Professional Regulation issues real estate licenses?

The answer is CENTRAL INTAKE UNIT. The Central Intake Unit is part of the DBPR's Division of Service Operations. The Central Intake Unit processes all DBPR license applications and license fees. Florida statute gives the Florida Real Estate Commission the authority to issue licenses; however, in actual practice, the Central Intake Unit of the DBPR performs the day-to-day operations of processing license applications.

Which individual is NOT exempt from holding a Florida real estate license?

The answer is CERTIFIED PUBLIC ACCOUNT (CPA) WHO IS EMPLOYED BY A REAL ESTATE CORPORATION AND RECEIVES A SALARY PLUS BONUSES BASED ON REAL ESTATE TRANSACTIONS. Certified public accounts, when acting within the scope of their professional duties, are exempt from licensure. However, CPAs are not entitled to collect commissions or bonuses for performing services of real estate

The rules of the Florida Real Estate Commission are found in

The answer is CHAPTER 61J2. The administrative rules of the Florida Real Estate Commission are in Chapter 61J2 of the Florida Administrative Code.

Which property is exempt from property taxes?

The answer is CHURCH. Exempt properties include property belonging to churches and nonprofit organizations. Immune properties are city, county, state, and federal government buildings.

Electricity travels in a closed loop also referred to as a

The answer is CIRCUIT. Electricity travels in a circuit (or a closed loop).

Which statement does NOT describe a planned unit development?

The answer is CLUSTERING HOMES ON SMALLER LOTS RESULTS IN HIGHER OVERALL DENSITY OF DWELLING UNITS COMPARED WITH CONVENTIONAL DEVELOPMENT. Clustering results in the same overall density as in a conventional development. The other three descriptions apply to planned unit developments.

Which real estate investment characteristic listed below is a disadvantage of investing in real estate? -Equity buildup -Leverage -Risk -Property appreciation

Risk. Tenant turnover, increasing property taxes, and increased cost associated with operations are a few examples of the risk associated with investing in real estate.

A broker places an earnest money deposit into the broker's business operating account. The broker can be disciplined for which violation?

The answer is COMMINGLING. To mix the money or other personal property of a buyer or seller with a broker's own money or property, or to combine escrow money with personal or business funds, is commingling.

Which statement BEST describes a local planning commission?

The answer is COMMISSION MEMBERS ARE REPRESENTATIVE OF THE COMMUNITY'S RESIDENTS. Planning commissions are most effective when composed of members who represent all walks of life.

A marketing tool used by real estate licensees in the process of soliciting for listings that is intended to help sellers determine an asking price is known as a(n)

The answer is COMPARATIVE MARKET ANALYSIS. Real estate licensees may help potential sellers determine an asking price by preparing a comparative market analysis (CMA). A CMA is a marketing tool and may not be referred to or be represented as an appraisal.

Which method of estimating building costs relies on the use of cost-calculation publications?

The answer is COMPARATIVE SQUARE-FOOT. In this method, the cost on a square-foot basis is compared for a similar structure, sometimes using cost-calculation publications.

A buyer has breached a real estate sale contract. The seller wants to recover damages in excess of the earnest money deposit. Which remedy for breach should the seller use?

The answer is COMPENSATORY DAMAGES. The party bringing suit seeks an amount of money equal to the extent of loss suffered (compensatory damages).

What is required of all nonresident license applicants?

The answer is COMPLETE POST-LICENSING AND CONTINUING EDUCATION AND COMPLY WITH F.S. 475 AND FREC RULES. If a nonresident applicant or licensee wishes to become licensed in Florida, the applicant must comply with all education requirements, F.S. 475 requirements, and FREC rules.

Which task must a sales associate complete prior to the expiration of the initial sales associate license?

The answer is COMPLETE THE 45-HOUR POST-LICENSE EDUCATION COURSE. Sales associates must complete 45 hours of post-license education before the first renewal of their initial license.

The subsection in Florida's Growth Management Act that requires that sewers and drinking water be available before new development is allowed is referred to as the

The answer is CONCURRENCY PROVISION. The concurrency provision in Florida's Growth Management Act mandates that the infrastructure needed to support additional population exists before new development begins.

A city wants to acquire land for a fair price for the purpose of building a new interstate ramp. The land is acquired through which legal process?

The answer is CONDEMNATION. Eminent domain gives government the right to take land from an owner through a legal process known as condemnation, as long as the taking is for a public purpose.

For which feature does an appraiser make an adjustment if it is determined that there was a business relationship between the buyer and seller that may have influenced the sale price?

The answer is CONDITIONS OF SALE. Appraisers research the conditions of sale to determine if the buyer or seller was under abnormal pressure to buy or sell or if there was a special relationship between the parties to the transaction.

Which phrase may legally be included in an advertisement to sell real estate?

The answer is CONDOMINIUM COMPLEX FEATURES NEW CHILDREN'S PLAYGROUND. It is a violation of Fair Housing Laws to steer people of a particular ethnic or religious group into or away from a neighborhood. It is also a violation of Fair Housing Laws to restrict families with children from living in a community unless that neighborhood qualifies under federal laws as a retirement community.

The ultimate decision makers in the marketplace are

The answer is CONSUMERS. The consumer is the individual who exercises freedom of choice in the marketplace and, therefore, is the real decision maker.

A sales associate fails to turn over to the broker rental income paid by a tenant. The sales associate spends the money for personal use. Which legal term applies to this situation?

The answer is CONVERSION. Conversion is the unauthorized control or use of another's personal property.

Which business entity may NOT register as a real estate brokerage entity?

The answer is COOPERATIVE ASSOCIATION. A cooperative association is allowed to conduct commercial business and to convey, sell, or buy its own property, but it cannot be registered as a real estate broker.

Thoroughfare studies are normally a

The answer is COOPERATIVE PROJECT. Thoroughfare studies are normally a joint venture involving city, county, and state transportation departments and regional planning commissions.

A proprietary lease is associated with a

The answer is COOPERATIVE. The purchase of stock in a cooperative entitles the purchaser to a proprietary lease and the right to occupy a unit.

Which entity may NOT be registered as a real estate brokerage?

The answer is CORPORATION SOLE. A corporation sole is an artificial or fictitious person formed by an ecclesiastical body and may not register as a broker.

The barometer of the real estate market is considered to be the

The answer is COST AND AVAILABILITY OF CREDIT. The barometer of the real estate market is considered to be the cost and availability of credit.

Which criteria is NOT used to determine whether something is real or personal property?

The answer is COST OF THE ITEM. Courts generally use four tests to decide if an item is a fixture (i.e., real property, not personal property). The four tests are: (1) intent of the parties; (2) relationship between the parties; (3) method of annexation; and (4) adaptation of the article.

You have been hired to appraise the local public library building. The approach that is likely to be the MOST relevant is the

The answer is COST-DEPRECIATION APPROACH. The cost-depreciation approach is particularly applicable for appraising special purpose properties

A seller receives an offer from a buyer to purchase a property for $300,000. The seller changes the price to $320,000 and submits it to the buyer. Which term describes the price change?

The answer is COUNTEROFFER. When the offeree (person receiving the offer) alters the terms of the original offer, it creates a counteroffer.

How are unpaid property taxes entered on the closing statement?

The answer is CREDIT TO BUYER AND DEBIT TO SELLER. Unpaid property taxes will show as a debit to the seller for the number of days in the current year the seller occupied the property, and an identical amount will show as a credit to the buyer.

How is the buyer's binder deposit entered on the closing statement?

The answer is CREDIT TO BUYER ONLY. The binder deposit (earnest money or good faith deposit) is entered as a credit to the buyer (there is no entry on the seller's side).

How is the purchase price entered on the closing statement?

The answer is CREDIT TO SELLER AND DEBIT TO BUYER. The total purchase price is entered as a credit to the seller and as a debit to the buyer.

Which type of lot allows extra space in the backyard and is considered more "quiet."

The answer is CUL-DE-SAC. Lots located on a cul-de-sac are desirable because they are usually more spacious, providing ample room for backyard features.

A firm's working capital is customarily defined as the difference between the firm's total

The answer is CURRENT ASSETS AND TOTAL CURRENT LIABILITIES. Capital is the net worth of a business. It is the amount by which the assets exceed the liabilities.

How are unpaid property taxes entered on the closing statement? -Debit to seller only -Debit to buyer only -Credit to seller and debit to buyer -Credit to buyer and debit to seller

The answer is Credit to buyer and debit to seller. Unpaid property taxes will show as a debit to the seller for the number of days in the current year the seller occupied the property, and as identical amount will show as a credit to the buyer.

How is the purchase price entered on the closing statement? -Credit to seller only -Credit to buyer only -Credit to seller and debit to buyer -Credit to buyer and debit to seller

The answer is Credit to seller and debit to buyer. The total purchase price is entered as a credit to the seller and a debit to the buyer.

A property closes on April 8, with the day of closing charged to the seller. The annual property taxes are $1,486. Which entry will appear on the closing statement for the property taxes?

The answer is DEBIT TO SELLER AND CREDIT TO BUYER IN THE AMOUNT OF $398.98. Taxes are paid in arrears. Therefore, calculate number of days seller is responsible for paying: January (31) + February (28) + March (31) + April (8) = 98 days. $1,486 ÷ 365 days × 98 days = $398.98 seller owes, so debit seller and credit buyer.

The brokerage relationship disclosure requirement in Chapter 475 apply to which transaction? -Sale of a 150-unit condominium complex -Sale of a coffee shop in a residential neighborhood -Lease of a single-family home -Sale of three vacant lots zoned for single-family use

Sale of three vacant lots zoned for single-family use. Brokerage relationship disclosure requirements apply to residential transactions. A residential sale is defined as the sale of improved residential property of four or fewer units, the sale of unimproved property intended for use as four or fewer units, and the sale of agricultural property of ten or fewer acres.

What is another term for a release of mortgage, and within how many days must the lender execute the release? -Due-on-sale within 30 days -Hypothecation within 45 days -Right to reinstate within 45 days -Satisfaction of mortgage within 60 days

Satisfaction of mortgage within 60 days. A satisfaction of mortgage (or a release of mortgage) must be sent within 60 days.

Which amendment to the Florida constitution limits how much the assessed value of homesteaded property can increase in a given year?

Save our Home (SOH) regulates that the assessed value of a property can only increase 3% annually or the % change of the CPI for the preceding year; whichever is LESS

The Director of the Division of Real Estate is appointed by the... -Governor -Florida Real Estate Commission Chairperson -Secretary of the Department of Business and Professional Regulation -Florida Senate

Secretary of the Department of Business and Professional Regulation. The Director of the DRE is appointed by the Secretary of the DBPR, subject to approval by majority vote of the FREC.

The section located due south of section 33 is in the:

Section 4

A seller files a complaint against a broker. The broker hires an attorney to represent him in discussions with the DBPR. Which person is the complainant? -The broker -The broker's attorney -Seller -DBPR's representative

Seller. The complainant is the person who files the complaint.

Which element is NOT an essential element of a deed? -Legal description -Voluntary delivery and acceptance -Granting clause -Signed by a competent grantee

Signed by a competent grantee. The deed must be signed by a competent grantor (not grantee).

A husband and wife have title to a property in both names. Which action is required to convey the title to the property? -Signed by the husband and wife -Signed by the grantee -Notarized -Recorded

Signed by the husband and wife. the deed must be signed by the grantor. In this case the grantor (person conveying title) is the husband and wife. Before a legal document can be recorded, it must be notarized. However, in Florida, deeds are not required to be recorded.

A comparable property has one more bathroom than does the subject property. The appraiser estimates the value of an extra bath at $30,000. How should the adjustment be entered on the reconciliation?

The answer is DECREASE THE VALUE OF THE COMPARABLE BY $30,000. All adjustments must be made to each comparable property, not to the subject property. If a comparable is superior on a given feature, a downward adjustment is made to the comparable property (subtract the value of the difference).

A developer transfers to the city privately owned streets in a subdivision with the agreement that the city will maintain the streets in the future. This process is known as

The answer is DEDICATION. Dedication is the gift of land by an owner, in this case a developer, to a government body for a public use.

Which term applies to a nonjudicial procedure whereby a borrower who is in default on the mortgage loan transfers title of a property to the lender?

The answer is DEED IN LIEU OF FORECLOSURE. The defaulting borrower gives title (the deed) to the lender to avoid judicial foreclosure.

Which instrument can be used by a property owner to control how a particular parcel of real property may be utilized by future property owners?

The answer is DEED RESTRICTIONS. Deed restrictions are placed by an owner who has created a restriction on future owners of the parcel of real estate.

Which action can result in the foreclosure of a homesteaded property?

The answer is DELINQUENT PROPERTY TAXES ON THE HOMESTEADED PROPERTY. Homesteaded property is protected from forced sale for debts owing to personal loans, credit card debt, and so forth. The protection does not prevent foreclosure for nonpayment of property taxes, special assessments, mortgages, vendors' liens, or construction liens secured with the homesteaded property.

Residential zoning is designed to regulate

The answer is DENSITY. Residential zoning regulates density (number of homes per acre).

You are interested in adding additional roof insulation to your home to reduce your monthly electrical bill. Which government agency establishes minimum recommended R-values specific to your local area?

The answer is DEPARTMENT OF ENERGY. The U.S. Department of Energy (DOE) has established minimum recommended R-values specific to ZIP code areas.

From which source can a broker obtain a copy of the equal housing opportunity poster for a new real estate office?

The answer is DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT. The equal housing opportunity poster is available from the Department of Housing and Urban Development.

Which group insures federally chartered savings associations?

The answer is DEPOSIT INSURANCE FUND. The Deposit Insurance Fund insures both federally chartered banks and savings associations.

Local businesses within a community such as a bird feed store or a convenience store are referred to as which type of property?

The answer is DESTINATION. Destination properties include service industries that support the needs of a local community, such as local repair shops, barbershops, local real estate agencies, and financial institutions.

Which interest rate is charged member banks for borrowing money from the Federal Reserve?

The answer is DISCOUNT. The discount rate is the interest rate charged member banks for borrowing from the Fed.

The Florida Real Estate Commission must notify which agency when it takes disciplinary action against any of the agency's licensees?

The answer is DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES, AND MOBILE HOMES. The FREC must inform the Division of Florida Condominiums, Timeshares, and Mobile Homes when any disciplinary action is taken by the FREC against any of its licensees

Which encumbrance is NOT a lien?

The answer is EASEMENT. Mortgage liens and construction liens are specific liens. A judgment is a general lien. Easements encumber the property but do not result in liens against the property.

Which type of age is MOST relevant in the cost-depreciation approach?

The answer is EFFECTIVE. Effective age is the age indicated by a structure's condition and utility.

Which property is defined as residential real estate under Chapter 475, Florida statutes?

The answer is EIGHT ACRES OF AGRICULTURAL PROPERTY. Residential real estate is defined in Chapter 475, F.S., as four or fewer residential units, or agricultural property of ten or fewer acres

What is the maximum number of consecutive years a Commissioner may serve on the Florida Real Estate Commission?

The answer is EIGHT. A Commissioner may not serve more than two consecutive four year terms.

In municipalities with planning commissions, the final authority in planning matters is the

The answer is ELECTED CITY GOVERNMENT OFFICIALS. The planning commission is responsible for planning, but the elected government must make the final decisions based on recommendations.

Which restriction is always a public restriction?

The answer is EMINENT DOMAIN. Restrictive covenants, easements, and leases are private restrictions; police power, eminent domain, and taxation are government restrictions.

The documentary stamp tax on deeds is based on the

The answer is ENTIRE SALE PRICE OF THE PROPERTY. Doc stamps on deeds are charged on the entire purchase price

Which law protects applicants from discrimination based on whether they receive income from public assistance programs?

The answer is EQUAL CREDIT OPPORTUNITY ACT. The Equal Credit Opportunity Act ensures that financial institutions and firms engaged in extending credit will make credit available without discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance programs.

A provision in all mortgages that allows the delinquent mortgagor to avoid foreclosure by paying all of the back mortgage payments, late penalties, and costs of collection up until the time of foreclosure sale is the

The answer is EQUITY OF REDEMPTION. Equity of redemption is the right of a mortgagor, before a foreclosure sale, to reclaim forfeited property by paying the entire indebtedness.

The gradual loss of land associated with moving water and/or wind is referred to as

The answer is EROSION. Erosion is the gradual loss of land due to natural forces, such as from moving water and/or wind.

A single person dies without a will. After a period of time, the state of Florida obtained title to the property of the deceased person. What power entitled the state government to acquire the deceased person's property?

The answer is ESCHEAT. Escheat provides for a government, normally a state government, to take the property of an owner who dies intestate and without any known heirs entitled to receive the property.

Title to real property does NOT convey in which type of estate?

The answer is ESTATE FOR YEARS. An estate for years is a leasehold estate that is created by a written lease agreement. An estate for years establishes an interest in real property for the tenant (right to use, possession, and exclusion) but does not convey actual title (or ownership).

Tax advantages of homeownership do NOT include

The answer is EXCLUSION OF GAIN FROM THE SALE OF A PRINCIPAL RESIDENCE UP TO $500,000 FOR A SINGLE ADULT. The IRS allows an exclusion of up to $250,000 of gain ($500,000 for married couples filing a joint return) realized on the sale of a principal residence.

What type of listing is given to a broker in which commission is promised to the listing broker, provided the owner does NOT find the buyer?

The answer is EXCLUSIVE-AGENCY LISTING. A seller gives an exclusive-agency listing to one broker who handles the transaction. The seller reserves the right to sell the property without paying a commission.

When all parties to a contract have completely performed all obligations and promises contained in the contract, what type of contract is it?

The answer is EXECUTED. When all parties to a contract have completely performed all the obligations and promises contained in the contract, it is considered an executed contract.

The Commission's authority to regulate and enforce the license law is which type of power?

The answer is EXECUTIVE. The executive powers to regulate and enforce the license law are delegated to the Commission by the Florida legislature.

Which brokerage relationship duty applies only to a transaction broker relationship?

The answer is EXERCISE LIMITED CONFIDENTIALITY. Full disclosure is a single agent duty. Dealing honestly and fairly and accounting for all funds apply to all three disclosure relationships. Exercising limited confidentiality is a brokerage relationship duty unique to transaction broker relationships.

A broker who fails to pay an earnest money deposit at the title closing in accordance with the contract for sale and purchase may be charged with which offense?

The answer is FAILURE TO ACCOUNT FOR AND DELIVER. Failure to account for and deliver is the act of failing to pay money to a person entitled to receive it.

Which entity is NOT part of the primary mortgage market?

The answer is FEDERAL NATIONAL MORTGAGE ASSOCIATION. The Federal National Mortgage Association (Fannie Mae) is a secondary mortgage market participant.

Black gave Blue an estate measured by Blue's lifetime. When Blue died, the estate reverted back to Black. What type of estate did Black receive after Blue's death?

The answer is FEE SIMPLE ESTATE. Black gave a life estate to Blue. Because the property reverted back to Black after Blue's death (at the end of the life estate), Black held a reversion estate. Once Blue died, the property reverted back to Black, who receives a fee simple estate.

If a request for a property tax adjustment is denied, what is the property owner's next step?

The answer is FILE A PETITION WITH THE VALUE ADJUSTMENT BOARD. If the property owner's request for an adjustment is rejected, the owner may file an appeal (petition) with the Value Adjustment Board.

If a seller refuses to pay a broker sales commission owed after the residential property is sold, the broker may

The answer is FILE A SUIT IN THE COURTS FOR THE COMMISSION. When a buyer or seller refuses to pay a broker's commission after it is earned, the broker may take action to collect by filing a suit against the party for the amount due

Which category of risk is associated with the ability of a property to pay operating expenses from funds provided from operations, borrowing, and equity sources?

The answer is FINANCIAL. This category of risk is associated with the ability of an investment property to pay operating expenses from funds provided from operations, borrowing, and equity sources.

Advertising rental property information that is materially inaccurate is which type of violation?

The answer is FIRST DEGREE MISDEMEANOR. Advertising rental property information or lists that are not current or are materially inaccurate is a first degree misdemeanor.

An economic characteristic associated with people's preference for certain real estate locations is known as... -macroeconomics. -supply and demand. -situs. -destination property.

Situs. The economic characteristic, situs (people's preference for certain locations), indicated the influences on value created by location.

For what period of time must a broker maintain business records, including escrow account records, and make them available to audit by the DBPR?

The answer is FIVE YEARS REGARDLESS OF WHETHER TRUST (ESCROW) FUNDS WERE COLLECTED. Brokers must maintain records of real estate transactions for five years regardless of whether escrow funds are pledged.

Which information in the advertisement presented below is considered to be a triggering term? New waterfront town homes are nearing completion. These gorgeous homes would make a perfect second home or vacation property. Financing is available at competitive mortgage rates. Fixed rate mortgages are available with as little as 10 percent down. Jumbo mortgages are also available. Sale prices begin in the low $700,000s.

The answer is FIXED RATE MORTGAGES ARE AVAILABLE WITH AS LITTLE AS 10 PERCENT DOWN. Triggering terms include the amount or percentage of any down payment.

You are walking through a seller's contemporary-design home. There are windows set high into a loft area, that are NOT designed to be opened. They function simply to bring light into the loft. What window type does this describe?

The answer is FIXED. Fixed windows are also called picture windows. They are fixed in their location and cannot be opened.

If all legislated requirements have previously been met, an active broker in Florida may hold an active license in

The answer is FLORIDA AND ANY OTHER STATE OR FOREIGN COUNTRY WHOSE LICENSING LAWS HAVE NOT BEEN VIOLATED. A broker may hold licenses in several states as long as the laws of each state are not violated

Which Florida law prohibits a lender from refinancing a loan to the same borrower within the first 18 months of making a loan, if doing so does NOT reasonably benefit the borrower?

The answer is FLORIDA FAIR LENDING ACT. The Florida Fair Lending Act prohibits a lender or its affiliate from refinancing a loan to the same borrower within the first 18 months, when doing so does not reasonably benefit the borrower.

The sales associate that worked with the buyer in the transaction sets up an appointment with the buyers to visit them six weeks after the sale. The sales associate routinely makes a visit after the title closing to thank the buyers for choosing her real estate company and to extend an offer to help with the buyers' future real estate needs. What type of service is the sales associate providing?

The answer is FOLLOW-UP. Follow-up is what a sales associate does for buyers and sellers after the sale and can result in future referrals and word-of-mouth advertising

What is the Statute of Limitations (in years) for parol contracts?

The answer is FOUR. The Statute of Limitations for parol (oral) contracts is four years.

A licensee makes a statement that is material to the transaction as if it were a fact when the licensee does NOT know if the statement is true or false, and the buyer relies on the statement. As a result of the statement made by the licensee, the buyer suffers damages. This situation constitutes

The answer is FRAUD. All of the elements of fraud are presented here.

A transaction broker has the duty of:

Skill, Care and Diligence

A transaction broker has the duty of:

Skill, care and diligence

Actual notice is:

Something you have learned b reading, seeing or hearing

Actual notice is:

Something you have learned by reading, seeing or hearing

A line pointed in the direction opposite North 20 degrees East is... -North 20 degrees West -South 40 degrees East -West 20 degrees South -South 20 degrees West

South 20 degrees west. The line opposite North 20 degrees East is South 20 degrees West. The number of degrees does not change, only the compass directions.

Section 33 is in the:

South part of a township

A township has 36 parcels called "sections." Section 31 would be located in which corner?

Southwest

Local government can recover the cost of widening a street in an existing neighborhood by charging the neighborhood property owners a

Special Assessments are one-time taxes levied on properties to help pay for some public improvement that benefits property - typically levied on a front foot basis or per hookup basis for utility and sewer improvements.

What is permission to build or use in apparent conflict with existing zoning ordinance?

Special exception

In which type of deed does the grantor warrant to defend the title solely against acts by the grantor or the grantor's representative? -Quitclaim -Bargain and sale -Special warranty -General warranty

Special warranty. In a special warranty deed, the grantor does not assume responsibility for the title in any way except against the acs by the grantor or the grantor's representative.

Which remedy for breach of contract requests the courts to force the other party to proceed as the contract states? -Rescission on breach of contract -Compensatory damages -Specific performance -Liquidated damages

Specific performance. If awards of money damages do not afford sufficient relief, the wronged party may sue for specific performance to have the courts force the other party to perform as the contract specifically states.

A case is heard before an administrative law judge in a formal hearing. In such cases, who renders the final order?

The answer is FREC (WITH MEMBERS WHO SERVED ON THE PROBABLE-CAUSE PANEL EXCUSED). The FREC (with the members who served on the probable-cause panel excused) issues the final order. In matters heard by an administrative law judge in a formal hearing, the FREC reviews and considers the administrative law judge's findings and recommended order before issuing its final order.

A broker's license was involuntary inactive for two years and one month. To operate again as an active licensee, the broker must complete

The answer is FREC COURSE I AND PASS THE SALES ASSOCIATE'S LICENSING EXAM. The broker's license became null and void after two years. To operate again as a licensee, she must start over by completing the sales associate's prelicense course and then pass the state-licensing exam

Attorneys who are active members in good standing with The Florida Bar are exempt from which education requirement?

The answer is FREC COURSE I FOR SALES ASSOCIATES. Attorneys who are active members of The Florida Bar are exempt from FREC Course I. Active members in good standing with The Florida Bar are also exempt from the continuing education requirements for real estate licensees. Attorneys are not exempt from the state license examinations for sales associates and brokers, the post-license requirements, or from FREC Course II.

A transaction broker does NOT have which duty?

The answer is FULL FIDUCIARY DUTIES TO BOTH THE BUYER AND THE SELLER. A transaction broker has all of the duties listed except for full fiduciary duties: Duty of accounting for all funds, Duty to disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer, Duty of using skill, care, and diligence in the transaction

Which type of depreciation is associated with inefficient architectural design?

The answer is FUNCTIONAL OBSOLESCENCE. Functional obsolescence is depreciation associated with operational inadequacies, poor design, or changing tastes and preferences.

Which promise is unique to a general warranty deed?

The answer is FURTHER ASSURANCE. A general warranty deed contains three unique promises: (1) quiet enjoyment; (2) further assurance; and (3) warranty forever.

Which type of deed provides a new owner with the BEST protections?

The answer is GENERAL WARRANTY. The general warranty deed contains all the covenants and warranties available to give the grantee every possible future guarantee to title protection.

In general business dealings, which type of agent is authorized by the principal to perform acts related to a certain business or to employment of a particular nature?

The answer is GENERAL. A general agent is authorized by the principal to perform only acts related to a business or to employment of a particular nature.

Which item below is NOT a requirement under RESPA?

The answer is GIVE MORTGAGE APPLICANT A LIST OF COMPETING LENDERS SO THAT THE CONSUMER CAN COMPARISON SHOP FOR THE BEST RATE. The statement is false. RESPA does not require the lender to give mortgage applicants a list of competing lenders

The value of an established business property, compared with the value of just the physical assets of a business that is NOT yet established, is referred to as

The answer is GOING CONCERN VALUE. Going concern value is the value of an established business property compared with the value of just the physical assets of a business that is not yet established.

Which type of value is associated with an income-producing property that has been operating successfully for some time?

The answer is GOING CONCERN. Going concern value is the value of an income-producing property characterized by a significant operating history.

The purchase price of a business minus the value of the tangible assets of that business equals the intangible assets of the business, referred to as

The answer is GOODWILL. Goodwill is an intangible asset (value) of a business.

What term is used to describe fractional pieces of land less than a full quarter section located along the banks of lakes and streams?

The answer is GOVERNMENT LOT. A government lot is composed of fractional pieces of land less than a full quarter section located along the banks of lakes and streams.

Which method of legal description was NOT used in the original 13 colonies?

The answer is GOVERNMENT SURVEY METHOD. The government survey method was commissioned in 30 states other than the original 13 colonies and few other states.

Members of the Florida Real Estate Commission are appointed by the

The answer is GOVERNOR. FREC members are appointed by the Governor, subject to confirmation by the Florida Senate.

Which clause in a deed contains the necessary words to convey title?

The answer is GRANTING. The granting clause contains the necessary words used to convey the property.

Which mortgage plan is BEST suited to people who expect significant increases in income within the next few years?

The answer is GROWING-EQUITY. A growing-equity mortgage rapidly increases the equity in a property by increasing the monthly payments by a certain percentage each year and applying the increases to the principal.

The government survey method of legal description

The answer is HAS AS A BASIS A PRINCIPAL MERIDIAN AND A BASE LINE. The federal government selected certain north-south longitudes as principal meridians and certain east-west latitudes as base lines

A man successfully negotiated (and was paid for) the sale of a Federal Communications Commission license for a television station. He is NOT a licensed real estate broker or sales associate. The man

The answer is HAS NOT VIOLATED F.S. 475. Individuals negotiating the sale, purchase, or lease of radio, television, or cable enterprises are exempt from real estate licensure, provided the sale or purchase does not involve the sale or lease of real property

A single agent broker received an offer on a listed property at the seller's price and terms. Before informing the seller, the broker received a higher offer. The single agent submitted only the first offer, and the seller-principal accepted the offer. The broker

The answer is HAS VIOLATED THE FIDUCIARY DUTY TO THE PRINCIPAL. The licensee has a fiduciary duty to present all offers to the principal

Insulation is rated by its ability to resist

The answer is HEAT FLOW. Insulation is rated (R-value) by its ability to resist heat flow.

A type of roof style that slopes from the ridge to four opposite sides and allows continuous eave venting around the entire house perimeter is the

The answer is HIP. A hip roof peaks at the center ridge but extends downward on four opposite sites.

Consumers sometimes use which type of loan to purchase big ticket items because of the deductible interest feature?

The answer is HOME EQUITY LOAN. The interest on most home equity loans is tax deductible.

One person or a group of persons occupying a separate housing space is technically defined as a

The answer is HOUSEHOLD. A household, as defined by the Bureau the Census, is any person or group of persons occupying a separate housing space.

Which document must be given to the borrower at LEAST one day before the title closing if requested by the borrower?

The answer is HUD-1 SETTLEMENT STATEMENT. Borrowers may request a copy of the HUD-1 statement one day before the actual settlement.

In which way does state government influence the real estate business?

The answer is IDENTIFICATION OF COASTAL REGIONS. Property taxation, occupational licensing, and zoning are local government influences.

Brokers should NOT accept the task of appraising a parcel

The answer is IF THEIR FEES ARE CONTINGENT ON THE APPRAISED VALUE. To accept an appraisal assignment contingent on the appraised value is a violation of the USPAP.

Which power is NOT given to the Florida Real Estate Commission?

The answer is IMPOSING JAIL SENTENCES. Jail time must be imposed by a criminal court. The FREC is empowered to make determinations of license law violations and impose administrative penalties.

Intangible assets of a business do NOT include

The answer is IMPROVEMENTS. An intangible asset is something of value lacking physical substance; existing only in connection with something else such as the goodwill of a business.

Utility easements are generally which type of easement?

The answer is IN GROSS. Utility easements are easements in gross. This type of easement benefits an individual or a business entity and is not related to a specific adjacent parcel.

The MOST important cause of population increase in Florida has been the

The answer is IN-MIGRATION OF NEW RESIDENTS. The most important cause of population increase in Florida as a whole has been in-migration—new residents moving to the area from other places.

Which financial report indicates the results of business operations over a specific period of time?

The answer is INCOME STATEMENT. The income statement is a concise summary of all income and expenses of a business for a stated period of time.

Which violation is a third-degree felony?

The answer is INDIVIDUAL PERFORMS REAL ESTATE SERVICES FOR COMPENSATION WITHOUT A REAL ESTATE LICENSE. It is a third-degree felony for an individual to perform real estate services for compensation without a real estate license.

Which statement is TRUE regarding the monthly payments on a 30-year, fully amortized loan?

The answer is INITIALLY, INTEREST IS THE LARGER PORTION OF THE PAYMENT. Payments during the first few years are used almost entirely to pay interest

The Statute of Frauds applies to

The answer is INSTRUMENTS OF CONVEYANCE OF REAL PROPERTY. The Statute of Frauds requires that certain real estate instruments and contracts affecting title to real property be in writing to be enforceable.

Commercial zoning is designed to regulate

The answer is INTENSITY. Commercial zoning regulates intensity of use.

The process of consolidating many small savings accounts belonging to individual depositors and investing the funds into larger, diversified projects is known as

The answer is INTERMEDIATION. Intermediation is a process practiced by financial institutions that serve as intermediaries between depositors and borrowers.

Population background studies do NOT involve an

The answer is INVENTORY OF PUBLIC AND PRIVATE LAND USES. Existing land-use studies are concerned with taking an inventory of all public and private land uses.

Which type of value is personal to a particular investor based on the investor's investment objectives, risk tolerance, and so forth?

The answer is INVESTMENT. Investment value is the price an investor would pay, given the investor's own financing requirements and income tax situation.

A land-use study

The answer is INVOLVES ALL OF THESE. A land-use study: (1) shows where future land uses should be; (2) involves plotting each parcel on a land-use map; and (3) requires an inventory of public and private land uses.

Depreciation (cost recovery)

The answer is IS AN ALLOWABLE DEDUCTION THAT REQUIRES NO CURRENT OUTLAY OF CASH. Depreciation is a key deduction because it reduces taxable income without involving a cash outlay.

A real estate license may be revoked or canceled without prejudice for which action?

The answer is ISSUANCE OF A LICENSE BY MISTAKE BY THE COMMISSION. A license may be revoked without prejudice if it was issued through the mistake or inadvertence of the Commission.

In Florida real property is assessed on January 1 of each year, and property taxes become a lien on the property on

The answer is JANUARY 1, THE SAME YEAR. Property taxes become a lien on all real estate on January 1 each year

Which court case made clear that material defects that affect the value of residential property must be disclosed to prospective buyers?

The answer is JOHNSON V. DAVIS. Johnson v. Davis is a legal case that took place in Florida that set legal precedence concerning material defects.

Which estate includes the right of survivorship?

The answer is JOINT TENANCY. Right of survivorship means that when one co-owner dies, the deceased co-owner's share goes to the surviving co-owners such as in a joint tenancy.

Which type of lot is bounded by five or six other lots?

The answer is KEY. Key lots are long skinny lots that are often bounded by five or six other lots.

Which term refers to the belief that the government should NOT interfere in private business affairs?

The answer is LAISSEZ-FAIRE. Laissez-faire is a philosophy of noninterference by the government in private business affairs.

At closing the seller retains legal title to the property. The buyer receives equitable title and a promise that the buyer will receive title to the property at a later date. What type of instrument has been executed?

The answer is LAND CONTRACT. A land contract (or contract for deed) is a special arrangement that can be used when the buyer has little down payment. Title to the real property remains with the seller. The buyer receives equitable (legal) interest in the property.

Which characteristic does NOT describe the real estate market?

The answer is LAND IS HOMOGENEOUS. Real estate is heterogeneous; no two tracts of land are identical.

Under which circumstance is a landlord relieved from the requirement to place security deposits into a special rental account?

The answer is LANDLORD POSTS A SURETY BOND WITH THE CLERK OF THE CIRCUIT COURT. If the landlord posts a surety bond with the clerk of the circuit court in the county where the rental property is located, the landlord is not obligated to place the funds into a special account. The bond must be for the total amount of the security deposits and advance rents or $50,000, whichever is less. When posting a surety bond, the landlord must pay the tenant 5 percent per year simple interest.

Which individual must hold a Florida real estate license?

The answer is LAWYER WHO RECEIVES A SHARE OF THE COMMISSION FOR EACH TRANSACTION RESULTING FROM THE REFERRAL OF A CLIENT TO A LOCAL BROKERAGE OFFICE. A lawyer is exempt from a real estate license if performing work within the scope of an attorney-client relationship. However, to legally be paid a commission or other compensation for real estate services, the lawyer must also hold a real estate license.

Which type of notice is accomplished by recording in the public records?

The answer is LEGAL. Constructive notice (also called legal notice) is accomplished by recording the information in the public records. Actual notice and constructive notice have equal legal priority.

When a consumer files a complaint against a real estate licensee that contains facts indicating that a violation of FREC rules has occurred, the complaint is said to be

The answer is LEGALLY SUFFICIENT. A complaint is legally sufficient if it contains facts indicating that a violation of Florida statute, or DBPR or FREC rule, has occurred.

What is the effect of the due-on-sale clause?

The answer is LENDER MAY REQUIRE REPAYMENT IN FULL IF THE PROPERTY IS SOLD OR TRANSFERRED WITHOUT THE LENDER'S CONSENT. A due-on-sale clause allows the mortgagee to call due the outstanding loan balance, plus accrued interest, if the property is sold or transferred without the lender's prior written consent.

The financial term applied to the use of borrowed funds to finance the purchase of an office building is

The answer is LEVERAGE. Leverage is the use of borrowed funds to finance the purchase of an asset.

A real estate broker who is a single agent of a buyer or a seller does NOT have which duty to the principal?

The answer is LIMITED CONFIDENTIALITY, UNLESS WAIVED IN WRITING BY A PARTY. Limited confidentiality is a duty associated with a transaction broker relationship

A sales associate may hold which position?

The answer is LIMITED PARTNER IN A REAL ESTATE BROKERAGE LIMITED PARTNERSHIP. A sales associate or broker associate may not be an officer or director of a real estate brokerage corporation. Sales associates may be limited partners in a limited partnership.

Two men enter into a business arrangement. The two parties agree that one party will be solely liable for the debts of the business and that the other party will be liable only for the amount of his cash investment in the business. Which type of business arrangement have they formed?

The answer is LIMITED PARTNERSHIP. A limited partnership is composed of one or more general partners and one or more limited partners. The limited partner must make an investment in cash or property, but not services. Limited partners are not liable to creditors of the partnership.

A contract specifies the amount of money that must be paid if the buyer defaults. Which remedy for breach does this describe?

The answer is LIQUIDATED DAMAGES. Frequently the parties will stipulate an amount of money, known as liquidated damages, to be paid in case of default by the buyer.

An individual who received a four-year degree in real estate from a state university is NOT exempt from which license requirement? Post-license education, FREC Course I for sales associates, State license exam, FREC Course II for brokers

State license exam

Business brokers appraise businesses using appraisal methods similar to real estate appraisal EXCEPT for the additional technique of

The answer is LIQUIDATION ANALYSIS. Liquidation analysis is unique to business appraisal

Which term describes an instrument that is filed to give notice of pending legal action involving a parcel of real estate?

The answer is LIS PENDENS. When litigation is initiated involving a specific parcel of real property, a lis pendens (notice of pending legal action) is filed.

Which characteristic applies to both business brokerage and real estate brokerage?

The answer is LONG-TERM LIABILITIES. Real estate brokerage and business brokerage typically involve long-term financing.

Lori Sammis is a licensed real estate sales associate. Under which name may she register and be licensed?

The answer is LORI SAMMIS, PA. Sales associates must have their license issued in their legal name. A sales associate may not be licensed or registered under a trade name. However, for tax purposes, a sales associate is allowed by law to form a professional corporation (PA), and in this case, the DBPR will issue the license in the licensee's actual (legal) name and include the entity designation (PA) after the licensee's legal name.

Which method of legal description is used in subdivisions and is contained in recorded plat maps?

The answer is LOT AND BLOCK. The lot and block method is used for single-family dwellings located in developed subdivisions where plat maps have been recorded in the public records.

Which part of the plumbing system carries wastewater away from the structure?

The answer is LOW-PRESSURE SYSTEM. The low-pressure system carries wastewater away from the home.

The primary function of a planning commission is to

The answer is MAKE POLICY RECOMMENDATIONS TO THE ELECTED GOVERNMENT BODY. The planning commission's primary function is to make recommendations to the elected government body.

The tax exemption filing period for first-time applicants ends on

The answer is MARCH 1. First-time applicants must file an application with the county property appraiser's office on or before March 1.

The interest rate on an adjustable-rate mortgage loan is calculated by adding the index rate to the

The answer is MARGIN. The calculated interest rate is arrived at by adding the selected index to the lender's margin.

A wife purchased a rental house while she was married. She and her husband later divorce. Which term applies to the rental house?

The answer is MARITAL ASSET. Pursuant to Florida Statute 61, marital assets consist of property acquired during the marriage individually by either spouse or jointly by the married couple.

What is the result of multiplying the gross rent multiplier by the monthly rent?

The answer is MARKET VALUE. Market value equals the gross monthly rent multiplied by the gross rent multiplier.

Which settlement procedure involves a negotiated settlement between the disputing parties?

The answer is MEDIATION. Mediation is an informal, non-adversarial process intended to reach a negotiated settlement.

A comparable property has one more bedroom ($8,000) and is on a slightly larger lot ($2,000) than the subject property. The comparative market analysis requires a net adjustment of

The answer is MINUS $10,000 TO THE COMPARABLE PROPERTY. Adjustments are always made to the comparable, not to the subject. (-$8,000 bedroom and -$2,000 for the larger lot equals a -$10,000 adjustment.)

A sales associate receives an earnest money deposit on Saturday. When does the sales associate have to give the deposit to the broker?

The answer is MONDAY. The sales associate has until the end of the next business day to deliver the deposit to the broker.

Government controls influence the real estate market both directly and indirectly. An example of an indirect control is

The answer is MONETARY POLICY. Governments exercise indirect controls through the use of such tools as the monetary policies of the federal government and planned future growth policies of local governments.

Which type of construction involves pouring the slab directly on the ground with the footers?

The answer is MONOLITHIC. Slab-on-grade construction involves pouring a concrete slab directly on the ground. If the footers are poured with the slab, it is a monolithic slab.

Factors that affect the supply side of the real estate market do NOT include availability of

The answer is MORTGAGE CREDIT. Variables that influence supply are the availability of: (1) skilled labor; (2) construction loans and financing; (3) land; and (4) materials. Availability of mortgage credit influences demand.

Individuals who originate loans, often with their own funds, and who may serve as loan correspondents are referred to as

The answer is MORTGAGE LENDERS. Mortgage lenders (mortgage companies) can originate loans, often with their own funds, and may serve as loan correspondents

Which expense is NOT subtracted from potential gross income in order to derive the net operating income of a commercial property?

The answer is MORTGAGE PAYMENT. Operating expenses are grouped into three categories. Fixed expenses include property taxes and hazard insurance. Reserve for replacements is a type of operating expense. Mortgage payments are not considered an operating expense because they are not directly associated with the maintenance and operation of the property.

Which type of title insurance policy is transferable?

The answer is MORTGAGEE. The mortgagee (lender) policy is transferable.

Which pair does NOT belong together?

The answer is MORTGAGEE—BORROWER. The mortgagee is the lender (not the borrower).

A man earned a $7,500 commission by selling a coin-operated laundry business, which has six more years before the expiration of its present lease. The man

The answer is MUST BE REGISTERED WITH THE FLORIDA REAL ESTATE COMMISSION AS A REAL ESTATE LICENSEE. A real estate license is required for selling businesses

Which statement is TRUE regarding the SAFE Act? -Employees of banks and savings associations who engage in residential mortgage loan originations must complete a mortgage loan origination prelicense course. -State-licensed mortgage loan originators are required to complete prelicense education and pass a written qualifications exam. -Employees of bank and savings associations who engage in residential mortgage loan originations are required to complete continuing education. -Employees of banks and savings associations who engage in residential mortgage loan originations are exempted from submitting fingerprints fro a criminal background check.

State-licensed mortgage loan originators are required to complete prelicense education and pass a written qualifications exam. Mortgage loan originators (MLOs) who are not employed by agency-regulated institution are licensed by the state. State-licensed MLOs must complete prelicensure education, pass a written qualification exam, and take continuing education courses.

Which law specified that contracts concerning real property must be in writing and signed by the parties bound to the agreement? -Statute of limitations -Real estate license law -Statute of frauds -Full disclosure act

Statute of frauds. The statute of frauds requires that contracts that convey an interest in real property must be in writing and signed to be enforceable (unless certain specific exceptions apply).

The Florida Real Estate Commission (FREC) issued a seven-year suspension of a broker's license. The broker decides to appeal FREC's final order. Which request should be made by the broker's attorney so that the broker can continue to work during the appeal process?

Stay of Enforcement, if granted, stops the enforcement of a suspension or revocation in the final order pending the outcome of the appeal process. To obtain a stay of the final order, the district court of appeals must issue a writ of supersedes to stop the enforcement pending the outcome of the appeal process...

Which method is NOT one of the four settlement procedures available to the parties when there is an escrow dispute? Stipulation, Mediation, Litigation, Escrow disbursement order

Stipulation. A stipulation is an agreement as the penalty reached when a licensee has violated license law. The four settlement (escape) procedure available include: (1) mediation; (2) arbitration; (3) litigation; and (4) escrow disbursement order.

Real estate escrow funds may NOT be places in which type of depository. -Commercial bank in Florida -Attorney's trust account -Florida saving association -Stock brokerage house

Stock brokerage house. Brokers may maintain an escrow account in a Florida commercial bank, credit union, or saving associate. Some brokers instead choose to have a Florida-based title company that has trust powers maintain the escrow funds, or alternatively, if designated in the sales contract, a Florida attorney may escrow the funds.

Which term refers to a situation where during the early years of a loan the principal balance increases?

The answer is NEGATIVE AMORTIZATION. Negative amortization is a financing arrangement whereby monthly mortgage payments are less than required to pay both interest and principal. The unpaid amount is added to the loan balance.

A case in which the interest paid for borrowed funds is more than the overall rate of return to an investor is an example of

The answer is NEGATIVE LEVERAGE. If the interest paid for borrowed funds is more than the overall rate of return from an investment, the investor's real yield is decreased, resulting in negative leverage.

A tenant signed a lease for ten years requiring a monthly base rent of $1,900, plus 2 percent of all monthly gross sales volume over $95,000. The tenant also must pay all property taxes, insurance, and other costs normally considered property owner's costs. This is a

The answer is NET LEASE. A net lease requires that the tenant (lessee) pay all property costs, including those usually regarded as owner expenses (taxes, insurance, mortgage interest, etc.).

A lease that provides for the lessee to pay a fixed rent plus some of the property's costs is which type of lease?

The answer is NET. In a net lease, the tenant (lessee) pays fixed rent plus property costs such as maintenance and operating expenses.

"Nolo contendere" is a term that means

The answer is NO CONTEST. The Latin term "nolo contendere" means "I do not wish to contest." In legal proceedings it is a plea by a defendant in a criminal case declaring that the individual will not make a defense, but the individual does not admit guilt.

A real estate brokerage company is a transaction broker for a buyer. The buyer wants to purchase a new home so the sales associate takes him to three model centers listed by three competing real estate companies. The sales associate must give the no brokerage relationship notice to

The answer is NO ONE. Effective July 1, 2008, real estate licensees are no longer required to give customers the transaction broker notice. Licensees are also not required to give a disclosure notice at model centers.

The formula to calculate the overall capitalization rate is

The answer is NOI ÷ VALUE (OR PRICE). The formula to calculate a cap rate is net operating income divided by value equals rate

A small general store that existed before a change to residential zoning would be an example of a

The answer is NONCONFORMING USE. If a property's use was lawfully established but no longer conforms to current zoning, the use is allowed to continue as a nonconforming use.

Which legal instrument contains the loan amount, interest rate, and loan term?

The answer is NOTE. The note states the amount of indebtedness, interest rate, repayment method, and term or time period to repay.

A warning for an initial offense that allows a licensee to correct the minor infraction without consequence is known as a(n)

The answer is NOTICE OF NONCOMPLIANCE. A notice of noncompliance is a warning for a minor violation of an initial offense that allows a licensee 15 days to correct the minor infraction without consequence.

The DBPR may issue which penalty for an initial offense of a minor violation by a licensee?

The answer is NOTICE OF NONCOMPLIANCE. The DBPR may issue a notice of noncompliance as a first response to a minor violation by a licensee.

A broker who has a good faith doubt regarding who is entitled to escrow funds should take which action?

The answer is NOTIFY THE FREC IN WRITING OF THE GOOD FAITH DOUBT WITHIN 15 BUSINESS DAYS. If a broker has a good faith doubt as to which party should receive the escrowed property, the broker must notify the FREC, in writing, within 15 business days of having such doubt.

Which method of purchasing mortgaged property relieves the seller of any liability in the event of default and makes the buyer personally liable for the existing mortgage?

The answer is NOVATION. Novation is the substitution of a new obligation for an old one, or the substitution of new parties to an existing obligation, as when the parties to an agreement accept a new debtor in place of an old one. If mortgage property is sold, a lender releases the seller and creates a new note with the buyer, who becomes the individual solely responsible for the debt.

Which entity charters and regulates federal savings associations?

The answer is OFFICE OF THRIFT SUPERVISION. The Financial Institution Reform, Recovery, and Enforcement Act of 1989 created the Office of Thrift Supervision to charter and regulate member federal savings associations.

Federal savings associations that are members of the Federal Home Loan Bank System are regulated by the

The answer is OFFICE OF THRIFT SUPERVISION. The Office of Thrift Supervision (OTS) regulates member federal savings associations.

The Value Adjustment Board is composed of

The answer is ONE SCHOOL BOARD MEMBER, TWO COUNTY COMMISSIONERS, AND TWO CITIZEN MEMBERS. The board is made up of five members.

How many Florida Real Estate Commission members may be licensed as a real estate sales associate?

The answer is ONE. Four members must be licensed as brokers and two members must be consumer members. The seventh member may be either a licensed broker or a sales associate who has held an active license during the two years preceding appointment.

Within one year, how many times may a student who failed the end-of-course examination retest without repeating the course?

The answer is ONE. Within one year of the original examination, a student may retest a maximum of one time. Otherwise, a student failing the end-of-course exam must repeat the course prior to being eligible to retake the end-of-course examination.

The Fed periodically buys and sells an inventory of securities to increase or decrease the amount of money in circulation known as

The answer is OPEN-MARKET OPERATIONS. Open-market operations involve the purchase and sale of U.S. Treasury and federal agency securities.

Which mortgage component increases as a result of negative amortization?

The answer is OUTSTANDING LOAN BALANCE. Negative amortization occurs when the monthly mortgage payment amounts are less than what is needed to pay the monthly interest costs, causing the unpaid loan balance to increase.

A buyer who obtains a mortgage loan that covers the purchase of a condominium plus furniture, appliances, and other personal property such as towels and kitchen utensils has a

The answer is PACKAGE MORTGAGE. A package mortgage includes real and personal property.

Which type of mortgage is used to pledge personal property and real estate as collateral for the mortgage loan?

The answer is PACKAGE. A package mortgage loan includes both real and personal property as security for the debt.

What is the original document used by the federal or state government to transfer land to a private individual?

The answer is PATENT. A patent (the original deed) is a certificate issued by the federal or state government that transfers land to a private individual.

In a deed, the warranty of quiet enjoyment pertains to

The answer is PEACEFUL POSSESSION UNDISTURBED BY OTHERS' CLAIMS OF TITLE. Quiet enjoyment is a provision in a deed guaranteeing that the buyer may enjoy possession of the property in peace and without disturbance by reason of other claims on the title by the seller or someone else

Which type of lease is based on income from the tenant business?

The answer is PERCENTAGE. The tenant pays rent based on gross sales received by doing business on the leased property.

The Statute of Limitations is the authority that outlines the

The answer is PERIOD OF TIME DURING WHICH A CONTRACT MAY BE ENFORCED. The Statute of Limitations prescribes specific time restrictions for enforcement of rights by operation of law.

Which type of deed is used when an individual is appointed by order of a court to settle the estate of a deceased individual?

The answer is PERSONAL REPRESENTATIVE. A personal representative's deed is used to formalize and record the transfer of title when an individual is either appointed by a will or by a court to settle the estate of a deceased person.

What authority originates from the U.S. Constitution and relates to protection of health and welfare of citizens at local levels?

The answer is POLICE POWER. Police power is the authority of government to protect the property, life, health, and welfare of its citizens.

The legal right to enact zoning laws is derived from

The answer is POLICE POWERS. The legal right to enact zoning laws and building codes is derived from governmental rights known as police powers.

The MOST basic of all the background planning studies is the

The answer is POPULATION STUDY. The most basic of all the background planning studies is the population study.

A type of frame construction that allows for large spans between supporting side walls is

The answer is POST-AND-BEAM CONSTRUCTION. Because the posts provide some of the ceiling support, rooms can be constructed with larger spans between the supporting side walls.

Which type of stock is NOT issued by all companies?

The answer is PREFERRED STOCK. Some firms do not issue preferred stock, but all corporations must have common stock because it represents ownership.

On Sunday at an open house, a sales associate receives two offers on a home listed for $300,000. One offer is for $250,000 cash at closing. The second offer is for $295,000 contingent upon the buyer securing a mortgage for 90 percent of the sale price. What action should the sales associate take?

The answer is PRESENT BOTH OFFERS, EXPLAINING THE DETAILS OF EACH CONTRACT TO THE SELLER. Unless a party has previously directed the licensee otherwise in writing, the licensee must present all offers and counteroffers in a timely manner.

Using income capitalization, what is the result of holding the capitalization rate constant and increasing the net operating income?

The answer is PRESENT VALUE INCREASES. If the net income goes up and the capitalization rate remains constant, the present value will increase.

The Federal Reserve increases the reserve requirement for member banks. Which statement BEST describes the result of this action?

The answer is PRESSURE IS ON INTEREST RATES TO RISE. Increasing the reserve requirement takes money out of circulation, making the market less liquid and causing interest rates to rise.

The purpose of a U-shaped trap under a kitchen sink is to

The answer is PREVENT COMBUSTIBLE GASES FROM ENTERING THE HOME. Traps are U-shaped pipes that stay full of water. The water forms a seal in the waste line and prevents odors and combustible gases from entering the home.

A new car has a sticker amount of $31,000. This figure is the car's

The answer is PRICE. Price refers to the amount of money for which a good is actually sold.

A real estate license that is stamped with the official seal of the State of Florida serves as what type of evidence that the individual is a licensee?

The answer is PRIMA FACIE. The seal, when affixed to official documents becomes prima facie evidence that the document is authentic. Prima facie is a legal term used to refer to evidence that is good and sufficient on its face.

FHA requires the borrower to pay which items as part of the monthly payment?

The answer is PRINCIPAL, INTEREST, TAXES, HAZARD INSURANCE, AND MONTHLY INSURANCE PREMIUM, IF APPLICABLE. FHA borrowers are charged an annual mortgage insurance premium added to the monthly mortgage payment. Funding fees are associated with VA mortgage loans.

Which government office assigns Parcel ID numbers to land within a tax district?

The answer is PROPERTY APPRAISER. Each parcel is assigned a Parcel ID number by the county property appraiser's office.

Which information must be disclosed to a prospective buyer regarding a particular property?

The answer is PROPERTY IS LOCATED IN A FLOOD ZONE AREA THAT REQUIRES FLOOD INSURANCE COVERAGE. Licensees have a duty to disclose to buyers all known facts that materially affect the value of a residential property.

Which party is the optionor in an option contract?

The answer is PROPERTY OWNER. The optionor is the property owner that grants (gives) a prospective buyer the right to buy the property within a specified period of time. The person receiving the option to buy is the optionee (prospective buyer).

Which statement is FALSE regarding property taxes?

The answer is PROPERTY TAXES FOR THE PREVIOUS YEAR ARE DUE ON NOVEMBER 1. Property taxes are due November 1 for the current year. Property taxes are paid in arrears, meaning that although they are assessed on January 1, the bill is not due until November 1 of the same year.

For investment purposes, the value of an investment property should be based on the

The answer is PROPERTY'S RETURN AND THE APPRECIATION IT WILL YIELD. For investment purposes, the value of an investment property should be based on the property's return and the appreciation it will yield.

Which protection is NOT given to homesteaded property?

The answer is PROTECTION OF UP TO 640 ACRES OUTSIDE THE CITY LIMITS OF A COMMUNITY. The size of a homesteaded property is restricted to 160 acres outside a municipality (city) or up to ½ acre if the property is located within the city.

Constructive notice is

The answer is PROVIDED BY RECORDING IN THE PUBLIC RECORDS. Constructive notice is accomplished by recording the document in the public records

The broker followed the directions issued in an escrow disbursement order that became the subject of a lawsuit. The consumer-plaintiff obtained a judgment against the licensed real estate broker. It is determined that the consumer is eligible to seek reimbursement from the Recovery Fund. Which expense may NOT be reimbursed from the Fund?

The answer is PUNITIVE DAMAGES. In all cases, punitive damages, treble damages, and interest may not be recovered from the Real Estate Recovery Fund.

The FREC's power to determine license law violations is an exercise of which type of power?

The answer is QUASI-JUDICIAL. Quasi-judicial responsibilities include the power to grant or deny license applications, to determine license law violations, and to administer penalties.

Which type of deed is used to clear title defects?

The answer is QUITCLAIM. A quitclaim deed is useful for clearing existing or potential clouds on the title.

Which range is furthest away from the intersection of the principal meridian and base line?

The answer is R22W. The further away from the principal meridian, the larger the number of the range.

Which partial description describes an area of land six miles wide that touches where the principal meridian and base line intersect?

The answer is RANGE 1 EAST. Townships are north or south of the intersecting point; ranges are east or west of the intersecting point. Range 1 East is the first vertical strip of land east of the principal meridian and touches the intersecting point.

Which business opportunity is an example of a service industry?

The answer is READING AND SUNGLASSES RETAILER. Service industries consist of business opportunities with customers who are primarily local residents.

Which statement does NOT describe the real estate market?

The answer is REAL ESTATE HAS BECOME STANDARDIZED THANKS TO TECHNOLOGY. Real estate is unique (heterogeneous) and not standardized.

What type of license or other credential is required for an individual to engage in the sale, purchase, or lease of businesses for others?

The answer is REAL ESTATE LICENSE. Individuals and business entities engaged in the sale, purchase, or lease of businesses must qualify and be licensed as active real estate licensees.

Which law prohibits a mortgage lender from paying a real estate broker an unearned referral fee?

The answer is REAL ESTATE SETTLEMENT PROCEDURES ACT. Under the Real Estate Settlement Procedures Act (RESPA), a mortgage lender may not pay a real estate broker a fee for referring a buyer to the lender. In Florida, real estate licensees must hold mortgage broker's licenses to legally be paid a fee for referring prospective borrowers to affiliated mortgage lenders.

Which description BEST fits if one were to shade in sections 14, 15, 16, and 17 of a township?

The answer is RECTANGLE. The sections are contiguous and form a horizontal strip that is longer on two sides, forming a rectangle.

An insurance company imposes different insurance tems and conditions on homeowners located in certain neighborhoods. Which discriminatory practice is being committed by the insurance company?

The answer is REDLINING. Redlining is the practice of denying loans or insurance coverage that present different terms or conditions for homes in certain neighborhoods.

An electrical cable stamped with the words 8/2 with ground is MOST appropriate for wiring to a

The answer is REFRIGERATOR. The size wire used in a circuit is based on how much current it will carry. Wires supplying clothes dryers or other large appliances such as refrigerators require an 8-gauge or 6-gauge wire.

Which requirement must be accomplished to register a real estate brokerage as a general partnership?

The answer is REGISTER THE PARTNERSHIP IN THE NAME OF THE PARTNERSHIP WITH AT LEAST ONE PARTNER LICENSED AS AN ACTIVE BROKER. General partnerships are created by written, oral, or implied contract. Partnerships registered as real estate brokers obtain registration in the name of the partnership. The partnership itself is registered, and at least one of its partners must be licensed as an active broker.

Which statement concerning REITs is FALSE?

The answer is REITS REQUIRE INVESTORS TO MAKE CONSIDERABLE OUTLAYS OF CASH FOR PROPERTY MANAGEMENT SERVICES FOR REAL ESTATE HOLDINGS. REITs provide a way for individual investors to pool resources for investment. The properties are managed by skilled centralized management.

A map that indicates the size and location of individual lots, streets, and public utilities within a new development is called a(n)... topography map, subdivision plat map, elevation, architectural drawing

Subdivision plat map.

A tenant has six months remaining on her lease. The tenant assigns two of the remaining months to another person to use the property which she is on vacation in Europe. What is this called? -Assignment -Sublease -Variable lease -Partial lease

Sublease.

Susan has six months remaining on her lease. She assigns two of the remaining months to another person to use the property while she is on vacation in Europe. What is this called? -Assignment -Sublease -Variable lease -Partial lease

Sublease. A sublease is used when the lessee assigns less than the entire property or assigns all of the property for less than the full remaining period.

Which mortgage clause allows another mortgage created at a later date to take priority? -Blanket -Retroactive -Subordination -Exculpatory

Subordination. A subordination clause provides that the lender (usually the seller) voluntarily will allow a subsequent mortgage to take priority over there lender's otherwise superior mortgage (the act of yielding priority).

The priority of liens may be changed by which written agreement? -Novation -Subordination -Lis pendens -Satisfaction

Subordination. Under a subordination agreement, the holder of a prior lien (lien with an earlier recording date) agrees to allow a junior lienholder's interest to move ahead of the prior lien.

Which principle states that an informed purchaser will NOT pay more for real estate than the cost of acquiring an equally desirable alternative property? -Substitution -Conformity -Market value -Balance

Substitution. The principle of substitution means that a prudent buyer or investor will pay no more for a property than the cost of acquiring, though purchase or construction, an equally desirable alternative property.

A person who dies with a valid will has, in effect, died... -testate. -intestate. -with descent. -in trust.

Testate. To die testate indicates the deceased person prepared a will before death.

A Florida real estate agent sold a property on Sept. 9, 2011. On Sept. 30, that agent's license becomes involuntary inactive. When that transaction closes on Oct. 20, 2011:

That agent will be paid

A Florida real estate agent sold a property on Sept. 9th, 2011. On October 1st 2011, that agent's license becomes involuntary inactive. When that transaction closes on Oct. 20th, 2011:

That agent will be paid

When a licensee is given a notice of noncompliance:

That licensee has 15 days to correct a minor infraction

Which statement about the economic concept of demand is FALSE?

The AVAILABILITY OF BUILDING MATERIALS INFLUENCES DEMAND is FALSE - has to do with supply

The Sherman Antitrust Law and Florida antitrust laws prohibit which activity? -The buyer and broker negotiating the fee in a buyer brokerage agreement -The seller and broker negotiating the commission percentage based on the degree of service desired by the seller -The seller and broker negotiating the final commission to be paid to the broker -The Associate of REALTORS recommending a standard commission rate based on surveys of membership

The Association of REALTOR recommending a standard commission rate based o surveys of membership. It is illegal for real estate brokers to conspire to fix commissions or fees for the services they perform. The amount of commission to be paid negotiable.

When a real estate school changes business address and the school permit holder notifies the FREC within the required ten days, the instructor permits of the instructors who continue to teach for the school

The answer is REMAIN IN FORCE. When a real estate school changes business address, the school permit holder must file with the FREC a notice of change of address. The notification fulfills the change of address notification requirements for instructors who remain employed by the school, and the instructor permits remain in force. (This is also true of sales associates and broker associates working for a broker who changes business address and notifies the FREC within ten days.)

A man owns a farm in fee simple. He deeds the farm to a friend until the friend dies, at which time a woman will acquire a fee simple title to the farm. The woman's interest in the farm is a

The answer is REMAINDER ESTATE. The remainderman owns a remainder estate while the life estate exists

Which property is NOT included in the definition of real property according to Chapter 475, F.S.?

The answer is RENTAL LOT IN A MOBILE HOME PARK. Chapter 475, F.S., defines real property to mean any interest or estate in land and any interest in business enterprises or business opportunities, including any assignment leasehold, subleasehold, or mineral right. However, real property does not include the renting of a mobile home lot or recreational vehicle lot in a mobile home park or travel park.

The cost to duplicate the business structure being appraised having the same use but differing physically somewhat is known as

The answer is REPLACEMENT COST. When replacement cost is used, the appraiser calculates the cost that would result in a building having the same use and capabilities as the one being appraised, even though the new building might differ physically.

Which type of cost is calculated using similar, but NOT identical, building materials, resulting in equal utility as compared with the subject property?

The answer is REPLACEMENT. Replacement cost is the amount of money required to replace a structure having the same use and functional utility as the subject property, but using modern, available, or updated materials.

The Florida Real Estate Commission is empowered by law to

The answer is REPRIMAND, FINE, OR OTHERWISE DISCIPLINE LICENSEES. Possible administrative penalties include denial of an application for a license; refusal to recertify a license for renewal; revocation of a license; suspension of a license; fine; probation; reprimand; citation; and notice of noncompliance

Which disclosure notice must be signed by the buyer and the seller in certain nonresidential transactions?

The answer is REQUEST TO USE DESIGNATED SALES ASSOCIATE REPRESENTATION. The buyer and seller must sign the disclosure notice stating that their assets meet the threshold and requesting that the broker use the designated sales associate form of representation.

Which item is NOT a deductible expense for an income-producing property?

The answer is RESERVE FOR REPLACEMENT. Reserve for replacement is not a cash expense and therefore is not deductible.

Which description BEST fits an option contract?

The answer is UNILATERAL. In an option contract, the owner (optionor) is bound to perform the terms of the option if required to do so by the optionee. The optionee, however, may elect to walk away from the transaction because the option contract grants the optionee a right, not an obligation, to buy the property.

Which expense does the VA charge veteran borrowers in order to help the government defray the costs of foreclosures?

The answer is USER'S FEE. The VA requires a user's fee (or funding fee) to help the government defray the cost of foreclosures.

Local government exercises its greatest effect on the real estate business by

The answer is USING ZONING, TAXATION, AND THE PLANNING PROCESS. Local government, through its police powers, come the many ordinances and regulations governing zoning, building codes, health standards, city planning, and rent controls. Property taxes provide the bulk of revenue for city and county governments.

Which expense is subtracted to derive NOI?

The answer is VACANCY AND COLLECTION LOSSES. Vacancy and collection (V&C) losses are subtracted from PGI to derive EGI. V&C loss is one of the items deducted in a reconstructed operating statement to calculate NOI

The parties in a real estate sale contract are BEST described as the

The answer is VENDOR AND VENDEE. The parties to a sale contract are the vendor (seller) and the vendee (buyer).

Which type of lien is a specific lien?

The answer is VENDOR'S. A specific lien affects only a certain specified property. A vendor's lien is created when the seller (vendor) finances part of the down payment on the purchase.

Which direction describes a range?

The answer is VERTICAL. Ranges are vertical (north/south) strips of land parallel to the principal meridian.

A man owns a condominium for his lifetime. Upon his death, the property will convey to his sister. Which term applies to the sister?

The answer is VESTED REMAINDERMAN. When a life estate ends, the property sometimes reverts to a third party, called a remainderman. A vested remainderman refers to someone whose legal name is specified in the life estate. A contingent remainderman is not identified by legal name, such as "first born grandchild."

Title to real property is technically conveyed when the deed is

The answer is VOLUNTARILY DELIVERED AND VOLUNTARILY ACCEPTED. Title to real property is conveyed when the deed is voluntarily delivered to and accepted by the grantee.

Which alienation is voluntary?

The answer is WILL. Voluntary alienation includes transfer of property by means of deed or will.

The seller instructs the listing broker NOT to show his home to members of a protected class. The broker informs the seller that this would be a violation of the Fair Housing Laws, but the seller is insistent. Which choice is the broker's best course of action under these circumstances?

The answer is WITHDRAW FROM THE LISTING AGREEMENT. Licensees may not violate the law. For example, if a principal instructs a listing broker not to show the property or sell to a member of a particular minority or ethnic group, the broker cannot obey the principal's instructions because doing so would violate the law

Which action does NOT terminate a single agent brokerage relationship with the seller?

The answer is WITHDRAWAL OF AN OFFER TO PURCHASE. The brokerage relationship exists between the brokerage company and the seller. Therefore, withdrawal of an offer to purchase does not terminate the single agent relationship entered into with the seller.

A sales associate moved from Lake City, Florida to Key West, Florida. What action must the licensee take?

The answer is WITHIN 10 DAYS OF MOVING, INFORM THE DBPR IN WRITING OF THE CHANGE OF ADDRESS. Licensees must notify the DBPR in writing within 10 days of a change in current mailing address.

A developer of a new residential subdivision hires a sales staff to sell homes. The sales staff receives a base salary plus 1 percent of the sale price of each home they sell. Are the people who sell these homes for the developer required to hold real estate licenses?

The answer is YES, THE SALES STAFF MUST HOLD REAL ESTATE LICENSES BECAUSE THEY ARE PARTIALLY COMPENSATED BASED ON ACTUAL SALES. An owner-developer's sales staff must hold active real estate licenses in order to be paid a commission or other compensation based on actual sales (that is, on a transactional basis). The sales staff is exempt from real estate licensure if paid strictly on a salaried basis

A tenant of a rental apartment has given notice to vacate at the end of the lease. Must the tenant allow the management company to show the premises to a prospective tenant?

The answer is YES, THE TENANT MUST ALLOW THE MANAGEMENT COMPANY TO SHOW THE PROPERTY TO A PROSPECTIVE TENANT, PROVIDED REASONABLE NOTICE IS GIVEN. A tenant may not unreasonably withhold consent for a landlord to enter rented premises to exhibit or show the premises.

Which regulation requires lenders to disclose the annual percentage rate of interest and finance charges?

The answer is Z. The Truth-in-Lending Act is implemented by Federal Reserve Regulation Z. The law requires lenders to disclose the annual percentage rate of interest and finance charges imposed on consumers.

City planning commissions typically do NOT have final authority for

The answer is ZONING REVISIONS. Three areas of responsibility for which city planning commissions are commonly delegated final authority are: (1) subdivision plat approval, (2) site plan approval, and (3) sign control.

In commercial real estate transactions that meet specific criteria, a real estate brokerage may use one sales associate to work as a single agent of the buyer and another sales associate to act as a single agent of the seller. Which criteria must be met? -The buyer and seller must have assets of at least $2 million -The buyer and seller must agree to sign the Irrevocable Consent to Service Agreement -The broker must serve as a neutral party and not give guidance or representation to the buyer and the seller -The buyer and seller must agree to sign the transition to Two Single Agents Notice

The broker must serve as a neutral party and not give guidance or representation to the buyer and the seller. The buyer and seller may request, in certain commercial real estate transactions, the two sales associates be designed, with one to act as a single agent for the buyer and the other sales associate to act as a single agent of the seller. the broker serves as a neutral party helping to facilitate the process without giving guidance or representation to the parties in the transaction.

If a builder bought a lot for $40,000 and built a house on that lot. It cost him $200,000 to build the house. He hired an appraiser to appraise the house. The appraiser said it is worth $295,000. A young couple offered to buy the house for $280,000 and the builder agreed:

The cost of the house is $240,000 and the value is $295,000

If a builder bought a lot for $40,000, and built a house on that lot. It cost him $200,000 to build the house. He hired an appraiser to appraise the house. The appraiser said it is worth $295,000. A young couple offered to buy the house for $280,000 and the builder agreed:

The cost of the house is $240,000 and the value is $295,000

Which statement is unique to the transaction broker relationship? -The customer is not responsible for the acts of the licensee -The agent is obligated to a duty of obedience -The licensee must disclose all known facts that materially affect the value of the real property -The buyer or seller must give written consent to enter into the brokerage relationship

The customer is not responsible for the acts of the licensee. The duty of obedience is unique to the single agents relationship. In all three brokerage relationships, when dealing in residential real estate, the licensee must disclose all known facts that materially affect the value of the real property. The licensee is not required to give written notification of the brokerage relationship duties in a transaction broker relationship. The buyer or seller is not required to sign the disclosure unless transitioning from one brokerage relationship to another.

A broker is NOT required by law to notify the FREC of conflicting demands in which situation?

The day after signing the sale contract and reviewing the condominium documents, the buyers notify the broker that they want to cancel the contract.

If a married couple who files jointly realized a profit from the sale of their home that exceeds $500,000, what is the result? -The homeowners will not pay capital gain tax if at least one of them is over 55. -Up to $125,000 of the excess profit will be taxed as a capital gain. -The excess gain will be taxed at the current applicable capital gains rate. -The excess gain will be taxed at the homeowner's income tax rate.

The excess gain will be taxed at the current applicable gains rate. Gain is not taxed up to $500,000.

Which of the following is a material fact?

The fact that the roof leaks

The government philosophy of Laissez-Faire is a belief that:

The government does not need to interfere in private business affairs

Which statement of FALSE regarding biweekly mortgages? -Each payment is equal to one half the normal monthly payment -The borrower makes the equivalent of one extra month's payment each year -The interest rate is typically higher compared with fixed-rate mortgages amortized monthly -The loan is typically paid off in less time

The interest rate is typically higher compared with fixed-rate mortgages amortized monthly. The biweekly mortgage has the same interest rate as the equivalent monthly amortized mortgage loan, but because an extra month's payment is made each year, the loan is paid off sooner, reducing the total amount of interest paid over the life of the loan.

The minimum escrow deposit is:

The is no minimum

When money is paid out of the Real Estate Recovery Fun, on behalf of a Florida real estate licensee:

The judgment must be against an individual licensee

The mortgagee's title insurance policy

The lender's policy protects the lender against title defects. The mortgagee's title insurance policy is ISSUED FOR THE AMOUNT OF THE MORTGAGE LOAN AND IS TRANSFERABLE. AND, IT WILL PROTECT THE NEW OWNER (IF TRANSFERRED) UP TO THE UNPAID BALANCE OF THE MORTGAGE LOAN.

Which element is NOT a cause of action for fraud in a real estate transaction? -The buyer was damaged by the action -The buyer relied on the misstatement of fact -The licensee failed to disclose a material fact concerning the transaction -The licensee represented to buyer in the transaction

The licensee represented the buyer in the transaction. There are four elements of a cause of action for fraud: (1) the licensee made a misstatement or failed to disclose a material fact; (2) the licensee either knew or should have known that the statement was not accurate or that the undisclosed information should have been disclosed; (3) the buyer relied on the misstatement; and (4) the buyer was damaged as a result

When money is paid out of the Real Estate Recovery Fund, on behalf of a Florida real estate the following apply:

The licensee's license will be automatically suspended, The maximum amount that can be reimbursed in any single transaction in $50,000 and The judgment holder cannot be reimbursed for attorney's fees and court costs

When a broker's license is revoked, what happens to the licenses of the sales associates that are registered under the broker? -The licenses become null and void -The licenses are suspended -The licenses revert to involuntary inactive status -The licenses remain in force

The licenses revert to involuntary inactive status. The DBPR places the licenses of any sales associate registered under the penalized broker on involuntary inactive status.

If a real estate brokerage is arranged as a limited partnership:

The limited partners are not required to register with the DBPR

If a real estate brokerage is arranged as limited partnership:

The limited partners are not required to register with the Department of Business & Professional Regulation

A person applies for a mortgage loan from a local credit union. The loan officer did not give the loan applicant a copy of the HUD information booklet concerning settlement costs at the time of loan application. Which statement is TRUE regarding this situation?

The loan officer has three business days to give the loan applicant a copy of the information booklet. RESPA disclosures at time of loan or within 3 business days of: 1. Special Information Booklet (HUD) 2. Good Faith Estimate (GFE) 3. Servicing disclosure statement

What is meant by the phrase "the automatic working of the system"? -Technology has improved efficiency. -Many jobs historically performed by the human workforce are now automated. -The marketplace of producers and consumers interact to determine what products should be produced and at what cost. -Many jobs have been moved overseas where labor costs are lower.

The marketplace of producers and consumers interact to determine what products should be produced and at what cost. We have a relatively free enterprise system. No committee from the Department of Commerce or any other agency has to survey the national market to determine what goods and services are selling well and which ones should be removed from the marketplace.

Where does the money in the Florida Real Estate Recovery fund come from?

The money is collected from licensees

Where does the money in the recover fund come from?

The money is collected from licensees

What is the result of increasing the discount rate? -The borrower pays higher out-of pocket expenses at closing. -The money supply increases. -The money supply decreases. -The local banker is not affected by increasing the discount rate.

The money supply decreases. If the discount rate is increased, member banks have to pay a higher interest rate for money borrowed from their district bank. The higher interest rate is passed on in the form of higher interest to consumers. This reduces the number of loans made and less money circulates in the marketplace.

Which statement is TRUE regarding a level payment plan mortgage? -The monthly principal and interest payment remains constant for the entire loan term. -The amount of interest owed is paid in full during the first few years of the loan. -The mortgage typically includes a prepayment penalty clause -The principal is repaid in equal amounts each month.

The monthly principal and interest payment remains constant for the entire loan term. The borrower pays the same amount each month; however, the portion used to pay interest decreases each month, while the portion to repay the principal increases each month.

Who can bid at a foreclosure auction?

The mortgagee, The mortgagor and A Realtor with an active Florida real estate license

Which statement concerning broker's price opinions (BPOs) is true? -All BPOs must conform to Uniform Standars of Professional Appraisal Practice (USPAP) -A BPO is also referred to as an appraisal of real property -A broker's license is required to conduct a BPO -The payment for a BPO must be paid to the broker and not directly to the sales associate who prepared the BPO

The payment for a BPO must be paid to the broker and not directly to the sales associate who prepared the BPO.

Florida's statute of limitation defines... -requirements for enforceable contracts for the sale of land. -prescribed penalties for violations of F.S. 475. -the period of time that a written contract is legally enforceable. -the technical terms of advertisements regarded as deceptive.

The period of time that a written contract is legally enforceable. The statue of limitation designated the period of time during which the terms of a contract may be enforced.

A school administrator relocates her real estate school to a new location. The school administrator is so busy with movers and getting the space set up to offer classes that she forgets to notify the DBPR within ten days of her change of address. What, if anything, will happen to the school permit? -The permit will cease to be in force -The permit will become null and void -The school permit will be automatically placed in involuntary inactive status -The school permit will be canceled

The permit will cease to be in force. The Commission must be notified within ten days when a registered school changes business address. The school permit will cease to be in force until the Commission receives proper notification.

If a person does not pay their ad valorum tax:

The property will be sold at a tax deed auction

If a person does not pay their real estate property tax:

The property will be sold at a tax deed auction

A real estate license can remain voluntary inactive for:

The rest of the licensee's life

Which of the following is a material fact?

The roof leaks

A sales associate has held an active real estate license since 2000. The licensee neglected to renew his real estate license prior to the expiration date in March of this year. Which statement does NOT apply to this situation? -The sales associate must pay a late fee -The license is in involuntary inactive status -The sales associate is required to complete 28 hours of a Commission-prescribed education course -The licensee must complete 14 hours of continuing education

The sales associate is required to complete 28 hours of a commission-prescribed education course. The license reverts to involuntary inactive status when it is not renewed at the end of the license period. When a licensee has ben in involuntary inactive status for 12 months or less, the licensee may satisfy the education requirement by completing 14 hours of FREC-approved continuing education. The 28-hour course is required if the license has been expired for more than 12 months but less than 24 months.

A sales associate moves from Jacksonville, Florida, to Atlanta, Georgia. The associate continues to be employed by the same broker, who has an office in Atlanta. Which statement is TRUE?

The sales associate must notify the DBPR in writing within 60 days regarding her change in residency.

A seller wants to give something extra to the sales associate beyond the sales commission to be paid for a transaction. The seller decided to give the sales associate a shopping mall gift certificate. Which statement applies to this situation? -The seller can give the sales associate a gift certificate because it is not cash -The only compensation the the sales associate may receive is part of the commission, regardless of circumstance -The seller cannot give the gift certificate to the sales associate directly, but may give it to the sales associate's broker with a note requesting the the gift certificate be given to the sales associate for fine service. -All compensation must be paid in cash only.

The seller cannot give the gift certificate to the sales associate directly, but may give it to the sales associate's broker with a note requesting that the gift certificate be given to the sales associate for fine service. All monies or other compensation earned by sales associates as a result of any real estate services must be paid to the sales associate by their employers not directly by a buyer or seller.

A buyer offered $225,000 for a seller's property. The seller countered at $250,000. The buyer did not accept the seller's counteroffer. The seller told her broker that she was revoking the counteroffer and accepting the buyer's original offer. Which statement is TRUE regarding this situation?

The seller cannot now accept the original offer, because it was killed by the counteroffer.

What does Florida's Homeowner Association Law require of sellers who own property subject to a mandatory homeowners' association? -The seller must provide the buyer with a disclosure summary regarding the association. -The seller must inform the buyer that the buyer will be required to escrow the association dues. -The seller is not required to provide any disclosures to the buyer, provided the information is available in the public records. -The seller must provide the buyer with copies of property tax records from the past three years.

The seller must provide the buyer with a disclosure summary regarding the association. Florida law required sellers of property subject to a homeowners' association to provide buyers with a disclosure summary regarding the association, the existence of restrictive covenants, and any assessment that the association imposes.

Zoning ordinances regulate... -the firewall rating of a wall located between the kitchen and dining areas of a restaurant. -the setback requirements of a building from the property lines. -the electrical rating of the wiring in a residential home. -all of the above.

The setback requirements of a building from the property lines. Zoning laws regulate the purposes for which structures can be used, setback requirements, minimum square footage requirements for buildings, and maximum building height.

T-intersection lots are a type of corner lot.

The statement is FALSE. A T-intersection lot is an interior lot that suffers from its location at the end of a T-intersection. T-intersection lots face an oncoming street.

A contract for deed is a method of buying a property in a single lump sum.

The statement is FALSE. A contract for deed is a method for buying real property, usually with very little cash investment. The seller accepts a down payment from the buyer and finances the rest of the purchase price.

A corporation sole is permitted to register as a real estate broker.

The statement is FALSE. A corporation sole cannot be registered as a real estate broker. A corporation sole is an ecclesiastical or church organization, usually headed by a bishop or other clerical official who has been empowered by a church to hold title to church property. Before dealing with a corporation sole, a broker should obtain a written opinion from an attorney who has experience in such titles.

A fixture is defined as an item of personal property temporarily affixed to real property with the intention that it be moved at a later date.

The statement is FALSE. A fixture is an item of personal property converted to real property by attaching it to the real property with the intention that it becomes permanently a part thereof.

A real estate sales associate whose license was expired at the time of performing real estate services must renew the license prior to the title closing in order to lawfully receive compensation for the transaction.

The statement is FALSE. A licensee may not practice real estate with an expired license. A broker or sales associate who does so is committing an unlawful act. The license must be active at the time the real estate services are performed.

A person appointed by a court of law to sell real estate must be a licensed real estate broker.

The statement is FALSE. A person appointed by a court of law to sell property is exempt from licensure.

An agency relationship between a principal and broker may be terminated by the principal for any reason.

The statement is FALSE. A principal is not free to revoke an agency relationship in all circumstances. The principal may revoke an agency if the agent breaches one or more of the fiduciary duties. Several other events could terminate an agency relationship, such as the fulfillment of the agency's purpose, mutual agreement to terminate the agency, or bankruptcy of the principal.

A resident licensee who becomes a nonresident must notify the Commission within 45 days of the change in residency and comply with all nonresident requirements.

The statement is FALSE. A resident licensee who becomes a nonresident must notify the Commission within 60 days (not 45 days) of the change in residency and comply with all nonresident requirements.

The FREC may issue a summary suspension when a licensee's actions endanger the public.

The statement is FALSE. A summary suspension (or emergency suspension) must be issued by the DBPR Secretary or a legally appointed designee of the Secretary.

A tenancy at will is said to exist when the tenant, after rightfully being in possession of the rented premises, continues possession after the tenant's right has ended.

The statement is FALSE. A tenancy at will is a leasehold estate in which the tenant holds possession of the premises with the owner's permission but without a fixed term. A tenancy at sufferance exists when the tenant, after rightfully being in possession of the rented premises, continues possession after the tenant's right has ended.

A transaction broker is a broker who provides representation to a buyer, a seller, or both in a real estate transaction, and who represents either the buyer or seller in a fiduciary capacity or as a single agent.

The statement is FALSE. A transaction broker is a broker who provides limited representation to a buyer, a seller, or both, but who does not represent either in a fiduciary capacity or as a single agent.

A license applicant is NOT required to disclose a prior criminal conviction if adjudication was withheld.

The statement is FALSE. A withhold of adjudication of a criminal offense must be disclosed on the license application.

The Florida Real Estate Commission possesses the authority to sentence a licensee to imprisonment.

The statement is FALSE. All imprisonment penalties must be obtained in a court of law because the Commission lacks the authority to assess such penalties.

The Florida Real Estate Commission consists of seven members, four of which must be consumer members who have never been brokers or sales associates.

The statement is FALSE. Among the seven members of the Commission, only two must be consumer members who have never been brokers or sales associates.

The primary appeal of an adjustable-rate mortgage (ARM) is a lower interest rate over the life of the loan.

The statement is FALSE. An ARM offers a lower initial interest rate, but over the life of the loan an ARM's rate can rise considerably higher than the initial rate.

A comparative market analysis (CMA) must conform to the Uniform Standards of Professional Appraisal Practice (USPAP).

The statement is FALSE. An appraisal report, not a CMA, must conform to the USPAP. A comparative market analysis (CMA) is an informal estimate of market value performed by a real estate licensee for the seller to assist in arriving at an appropriate listing price, or if working with the buyer, an informal estimate of market value to assist the buyer in arriving at an appropriate offering price.

An ostensible partnership may be registered as a real estate brokerage entity.

The statement is FALSE. An ostensible (or quasi partnership) is considered to be fraudulent and deceitful if the public is deceived into believing that a partnership exists.

Appealing a final order stops the enforcement of any penalty stipulated in that order.

The statement is FALSE. Appealing an order does not stop enforcement of the penalty. If the penalty would suspend or revoke a license, however, the court will normally grant supersedes (stay suspension) as a matter or right on conditions considered reasonable.

Broker applicants are required to fulfill an experience requirement of at least 36 months of real estate experience during the five-year period preceding becoming licensed as brokers.

The statement is FALSE. Broker applicants are required to fulfill an experience requirement of at least 24 months of real estate experience during the five-year period preceding becoming licensed as brokers.

Weather heads are used to protect an electric circuit from damage caused by too much current.

The statement is FALSE. Circuit breakers are used to protect an electric circuit from damage caused by too much current. A breaker will trip (shut off) if the circuit is forced to carry more current than the wire can handle. Inside the breaker is a tripping mechanism that will not allow the breaker to be reset until the wire has cooled. The weather head attaches to the utility service cable and prevents water damage to the wiring.

State-chartered commercial banks must display the word "National" somewhere in their name.

The statement is FALSE. Commercial banks chartered by the federal government must display the word "National" or the initials "N.A." somewhere in their name.

Confidential information learned during the course of the single agency cannot be divulged by the broker until the transaction has concluded and the agent-principal relationship has ended.

The statement is FALSE. Confidential information learned during the course of the single agency cannot be divulged before or after the transaction has concluded and the agent-principal relationship has ended.

Constructive notice is direct knowledge acquired in the course of a transaction.

The statement is FALSE. Constructive notice refers to information that has been made public by recording the information in the public records.

Cost can be defined as the amount of money for which a good is actually sold.

The statement is FALSE. Cost is the total expenditure required to bring a new improvement into existence plus the cost of the land. Price refers to the amount of money (or its equivalent) for which a good is actually sold.

Deposit accounts are insured to $100,000 per depositor in each bank or thrift the FDIC insures.

The statement is FALSE. Deposit accounts are insured to $250,000 per depositor in each bank or thrift the FDIC insures. The coverage limit will return to $100,000 (except for IRAs), effective January 1, 2014.

Each 24-by-24-mile square created by intersecting guide meridians and correction lines is called a quadrant.

The statement is FALSE. Each 24-by-24-mile square created by intersecting guide meridians and correction lines is called a check, not a quadrant.

Each township contains 6 sections.

The statement is FALSE. Each township contains 36 sections.

A real estate licensee who enters into a transaction broker relationship must give the customer a transaction broker disclosure notice.

The statement is FALSE. Effective July 1, 2008, licensees are no longer required to give customers a written disclosure notice when a transaction broker relationship is chosen.

The Federal Housing Administration (FHA) regulates interest rates.

The statement is FALSE. FHA does not regulate interest rates. Lenders set their own interest rates for FHA-insured loans to reflect market conditions.

If escrow funds are held by a title company, the broker is under no obligation to deliver the funds to the title company within three business days.

The statement is FALSE. FREC rules require that the broker request a written receipt from the attorney or title company. The purpose of the receipt is to document that the funds were delivered to the escrow agent by the end of the third business day.

The Uniform Standards of Professional Appraisal Practice are standards of practice that must be followed by appraisers but NOT real estate licensees.

The statement is FALSE. Florida law requires appraisers, real estate brokers, and sales associates to abide by the Uniform Standards of Professional Appraisal Practice when conducting appraisals of real property.

Follow-up refers to returning phone calls to prospective buyers in a timely manner.

The statement is FALSE. Follow-up is what a sales associate does for buyers and sellers after the sale (closing) to promote customer loyalty.

When a broker's license is revoked, the licenses of the sales associates registered under the broker will be automatically suspended.

The statement is FALSE. If a broker's license is suspended or revoked, the sales associates' licenses will be automatically placed in involuntary inactive status. A sales associate's license is returned to active status as soon as a new broker is chosen and the information is filed with the DBPR.

If a home sells for $225,000, the documentary stamp tax on the deed will be $787.50.

The statement is FALSE. If a home sells for $225,000, the documentary stamp tax on the deed will be $1,575. $225,000 ÷ $100 = 2,250 taxable increments. 2,250 × $.70 = $1,575.

The Civil Rights Act of 1866 was overturned by the U.S. Supreme Court in the Jones v. Mayer case.

The statement is FALSE. In 1968 the Jones v. Mayer case upheld the Civil Rights Act of 1866.

Real estate professionals who specialize in the sale, purchase, and lease of businesses must hold a commercial license.

The statement is FALSE. In Florida, an active real estate sales associate or broker license is required to market business opportunities. No license distinction is made regarding the type of real estate.

In an option contract the optionor has an exclusive right to buy the property within a specified period.

The statement is FALSE. In an option contract the optionee (NOT the optionor) has the exclusive right to buy the property within a specified period for a specified price and terms.

An option contract is a bilateral contract.

The statement is FALSE. In an option contract, the owner (optionor) is bound to perform the terms of the option if required to do so by the optionee. The optionee, however, may elect to walk away from the contract because the option contract grants the optionee a right, not an obligation to buy the property.

Land refers NOT only to the surface of the earth but also to all improvements permanently attached to the land, such as homes, fences, and sewers.

The statement is FALSE. Land does not include improvements permanently attached to the land, though it does include everything attached to it by nature. Real estate refers to land and all improvements attached to the land.

The Florida Residential Landlord and Tenant Act mandates that landlords pay tenants interest on their security deposits.

The statement is FALSE. Landlords are obligated to account for deposits and advance rents in one of three ways. One way allows the landlord to hold the money in a separate noninterest-bearing Florida bank and not commingle, hypothecate (pledge as security for a debit), or use the funds until due to the tenant.

Each member of the Florida Real Estate Commission is accountable to the Department of Business and Professional Regulation.

The statement is FALSE. Members of the Commission are accountable to the governor, not the Department of Business and Professional Regulation.

Mortgage loan originators create loans with either their own funds or money borrowed from financial institutions.

The statement is FALSE. Mortgage lenders (mortgage companies) originate loans with either their own funds or money borrowed from financial institutions. The role of the mortgage loan originator is limited to acting as an agent. A mortgage loan originator submits loan applications from prospective borrowers to various mortgage companies and other lenders until the loans are approved or abandoned. If a loan application is approved, the mortgage loan originator earns a negotiated loan origination fee and drops out of the loan transaction.

A sales associate who works part time for two different real estate offices may be issued multiple licenses.

The statement is FALSE. Multiple licenses are issued to brokers who qualify as the broker for more than one business entity. Because a sales associate or broker associate may register under only one employer at a time, neither a sales associate nor a broker associate may hold multiple licenses.

Age is a protected class under the Fair Housing Act.

The statement is FALSE. Protected classes under the Fair Housing Act include race, color, religion, sex, national origin, familial status, and handicap status.

Replacement cost is the amount of money required to build an exact duplicate of the structure.

The statement is FALSE. Replacement cost is the amount of money required to replace a structure having the same use and functional utility as the subject property, but using modern, available, or updated materials. Reproduction cost is the amount of money required to build an exact duplicate of the structure.

MOST residential and office building leases are variable leases.

The statement is FALSE. Residential and office building leases are typically gross leases. Variable leases are usually tied to an index, such as the consumer price index (CPI).

Residential sales are defined as the sale of improved residential property of two or fewer units, the sale of unimproved residential property intended for use as two or fewer units, or the sale of agricultural property of five or fewer acres.

The statement is FALSE. Residential sales are defined as the sale of improved residential property of four (not two) or fewer units, the sale of unimproved residential property intended for use as four (not two) or fewer units, or the sale of agricultural property of ten (not five) or fewer acres.

Real estate schools are permitted to offer refunds to students who fail their licensing exams.

The statement is FALSE. Schools are prohibited from offering refunds to students who fail their exams.

When a wronged party in a breached contract sues for compensatory damages, it is to have the courts force the other party to perform as the contract specifically states.

The statement is FALSE. Specific performance is when an injured party sues to have the courts enforce the terms of a contract. A suit for compensatory damages is a suit that seeks money damages.

Suspension of an individual's license is a permanent penalty.

The statement is FALSE. Suspension of an individual's license is a temporary penalty. The maximum period for which the Florida Real Estate Commission may suspend a license is ten years.

Under a tenancy in common, each tenant must hold an equal percentage of ownership in the property.

The statement is FALSE. Tenants in common may hold different percentages of ownership in the property. However, each tenant holds an undivided interest in the property, meaning that tenants in common own an interest in the entire property rather than just a particular part of the property.

The Fair Housing Act recommends the use of an equal opportunity poster that features the equal housing logo and a statement that pledges adherence to the Fair Housing Act.

The statement is FALSE. The Act requires, not recommends, the use of an equal opportunity poster featuring the equal housing logo and a statement that pledges adherence to the Fair Housing Act.

The Supreme Court found "do not call" lists to be unconstitutional. Thus, a licensee may freely call anyone in Florida to solicit business.

The statement is FALSE. The Federal Trade Commission maintains a "do not call" list. The list has not been found to be unconstitutional. A licensee is not permitted to call an individual on the list unless the licensee has had a business relationship with the individual on the list. A licensee may call an FSBO seller if the licensee has a bona fide buyer interested in the seller's property, even if the seller is listed on the "do not call" list.

The Florida Vacation Plan and Time-Sharing Act applies to time-share plans consisting of more than 12 time-share periods over a span of at least three years and the facilities or accommodations are located within the state of Florida.

The statement is FALSE. The Florida Real Estate Time-Share Act applies to time-share plans consisting of more than seven, not 12, time-share periods over a span of at least three years and the facilities or accommodations are located within the state of Florida.

The largest trade organization in the world is the Real Estate Professional Society (REPS).

The statement is FALSE. The National Association of REALTORS® (NAR) is the largest trade organization in the world. NAR promotes ethics and education in the real estate industry.

As a condition of selling a property, a seller may require a buyer using a federally related mortgage to buy title insurance from a particular company.

The statement is FALSE. The Real Estate Settlement Procedures Act prohibits sellers from requiring buyers purchase title insurance from a particular company.

In the case of a contract, obligation, or liability based on a written instrument, the Statute of Limitations designates that the terms of a written contract may be enforced for a period of ten years.

The statement is FALSE. The Statute of Limitations designates that the terms of a written contract may be enforced for a period of five years.

Borrowers are charged a mortgage insurance premium for a VA loan.

The statement is FALSE. The VA does not charge a mortgage insurance premium; however, the borrower is charged a funding fee or user's fee to help the government defray the cost of foreclosures.

The VA uses a total monthly obligations ratio of 39 percent to qualify loan applicants.

The statement is FALSE. The VA uses a total monthly obligations ratio of 41 percent to qualify loan applicants.

The discount rate is another term for mortgage points.

The statement is FALSE. The discount rate is the interest rate charged member banks for borrowing from the Federal Reserve Bank.

The formula for determining present value is Net Operating Income × Capitalization Rate.

The statement is FALSE. The formula for determining present value is Net Operating Income divided by the Capitalization Rate.

The four characteristics of value are demand, price, scarcity, and transferability.

The statement is FALSE. The four characteristics of value are demand, utility, scarcity, and transferability. These characteristics can be remembered by the acronym DUST.

The high-pressure plumbing system carries wastewater away from the home.

The statement is FALSE. The high-pressure system delivers potable water (suitable for drinking) to the various parts of a home, and the low-pressure system carries wastewater away from the home.

Chronological age is used in the lump-sum age-life method of calculating accrued depreciation.

The statement is FALSE. The lump-sum age-life method is based on a ratio of a property's effective age to its economic life. Effective age is the age indicated by a structure's condition and utility.

The metes-and-bounds description is the LEAST accurate of the three types of legal descriptions.

The statement is FALSE. The metes-and-bounds description is the most accurate method of land description.

A person who gives or delegates authority to another is referred to as the agent, while the person who accepts the authority is referred to as the principal.

The statement is FALSE. The opposite is true: a person who gives or delegates authority to another is referred to as the principal; the person who accepts the authority is referred to as the agent.

In a mortgage, the mortgagor owns the mortgage, while the mortgagee owns the property.

The statement is FALSE. The opposite is true: the mortgagor owns the property, while the mortgagee owns the mortgage.

Title insurance will NOT protect an owner's heirs.

The statement is FALSE. The owner's title insurance policy helps to protect a new owner (and the owner's heirs) from title defects.

The charges associated with the preparation of the deed are usually paid by the mortgagor.

The statement is FALSE. The seller (grantor) typically pays for preparation of the deed, and the buyer (mortgagor) typically pays for preparation of the mortgage and note. However, who pays for the various expenses is negotiable.

The spouse of a judgment debtor is qualified to make a claim from the Real Estate Recovery Fund.

The statement is FALSE. The spouse of a judgment debtor is not qualified to make a claim for recovery from the fund.

The federal government's survey system uses certain north-south longitudes as base lines and certain east-west latitudes as principal meridians.

The statement is FALSE. The survey system uses certain north-south longitudes as principal meridians and certain east-west latitudes as baselines.

The state tax rate on notes is $.35 per $500, or fraction thereof, on the face value of the promissory note.

The statement is FALSE. The tax rate on notes is $.35 per $100, or fraction thereof, on the face value of the promissory note.

The township north of T2S, R3E is T1S, R2E.

The statement is FALSE. The township north of T2S, R3E is T1S, R3E. The row of townships due north of T2S is T1S. The range number does not change when moving north and south.

The office sign at the entrance of the brokerage business must display the brokerage street address.

The statement is FALSE. There is no requirement to include the brokerage office street address on the entrance sign. The office sign must contain the broker's name, trade name (if one is used), and the words "Licensed Real Estate Broker" or "Lic. Real Estate Broker."

To prorate means to subtract various seller charges from buyer credits.

The statement is FALSE. To prorate means to divide various charges and credits between buyer and seller. Prorating is usually required when rents are paid in advance; property taxes are paid in arrears (that is, at the end of the period for which payment is due); and interest on mortgages is paid in arrears (the usual practice).

Valuable consideration is a promise that cannot be measured in terms of money, such as love and affection.

The statement is FALSE. Valuable consideration is money or a promise of something that can be measured in terms of money.

A licensee who violates the federal telephone solicitation law may be fined up to $10,000 per call.

The statement is FALSE. Violators of the federal Telephone Consumer Protection Act may be fined up to $11,000 for each illegal call.

When the Fed decides to sell securities through open-market bulk trading, the supply of money in circulation increases.

The statement is FALSE. When the Fed decides to sell securities through openmarket bulk trading, all funds received are held by the FRS. This reduces the supply of money in circulation, which in turn causes a drop in loanable funds and causes interest rates to rise.

If two brokers split the 6 percent commission 50-50 on a property that sold for $150,000, each broker should receive $4,500.

The statement is TRUE. $150,000 × .06 = $9,000. $9,000 × .50 = $4,500.

The parcel described as NE¼, SW¼, NW¼ contains 10 acres.

The statement is TRUE. 640 ÷ 4 ÷ 4 ÷ 4 =10.

In the event of disputed funds, a broker may request that the Florida Real Estate Commission issue an escrow disbursement order (EDO).

The statement is TRUE. A broker may request that the Commission issue an EDO to determine who is entitled to the disputed funds. However, the Commission may choose not to issue an EDO, forcing the broker to choose from one of the other settlement procedures: mediation, arbitration, or litigation.

A corner lot is bounded with streets on two sides.

The statement is TRUE. A corner lot is bounded with two intersecting streets.

A deed in lieu of foreclosure is sometimes referred to as a friendly foreclosure.

The statement is TRUE. A deed in lieu of foreclosure is sometimes referred to as a friendly foreclosure because it is a nonjudicial procedure.

When a real estate broker accepts employment as a single agent of the buyer or the seller, the broker enters into a fiduciary relationship.

The statement is TRUE. A fiduciary is defined as a broker in a relationship of trust and confidence between the broker as agent and the seller or a buyer as principal. Note that a sales associate or broker associate owes the same fiduciary obligations to the principal as does the broker.

A joint tenancy features right of survivorship.

The statement is TRUE. A joint tenancy is characterized by the right of survivorship. Right of survivorship means that when one co-owner dies, the co-owner's share goes to the surviving co-owner(s) and not to the deceased tenant's heirs.

A licensee who receives a notice of noncompliance for a minor violation must take action to correct the violation within 15 days.

The statement is TRUE. A licensee has 15 days to take action to correct a violation stipulated in a notice of noncompliance. Failure to take corrective action may result in a fine or other disciplinary penalties.

The scope of a property manager's functions encompasses more than just rent collection, maintenance, and repair.

The statement is TRUE. A property manager must strive to produce the greatest possible net income over the longest possible time. In doing so, the property manager often needs to develop plans for modernization, remodeling, or alteration of existing properties. Property managers also are responsible for improving tenant relations, as well as for advertising and merchandising.

A single agent is defined as a broker who represents, as a fiduciary, the buyer or seller but NOT both in the same transaction.

The statement is TRUE. A single agent is a broker who represents, as a fiduciary, the buyer or seller but not both in the same transaction.

Most violations of Florida Statue 475 are legally misdemeanors of the second degree.

The statement is TRUE. A violation of Florida Statue 475 is a misdemeanor of the second degree. A second degree misdemeanor is punishable by a fine of up to $500 and/or by a jail sentence of not more than 60 days. There is one violation of real estate license law that is a first-degree misdemeanor; failing to provide accurate and current rental information for a fee.

Absentee owners can be defined as property owners who do NOT reside on the property and who rely on property managers to supervise the investment.

The statement is TRUE. Absentee owners are property owners who do not reside on the property and who usually rely on property managers to supervise the investment.

After completing the post-licensing education requirement during the initial license period, active and inactive licensees must complete at least 14 hours of continuing education during every two-year license period.

The statement is TRUE. Active and inactive licensees must complete at least 14 hours of continuing education during every two-year license period after completing post-licensing education during the initial license period.

All active Florida real estate brokers are required to have an office.

The statement is TRUE. Active real estate brokers are required to have an office. Additionally, the office must be registered with the Department of Business and Professional Regulation.

The Code of Ethics adopted by the National Association of REALTORS® emphasizes fair dealings in three major areas: (1) with clients, (2) with other real estate brokers, and (3) with the general public.

The statement is TRUE. Adopted in 1913, the Code of Ethics emphasizes fair dealings with clients, with other real estate brokers, and with the general public.

Federally chartered SAs are required to be members of their district Federal Home Loan Bank.

The statement is TRUE. All federally chartered savings associations are required to be members of their district FHLB. While membership is optional for state-chartered savings associations, mutual savings banks, and insurance companies, many that meet federal standards and can qualify elect to join because only member institutions are allowed to borrow from their district FHLB for up to one year without collateral.

A transfer of title occurs at title closing, when the seller delivers title to the buyer in exchange for the purchase price.

The statement is TRUE. All real property sales or exchanges eventually conclude with a transfer of title. This occurs at what is called the title closing, when the seller delivers title to the buyer in exchange for the purchase price.

An abstract of title is an official summary of documents filed in the public records that affect, or may affect, title of a given tract or parcel.

The statement is TRUE. An abstract of title informs the reader or title examiner of the chain of title.

An acre equals 43,560 square feet.

The statement is TRUE. An acre equals 43,560 square feet—approximately 208.71 feet × 208.71 feet.

A licensee's initial license is issued so that it will expire on the nearest six months' renewal date short of two years.

The statement is TRUE. An initial license is issued so that it will expire on the nearest six months' renewal date short of two years. March 31 and September 30 are the license termination dates.

After completing the required real estate education and passing the license exam, applicants are initially licensed as inactive sales associates.

The statement is TRUE. Applicants are initially licensed as inactive sales associates. A licensee attains active status by finding an employer and filing the information with the Department of Business and Professional Regulation.

If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser.

The statement is TRUE. Appraisal reports involving a federally related transaction must be prepared by a state-certified or licensed appraiser, unless the real estate licensee also holds such certification or license. Federally related transactions include the sale, lease, purchase, exchange, investment, refinancing, or other use of real estate as security for a loan that has a transaction value greater than $250,000.

Appraisers are paid a fee, NOT a commission.

The statement is TRUE. Appraisers are paid a fee rather than a commission in order to reduce the likelihood of a conflict of interest.

Lenders are required to give borrowers a HUD information booklet concerning closing costs at the time or loan application or within three business days.

The statement is TRUE. As part of consumer protection under RESPA, lenders are required to give all prospective borrowers a current copy of a special HUD information booklet at the time of loan application or within three business days.

With balloon frame construction the studs extend continuously to the ceiling of the second floor, providing a smooth unbroken wall surface at each floor level.

The statement is TRUE. Balloon construction was common until the 1930s, but it is still used today for some two-story construction, especially if the structure has a masonry exterior. With this type of construction the studs extend continuously to the ceiling of the second floor, providing a smooth unbroken wall surface at each floor level.

Land developers are NOT permitted to sell or lease lots in subdivisions of 100 or more lots unless they have registered the subdivision with the U.S. Department of Housing and Urban Development (HUD).

The statement is TRUE. Before selling or leasing lots in subdivisions of 100 or more lots, developers first need to register the subdivision with HUD.

Casement windows can be opened up completely, providing maximum ventilation.

The statement is TRUE. Casement windows consist of one or more sashes hinged at the side like a door, swinging horizontally out or in, usually with the aid of a crank. This window can be opened up completely, providing maximum ventilation; however, it needs to be located away from traffic areas such as sidewalks.

According to Chapter 475, F.S., the definition of residential real estate includes up to four residential units.

The statement is TRUE. Chapter 475, F.S., defines residential real estate as four or fewer residential units, vacant land zoned for four or fewer residential units, or agricultural property of ten or fewer acres.

Developers of condominium projects with 20 or more units must give prospective purchasers a copy of the prospectus.

The statement is TRUE. Developers of 20 or more new residential condominium units must prepare a prospectus. A copy of the prospectus must be given to prospective purchasers. The prospectus summarizes the major points detailed in the condominium documents.

Each discount point paid to the lender will increase the lender's yield (return) by approximately 1/8 of 1 percent.

The statement is TRUE. Discount points increase the actual yield from a mortgage without showing an increase in the interest rate on the mortgage. As a general rule of thumb, each discount point paid to the lender will increase the lender's yield (return) by approximately 1/8 of 1 percent (.00125).

A dormer is a projection that extends out of the roof to provide additional light and ventilation.

The statement is TRUE. Dormers are incorporated into gable and hip roofs to provide additional light and ventilation.

Dual agency exists when a real estate broker represents both parties in a transaction in a fiduciary capacity.

The statement is TRUE. Dual agency can lead to a conflict of interest. Such being the case, dual agency was revoked in the state of Florida in 1997.

The cost of 5 discount points on a $100,000 loan is $5,000.

The statement is TRUE. Each discount point is equal to 1 percent of the loan amount. Five discount points is equal to five percent of $100,000 or $5,000.

Examinees who qualify under mutual recognition must pass a Florida-specific real estate law examination consisting of 40 questions.

The statement is TRUE. Each licensee who applies for Florida licensure from a state that has a current mutual recognition agreement with Florida must pass, with a grade of at least 75 percent, a Florida-specific real estate law examination consisting of 40 questions worth 1 point each.

FHA mortgages typically have a higher loan-to-value (LTV) ratio compared with conventional mortgages.

The statement is TRUE. FHA mortgages require as little as 3.5 percent down payment. Therefore, an FHA mortgage loan requires a smaller down payment or a higher load-to-value ration (LTV) compared with conventional mortgage loans.

Fannie Mae does NOT make loans directly to consumers; rather, Fannie Mae purchases loans for its own portfolio.

The statement is TRUE. Fannie Mae (formerly called the Federal National Mortgage Association or FNMA) was established by Congress in 1938 for the purpose of creating a secondary market for mortgage loans. It is authorized to either purchase loans for its own portfolio or underwrite loans.

A post office box is considered to be an acceptable mailing address for license purposes.

The statement is TRUE. Florida License Law mandates that a post office box is an acceptable mailing address.

After discussion with the broker, a real estate licensee offers to share part of the commission with the buyer. The arrangement is disclosed to all interested parties. This is an example of a legal kickback or rebate.

The statement is TRUE. Florida law allows a real estate licensee to share part of the commission with the buyer or seller in a real estate transaction, provided the rebate is disclosed to all interested parties. Sharing a portion of the commission with a party to the transaction is an example of a legal kickback or rebate

Florida statute requires mortgagees to send the recorded satisfaction to mortgagors within 60 days.

The statement is TRUE. Florida statute requires that the mortgagee send the recorded satisfaction to the mortgagor within 60 days.

If a comparable property is superior to the subject property with regard to size, a downward adjustment is made to the sale price of the comparable.

The statement is TRUE. If a comparable property is superior on a given feature, a downward adjustment is made to the comparable property. To remember: Comp Better = Subtract (CBS).

If an applicant does NOT pass the state sales associate license exam within two years of completing the 63-hour sales associate prelicense course, the applicant must repeat the course.

The statement is TRUE. If an applicant does not pass the state license exam within two years of the course completion date, the course completion expires and the applicant must again complete the prelicense education course.

A mortgage lien is a voluntary lien against real property that pledges the property as security for the debt.

The statement is TRUE. If the borrower (mortgagor) defaults, the lender (mortgagee) can proceed to force sale of the property to satisfy the debt.

Adverse possession arises when the true owner of record fails to maintain possession and the property is seized by another.

The statement is TRUE. If the true owner of record "sleeps on his rights" and does not use the legal means available to remove a hostile trespasser, the owner will lose the right to the property after a period of time.

The covenant of quiet enjoyment is found in a general warranty deed.

The statement is TRUE. In addition to the covenant of seisin and the covenant against encumbrances, the general warranty deed contains three unique covenants: (1) quiet enjoyment; (2) further assurance; and (3) warranty forever.

In platform construction, the wall framing is assembled on the concrete slab and then hoisted into place and anchored.

The statement is TRUE. In platform construction, the wall framing is assembled on the concrete slab and then hoisted into place and anchored. If the house has more than one story, additional layers of floor platforms and walls are stacked on top of the first floor walls. The structure is completed with ceiling and roof framing.

Each section in a township contains 640 acres within its boundaries.

The statement is TRUE. It is important to remember the exact number of acres in a section because the 640 value is used for many purposes.

Items credited to the buyer include the earnest money deposit.

The statement is TRUE. Items credited to the buyer include the earnest money deposit, assumed mortgages, newly created mortgages, prorated property taxes (city and county), prorated unpaid interest, prorated advance rent, and security deposits.

Examples of moral turpitude include embezzlement and crimes of larceny.

The statement is TRUE. Moral turpitude is defined as a vile act; conduct contrary to honesty, good morals, justice, or accepted custom. Embezzlement and crimes of larceny fall under this definition.

In a tenancy by the entireties, an individual's ownership interest automatically transfers to the surviving spouse by right of survivorship.

The statement is TRUE. Neither the husband nor the wife may will any portion of the spousal interest in an estate by the entireties.

The right of exclusion recognizes that an owner is considered to have the right to control entry onto the owner's land without interference and to collect damages for certain forms of trespass.

The statement is TRUE. Other parties must have permission to enter the land of an owner with this right.

The maximum payment from the recovery fund for claims based on judgments against a licensed real estate broker may not exceed $150,000.

The statement is TRUE. Payment for claims based on judgments against one broker or sales associate may not exceed, in total, $150,000.

Religious organizations may restrict dwelling units they own or operate to members of their religion.

The statement is TRUE. Religious organizations may restrict dwelling units they own or operate to members of their religion provided the organization does not otherwise discriminate in accepting its membership.

Subdividing is the process of converting parcels of land into smaller units or lots, while development is the process of improving raw land so that it can be put to productive use.

The statement is TRUE. Subdividing involves converting parcels of land into smaller units or lots, and development involves improving raw land so that it can be put to productive use.

The 365-day method calculates the proration using the actual number of days in the proration period and is more accurate than the statutory month method.

The statement is TRUE. The 365-day method calculates the proration using the actual number of days in the proration period. To use this method, first divide 365 into the annual cost of the item to find the exact daily rate, then multiply the number of days involved by the daily rate.

The Americans with Disabilities Act (ADA) of 1990 requires that multifamily dwellings be designed and constructed so that the public and common-use portions of the dwellings are readily accessible to and usable by all persons with disabilities.

The statement is TRUE. The ADA is a federal statute designed to remove barriers that prevent qualified individuals with disabilities from enjoying the same employment opportunities that are available to persons without disabilities. The act prohibits discrimination in places of public accommodations and in commercial facilities.

Members of the Florida Real Estate Commission determine and issue the final order in each disciplinary case.

The statement is TRUE. The Commission (except for the members who served of Probable Cause) determine and issue the final order in each disciplinary case. The Commission members may accept, reject, or modify the conclusions of law and the interpretation of administrative rules in the administrative law judge's recommended order.

The Florida Real Estate Commission's duty to create and pass real estate rules and regulations is the exercise of quasi-legislative power.

The statement is TRUE. The Commission exercises its quasi-legislative power when it enacts rules and regulations that enforce the Florida statutory license law.

Alienation is the act of transferring ownership, title, or an interest in real property from one person to another.

The statement is TRUE. The alienation may be voluntary (with the owner's control and consent) or involuntary (without control and consent of the owner).

The amount that Federal Reserve member banks are required to keep on deposit is the reserve requirement.

The statement is TRUE. The amount that member banks are required to keep on deposit is the reserve requirement. Raising or lowering this reserve requirement is one of three primary methods used by the Fed to control the supply of money in circulation and thereby balance the economy.

The open-end clause permits the borrower to increase the loan amount as long as the total debt does NOT exceed the original amount of the loan.

The statement is TRUE. The borrower may increase the loan amount under the open-end clause, but only if the total debt does not exceed the original amount of the loan.

The bylaws of the condominium association include procedures for calling meetings and determining voting requirements.

The statement is TRUE. The bylaws describe the operational requirements of the association and provide for the administration of the association, including procedures for calling meetings and determining voting requirements.

The three general categories of residential construction include speculative, custom, and tract.

The statement is TRUE. The categories are speculative (purchasing one or more lots and constructing homes without first securing buyers), custom (constructing a home under contract with a buyer, using plans provided by architect or buyer), and tract (buyer selects a floor plan from a group of several model homes).

In the cost-depreciation approach, the maximum value of a property can be measured by determining the cost to acquire an equivalent site and to reproduce a structure as if new, and then subtracting accrued depreciation.

The statement is TRUE. The cost-depreciation approach is based on the theory that a knowledgeable purchaser will pay no more for a property than the cost of acquiring a similar site and constructing an acceptable substitute structure. The maximum value of a property can be measured by determining the cost to acquire an equivalent site and to reproduce a structure as if new, and then subtracting accrued depreciation.

The definition of market value assumes that the terms of sale are in cash in U.S. dollars or in comparable financial arrangements.

The statement is TRUE. The definition of market value assumes that (1) market value applies to a specified date and may change with the passage of time; (2) the seller is able to convey a marketable title; (3) buyer and seller are typically motivated, and neither buyer nor seller is under any compulsion or pressure to conclude a sale;(4) both buyer and seller are well informed and acting in their individual best interest;(5) the property is exposed for sale on the open market for a reasonable time; (6) the terms of sale are in cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (7) the price represents a normal consideration for the property, unaffected by creative financing or sales concessions such as seller contributions or buydowns.

Any applicant for licensure who has received a four-year degree in real estate from an accredited institution of higher education is exempt from the Commission-prescribed education prerequisite to become initially licensed.

The statement is TRUE. The education prerequisite is waived for individuals who have received a four-year degree in real estate from an accredited institution.

Regarding the parties in a contract, novation is the substitution of a new party for the original one.

The statement is TRUE. The effect of novation is to discharge the original party from the obligation.

The MOST common type of legal description used for single-family dwellings located in developed subdivisions is the lot and block method.

The statement is TRUE. The lot and block method can be used only where plat maps have been recorded in the public records.

The higher the R-value, the better the energy efficiency.

The statement is TRUE. The measure of the effectiveness of insulation is its resistance to heat flow, or R-value. The higher the R-value, the better the energy efficiency.

Fixed-rate amortized mortgages usually call for regular, equal payments that include both interest payments and payments on the unpaid balance of the debt.

The statement is TRUE. The monthly payment amount is fixed although the amount of the payment allocated to principal increases and interest gradually decreases as the loan balance is paid down.

A proprietary real estate school may guarantee employment of a student or prospective student on the basis of training to be provided so long as the school offers the student a bona fide employment contract.

The statement is TRUE. The school may guarantee employment, but only if it also offers the student a bona fide employment contract.

Ducted systems include two sets of ducts: supply air ducts and return ducts.

The statement is TRUE. The supply air ducts carry the hot air from the furnace to the distribution registers throughout the house. The return air intake collects the cooled air through return ducts to a filter located in the furnace, where it is reheated and recycled throughout the home.

Prepaid rent is entered on the closing statement as a debit to the seller and as a credit to the buyer.

The statement is TRUE. The unused portion of the advance rent belongs to the buyer and so the buyer is credited the unused portion of the rent. The seller is debited the unused portion. Prorations are double entries (a debit to one party and a credit to the other). The dollar value of the debit and the credit are the same.

One exception to the Statute of Frauds concerns when an oral contract has been formed and the buyer has paid a part of the purchase price and then has either taken possession of the property or made some improvements to the property.

The statement is TRUE. There is one other exception to the Statute of Frauds: when both parties have fully performed as promised, in which case the resulting legal relationships are precisely the same as those that would have existed had the contract been in writing.

Mutual assent refers to the making and acceptance of an offer.

The statement is TRUE. There must have been a meeting of the minds between parties, meaning they must reach an agreement on all terms in the contract.

At the time of application for a loan or within three business days thereafter, the lender is required to provide the borrower with a good-faith estimate of probable closing costs related to those items for which information is available from past experience or from knowledge of current costs.

The statement is TRUE. This good-faith estimate is required under the Real Estate Settlement Procedures Act of 1974. Generally, the estimate includes costs for loan closing service fees, recording fees, attorney's fees, title search fees, and title insurance fees.

The constitutions of the federal government and state governments grant the power to take private property for a public use.

The statement is TRUE. This power is known as eminent domain.

All earnest money sale deposits must be placed immediately in an escrow account and cannot be intermingled or commingled with the broker's personal or operating funds.

The statement is TRUE. To commingle funds is the illegal practice of mixing a buyer's or seller's funds with the broker's own money or of mixing escrow money with the broker's personal funds or business funds.

Under the survey system, township lines are drawn every 6 miles north and south of a base line.

The statement is TRUE. Township lines are drawn every 6 miles north and south of a base line.

U.S. citizenship is NOT required to become licensed in Florida.

The statement is TRUE. U.S. citizenship is not required to become licensed in Florida. However, applicants are required to indicate a social security number on the application.

Brokers and sales associates should NOT prepare deeds, mortgages, or promissory notes.

The statement is TRUE. Unless they are also attorneys, brokers and sales associates who prepare such legal documents could jeopardize their real estate licenses.

A broker must first obtain a current opinion from an attorney before quoting an opinion that title to a property is good or marketable.

The statement is TRUE. When questions of title arise, brokers are required to advise prospective buyers to have their attorney examine the abstract or to obtain a title insurance policy.

An implied contract is one in which some or all of the obligations or conditions of a contract are NOT stated expressly.

The statement is TRUE. With an implied contract, the obligations or conditions of the contract may be reasonably implied by the acts of the parties or by the nature of the transaction.

Under the statute of frauds, which element is required for contracts pertaining to the purchase and sale of real property (except for certain specific exceptions)?

The statute of frauds requires that contracts conveying an interest in real property and contracts that aren't to be performed within one year of the date created must be in writing and signed to be enforceable. Includes: PSA Option Contracts Deeds and Mortgage Instruments Lease Agreements longer than 1 year Listing Agreements for a term longer than 1 year

A prospective tenant purchased rental information from a real estate brokerage company for $75. What recourse is available to the prospective tenant who purchased the information and found that much of the rental information was out-of-date? -The tenant should file a claim in small claims court for damages -The tenant should demand a refund of $50 of the fee paid -The tenant should demand within 20 days a refund of $75 -Th tenant should request that the DBPR conduct an audit of the brokerage company

The tenant should demand within 30 days a refund of $75. If the information provided to a prospective tenant is not current or is inaccurate in any material respect, the broker must pay the full fee to the prospective tenant on demand if the claim is made within 30 days from the contract date.

Report the deadline for the following: Brokers must deposit escrow funds by the end of the...

Third business day

If an adult enters into a contract with a child:

This contract can be enforced in court by the child

If a real estate broker advertises a house for $500 down payment:

This is a trigger word and requires the advertising of other things in that ad for real estate

A broker does not disclose a material fact to his customer:

This is concealment

A sales associate received an earnest money deposit on Monday. The sales associate gave the check to his broker on Tuesday. By the end of business on which day must the check be deposited into the escrow account? Wednesday, Thursday, Friday, Monday

Thursday. The broker has unit the end of the third business day (Thursday) to deposit the funds. The three business-day time period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker. In this case, the first day of the three-business-day period is Tuesday.

The borrower retains equitable title in which mortgage theory? -Lien -Title -Mortgage -Satisfaction

Title. In title theory states, the borrower retains equitable title to the property. Once the debt is paid in full, the lender conveys legal title to the borrower.

All of the following are reasons for appraising a business and its assets EXCEPT... -to obtain financing. -when a governmental unit intends to exercise its power of eminent domain over a business location. -when a business has been destroyed by known or unknown causes. -to ensure compliance with all pertinent state and federal securities laws.

To ensure compliance with all pertinent state and federal securities laws. Reasons for valuation of businesses include: to obtaining financing; eminent domain proceedings; and destruction of the real property associated with a business.

What is commingling?

To mix the money or other personal property of a buyer or seller with a broker's own money or property

A couple tours several model homes in a new subdivision. The couple decides to purchase one of the available lots and have the builder construct one of the model floor plans on the lot. Which type of construction is this? Contract home, Tract home, Custom home, Modular home?

Tract home. Tract homes are a type of speculative building. A new subdivision will typically feature several model homes. Buyers select a floor plan from the models and a lot on which to have a home construction in the new subdivision.

Determine whether each of the following duties applies to a transaction broker relationship, single agent relationship, or both. -Use skill, care, diligence -Present all offers and counteroffers -Perform additional duties that are mutually agreed to -Exercise limited confidentiality -Full disclosure -Confidentiality

Transaction - Perform additional duties that are mutually agreed to, exercise limited confidentiality Single Agent - Confidentiality, Full disclosure Both - Use skill, care, and diligence, Present all offers and counteroffers

A couple are interested in purchasing residential investment property, and they have informed their sales associate that they want limited representation but do not want to be legally held responsible for the acts of a licensee. Which brokerage relationship is BEST suited to this couple?

Transaction Broker - in a transaction broker relationship the buyer or seller is not responsible for the acts of a licensee

In Florida, which type of brokerage relationship is presumed? Single agent, Transaction broker, No brokerage, General

Transaction broker. Under Florida law, it is presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established.

Which brokerage disclosure notice must be signed or initialed by the buyer or seller before implementation? -Single agent -No brokerage relationship -Transition to transaction broker -Al of the brokerage disclosure notices must be signed or initialed before implementation

Transition to transaction broker. A single agent relationship may be changed to a transaction broker relationship (or another relationship), provided the agent first obtains the principal's written consent to the change in relationship. The buyer or seller (or both) must either sign or initial the consent to transition to transaction broker notice.

Under your sink and bathtub is a:

Trap

A mortgage lien is a voluntary lien against real property that pledges the property as security for the debt. True or False?

True.

A post office box is considered to be an acceptable mailing address for license purposes. True or False?

True.

A single agent is defined as a broker who represents, as a fiduciary, the buyer or seller but NOT both in the same transaction. True or False?

True.

Absentee owners can be defined as property owners who do NOT reside on the property and who rely on property managers to supervise the investment. True or False?

True.

After completing the post-licensing education requirement during the initial license period, active and inactive licensees must complete at lease 14 hours of continuing education during every two-year license period. True or False?

True.

Any applicant for licensure who has received a four-year degree in real estate from an accredited institution of higher education is exempt from the Commission-prescribed education prerequisite to become initially licensed. True or False?

True.

If an applicant does NOT pass the state license sales associate exam within two years of completing the 63-hour sales associate pre-license course, the applicant must repeat the course. True or False?

True.

Subdividing is the process of converting parcels of land into smaller units or lots, while development is the process of improving raw land so that it can be put to productive use. True or False?

True.

If two brokers split the 6 percent commission 50-50 on a property that sold for $150,000, each broker should receive $4,500. True or False?

True. $150,000 x .06 = $9,000. $9,000 x .50 = $4,500.

The parcel described as NE1/4, SW1/4, NW1/4 contains 10 acres. True or False?

True. 640 ÷ 4 ÷ 4 ÷ 4 = 10.

In the event of disputed funds, a broker may request that the Florida Real Estate Commission issue an escrow disbursement order (EDO). True or False?

True. A broker may request that the Commission issue an EDO to determine who is entitled to the disputed funds. However, the Commission may choose not to issue an EDO, forcing the broker to choose from one of the other settlement procedures: mediation, arbitration, or litigation.

A strip of park-like green space can be a buffer zone. True or False?

True. A buffer zone is a strip of land separating a higher density land use from a lower density land use.

A corner lot is bounded with streets on two sides. True or False?

True. A corner lot is bounded with two intersecting streets.

A deed in lieu of foreclosure is sometimes referred to as a friendly foreclosure. True or False?

True. A deed in lieu of foreclosure is sometimes referred to as a friendly foreclosure because it is a nonjudicial procedure.

When a real estate broker accepts employment as a single agent of the buyer or the seller, the broker enters into a fiduciary relationship. True or False?

True. A fiduciary is defined as a broker in a relationship of trust and confidence between the broker as agent and the seller or a buyer as principal. Note that a sales associate or broker associate owes the same fiduciary obligations to the principal as does the broker.

A joint tenancy features right of survivorship. True or False?

True. A joint tenancy is characterized by the right of survivorship. Right of survivorship means that when one co-owner dies, the co-owner's share goes to the surviving co-owner(s) and not to the deceased tenant's heirs.

A licensee who receives a notice of noncompliance for a minor violation must take action to correct the violation within 15 days. True or False?

True. A licensee has 15 days to take action to correct a violation stipulated in a notice of non compliance. Failure to take corrective action may result in a fine or other disciplinary penalties.

One mill can be written as .001. True or False?

True. A mill is one one-thousandth of a dollar (or one-tenth of a cent). There are 1,000 mills in a dollar.

The scope of a property manager's function encompasses more than jut rent collection, maintenance, and repair. True or False?

True. A property manager must strive to produce the greatest possible net income over the longest possible time. In doing so, the property manger often needs to develop plans for modernization, remodeling, or alteration of existing properties. Property managers also are responsible for improving tenant relations, as well as for advertising and merchandising.

A variance allows a property owner to vary from struct compliance with all or part of a zoning code. True or False?

True. A variance allows a property owner to vary from strict compliance with all or part of a zoning code because to comply would force an undue hardship on the property owner.

Most violations of Florida Statute 475 are legally misdemeanors of the second degree. True or False?

True. A violation of Florida Statute 475 is a misdemeanor of the second degree. A second degree misdemeanor is punishable by a fine of up to $500 and/or by jail sentence of not more than 60 days. There is one violation of real estate license law that is a first-degree misdemeanor; failing to provide accurate and current rental information for a fee.

All active Florida real estate brokers are required to have an office. True or False?

True. Active real estate brokers are required to have an office. Additionally, the office must be registered with the Department of Business and Professional Regulation.

The Code of Ethics adopted by the National Associate of REALTORS emphasizes fair dealings in three major areas: (1) with clients, (2) with other real estate brokers, and (3) with the general public. True or False?

True. Adopted in 1913, the Code of Ethics emphasizes fair dealings with clients, with other real estate brokers, and the general public.

A final certificate of occupancy is issued only after all of the building inspectors agree that the structure conforms to code and all associated fees have been paid. True or False?

True. After all of the building inspectors agree that the structure conforms to code and all associated fees have been paid, a final certificate of occupancy is issued.

Federally chartered SAs are required to be members of their district Federal Home Loan Bank. True or False?

True. All federally chartered savings associations are required to be members of their district FHLB. While membership is optional for state-chartered savings associations, mutual savings banks, and insurance companies, many that meet federal standard and can qualify elect to join because only member institutions are allowed to borrow from their district FHLB for up to one year without collateral.

A transfer of title occurs at title closing, when the seller delivers the title to the buyer in exchange for the purchase price. True or False?

True. All real property sales or exchanges eventually conclude with a transfer of title. This occurs at what is called the title closing, when the seller delivers title to the buyer in exchange for the purchase price.

An abstract of title is a official summary of documents filed in the public records that affect, or may affect, title of a given tract or parcel. True or False?

True. An abstract of title informs the reader or title examiner of the chain of title.

An acre equals 43,560 square feet. True or False?

True. An acre equals 43,560 square feet - approximately 208.71 x 208.71 feet.

Developers of large new building projects that affect more than one county must prepare an environmental impact statement. True or False?

True. An environmental impact statement (EIS) is a description of the probably cost-benefit impact that a proposed large development project will have on the environment. Large projects are required to submit an EIS, usually to a regional planning agency.

A licensee's initial license is issued so that it will expire on the nearest six months' renewal fate short of two years. True or False?

True. An initial is issued so that it will expire on the nearest six months' renewal date short of two years. March 31 and September 30 are the license termination date.

Real estate investment analysis can be defined as the process of determining the extent to which real estate investments will achieve an investor's objectives. True or False?

True. An investment is the outlay of an investor's money in anticipation of income or profit. Real estate investment analysis is the process of determining the extent to which real estate investments will achieve an investor's objectives.

One of the requirements for establishing a homestead tax exemption is that the owner must have held title to the property as of January 1 of the year of application. True or False?

True. Another requirement is that a recorded deed, recorded contract for deed, or property tax bill must be presented in the homeowner's name, plus two forms of identification.

After completing the required real estate education and passing the license exam, applicants are initially licensed as inactive sales associated. True or False?

True. Applicants are initially licensed as inactive sales associates. A licensee attains active status y finding an employer and filing the information with the Department of Business and Professional Regulation.

If a appraisal repot involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. True or False?

True. Appraisal reports involving a federally related transaction must be prepared by a state-certified or licensed appraiser, unless the real estate licensee also holds such certification or license. Federally related transactions include the sale, lease, purchase, exchange, investment, refinancing, or other use of real estate as security for a loan that has a transaction value greater than $250,000/

Appraisers are paid a fee, NOT a commission.

True. Appraisers are paid a fee rather than a commission in order to reduce the likelihood of a conflict of interest.

Lenders are required to give borrowers a HUD information booklet concerning closing costs at the time of loan application within three business days. True or False?

True. As part of consumer protection under RESPA, lenders are required to give all prospective borrowers a current copy of a special HUD information booklet at the time of loan application or within three business days.

With balloon frame construction the studs extend continuously to the ceiling of the second floor, providing a smooth unbroken wall surface at each floor level. True or False?

True. Balloon construction was common until the 1930s, but it is still used today for some two-story construction, especially if the structure has a masonry exterior. With this type of construction the studs extend continuously to the ceiling of the second floor, providing a smooth unbroken wall surface at each floor level.

Land developers are NOT permitted to sell or lease lots in subdivisions of 100 or more lots unless they have registered the subdivision with the U.S. Department of Housing and Urban Development (HUD). True or False?

True. Before selling or leasing lots in subdivisions of 100 or more lots, developers first need to register the subdivision with the HUD.

One of the ways business brokerage is different from real estate brokerage is that business brokerage transactions frequently involve the assumption by the purchaser of short-term liabilities. True or False?

True. Business brokerage is different from real estate brokerage in five ways: (1) business brokerage usually involves assets other than real estate, such as personal property and good will, (2) the value of an established business may differ from the value of the real estate, (3) unlike real estate, the value of a business may be allocated among shares of corporate stock, (4) business brokerage transactions frequently involve the assumption by purchaser of short-term liabilities, and (5) the real estate market is local in nature.

Casement windows can be opened up completely, providing maximum ventilation. True or False?

True. Casement windows consist of one or more sashes hinged at the side like a door, swinging horizontally out or in, usually with the aid of a crank. The window can be opened up completely, providing maximum ventilation; however, it needs to be located away from traffic areas such as sidewalks.

According to Chapter 475, F.S., the definition of residential real estate includes up to four residential units. True or False?

True. Chapter 475, F.S., defines residential real estate as four or fewer residential units, vacant land zoned for four or fewer residential units, or agricultural property of ten or fewer acres.

Developers of condominium projects with 20 or more units must give prospective purchasers a copy of the prospectus. True or False?

True. Developers of 20 or more new residential condominium units must prepare a prospectus. A copy of the prospectus must be given to prospective purchasers. The prospectus summarizes the major points detailed in the condominium documents.

Each discount point paid to the lender will increase the lender's yield (return) by approximately 1/8 of 1 percent. True or False?

True. Discount points increase the actual yield from a mortgage without showing an increase in the interest rate on the mortgage. As a general rule of thumb, each discount point paid to the lender will increase the lender's yield (return) by approximately 1/8 of 1 percent (.00125).

A dormer is a projection that extends out of the roof to provide additional light and ventilation. True or False?

True. Dormers are incorporated into gable and hip roofs to provide additional light and ventilation.

Dual agency exists when a real estate broker represents both parties in a transaction in a fiduciary capacity. True or False?

True. Dual agency can lead to a conflict of interest. Such being the case, dual agency was revoked in the state of Florida in 1997.

The cost of 5 discount points on a $100,000 loan is $5,000. True or False?

True. Each discount point is equal to 1 percent of the loan amount. Five discount points is equal to fiver percent of $100,000 or $5,000.

Examinees who qualify under mutual recognition must pass a Florida-sepcific real estate law examination consisting of 40 questions. True or False?

True. Each licensee who applies for Florida licensure from a state that has a current mutual recognition agreement with Florida must pass, with a grade of at least 75 percent, a Florida-specific real estate law examination consisting of 40 questions worth 1 point each.

Governments can exercise direct controls like zoning or indirect controls like growth policies to influence the real estate market. True or False?

True. Examples of direct controls include zoning, building codes, and health ordinances that govern septic tank use and other health-related matters. Example of indirect controls include monetary policies of the federal government and planned future growth policies of local government.

FHA mortgages typically have a higher loan-to-value (LTV) ratio compared with conventional mortgages. True or False?

True. FHA mortgages require as little as 3.5 percent down payment. Therefore, an FHA mortgage loan requires a smaller down payment or a higher load-to-value ration (LTV) compared with conventional mortgage loans.

Fannie Mae does NOT make loans directly to consumers; rather, Fannie Mae purchases loans for its own portfolio. True or False?

True. Fannie Mae (formerly called the Federal National Mortgage Association or FNMA) was established by congress in 1938 for the purpose of creating a secondary market for mortgage loans. It is authorized either purchase loans for its own portfolio or underwrite loans.

After discussion with the broker, a real estate licensee offers to share part of the commission with the buyer. The arrangement is disclosed to all interested parties. This is an example of a legal kickback or rebate. True or False?

True. Florida law allows a real estate licensee to share part of the commission with the buyer or seller in a real estate transaction, provided the rebate is disclosed to all interested parties. Sharing a portion of the commission with a party to the transaction is an example of a legal kickback or rebate.

Florida statute requires mortgagees to send the recorded satisfaction to mortgagors within 60 days. True or False?

True. Florida statute requires that the mortgagee send the recorded satisfaction to the mortgagor within 60 days.

If a comparable property is superior to the subject property with regard to size, a downward adjustment is made to the sale price of the comparable. True or False?

True. If a comparable property is superior on a given feature, a downward adjustment is made to the comparable property. To remember: Comp Better = Subtract (CBS).

Adverse possession arises when the true owner of record fails to maintain possession and the property is seized by another. True or False?

True. If the true owner of record "sleeps on his rights" and does not use the legal means available to remove a hostile trespasser, the owner will lose the right to the property after a period of time.

Government buildings are immune properties - that is, government building are NOT subject to taxation. True or False?

True. Immune properties are government buildings (city, county, state, and federal government properties) plus special categories that have been made immune by a statute or ordinance, such as municipal airports. Immune properties are not even assessed and are not subject to taxation.

The covenant of quiet enjoyment is found in a general warranty deed. True or False?

True. In addition to the covenant of seisin and the covenant against encumbrances, the general warranty deed contains three unique covenants: (1) quiet enjoyment; (2) further assurance; and (3) warranty forever.

In platform construction, the wall framing is assembled on the concrete slab and then hoisted into place and anchored. True or False?

True. In platform construction, the wall framing is assembled on the concrete slab and then hoisted into place and anchored. If the house has more than one story, additional layers of floor platforms and walls are stacked on top of the first floor walls. The structure is completed with ceiling and roof framing.

Each section in a township contains 640 acres within its boundaries. True or False?

True. It is important to remember the exact number of acres in a section because the 640 value is used for many purposes.

Items credited to the buyer include the earnest money deposit. True or False?

True. Items credited to the buyer include the earnest money deposit, assumed mortgages, newly created mortgages, prorated property taxes, (city and county), prorated unpaid interest, prorated advance rent, and security deposits.

Examples of moral turpitude include embezzlement and crimes of larceny. True or False?

True. Moral turpitude is defined as a vile act; conduct contrary to honesty, good morals, justice, or accepted custom. Embezzlement and crimes of larceny fall under this definition.

In a tenancy by the entireties, and individual's ownership interest automatically transfers to the surviving spouse by right of survivorship. True or False?

True. Neither the husband nor the wife may will any portion of the spousal interest in an estate by the entireties.

The right of exclusion recognizes that an owner is considered to have the right to control entry onto the owner's land without interference and to collect damages for certain forms of trespass. True or False?

True. Other parties must have permission to enter the land of an owner with this right.

The maximum payment from the recovery fund for claims based on judgements against a licensed real estate broker may not exceed $150,000. True or False?

True. Payment for claims based on judgements against one broker or sales associate may not exceed, in total, $150,000.

Market indicators include price levels, vacancy rates, and sales volume. True or False?

True. Price levels are indicators of new housing supply and demand for certain price ranges; vacancy rates indicate the need and demand for housing in a certain market; and sales volume can be used in estimating the direction and rate of growth.

REITs give individuals the opportunity to pool resources for investment in real property. True or False?

True. REITs provide a means for individuals to pool resources for investment in a professionally managed portfolio of real property and/or mortgages secured by real property.

Heterogeneity is a term that refers to the uniqueness of land. True or False?

True. Real estate is unique. No two tracts of land are identical. The uniqueness of land is referred to as heterogeneity.

Religious organizations may restrict dwelling units they own or operate to members of their religion. True or False?

True. Religious organizations may restrict dwelling units they own or operate to members of their religion provided the organization does not otherwise discriminate in accepting its membership.

The 365-day method calculates the proration using the actual number of days in the proration period and is more accurate than the statutory month method. True or False?

True. The 365-day method calculates the proration using the actual number of days in the proration period. To use this method, first divide 365 into the annual cost of the item to find the exact daily rate, then multiply the number of days involved by the daily rate.

The Americans with Disabilities Act (ADA of 1990 requires that multifamily dwellings be designed and constructed so that the public and common-use portions of the dwellings are readily accessible to and usable by all persons with disabilities. True or False?

True. The ADA is a federal statute designed to remove barriers that prevent qualified individuals with disabilities from enjoying the same employment opportunities that are available to persons without disabilities. The act prohibits discrimination in place of public accommodations and in commercial facilities.

Members of the Florida Real Estate Commission determine and issue the final order in each disciplinary case. True or False?

True. The Commission (except for the members who served of Probable Cause) determine and issue the final order in each disciplinary case. The Commission members may accept, reject, or modify the conclusion of law and interpretation of administrative rules in the administrative law judge's recommended order.

The Florida Real Estate Commission's duty to create and pass real estate rules and regulations is the exercise of quasi-legislative power. True or False?

True. The Commission exercises its quasi-legislative power when it enacts rules and regulations that enforce the Florida statutory license law.

Alienation is the act of transferring ownership, title, or an interest in real property from one person to another. True or False?

True. The alienation may be voluntary (with the owner's control and consent) or involuntary (without the consent of the owner).

The amount that Federal Reserve member banks are required to keep on deposit is called the reserve requirement. True or False?

True. The amount that member banks are required to keep on deposit is called the reserve requirement. Raising or lowering this reserve requirement is one of the three primary methods used by the Fed to control the supply of money in circulation and thereby balance the economy.

The open-end clause permits the borrower to increase the loan amount as long as the total debt does NOT exceed the original amount of the loan. True or False?

True. The borrower may increase the loan amount under the open-end clause, but only if the total debt does not exceed the original amount of the loan.

The bylaws of the condominium association include procedures for calling meetings and determining voting requirements. True or False?

True. The bylaws describe the operational requirements of the association and provide for the administration of the association, including procedures for calling meetings and determining voting requirements.

The three general categories of residential construction include speculative, custom, and tract. True or False?

True. The categories are speculative (purchasing one or more lots and construction homes without first secure buyers), custom (constructing a home under contract with a buyer, using plans provided by architect or buyer), and tract (buyer selects a floor plan from a group of several model homes).

Florida's Growth Management Act requires that the infrastructure be in place before new development is allowed. True or False?

True. The concurrency provision in Florida's Growth Management Act of 1985 mandates that the infrastructure, such as roads and water and waste treatment facilities needed to support additional population, be in place before new development is allowed.

In the cost-depreciation approach, the maximum value of a property can be measured by determining the cost to acquire an equivalent site and to reproduce a structure as if new, and then subtracting accrued depreciation. True or False?

True. The cost-depreciation approach is based on the theory that a knowledgable purchaser will pay no more for a property than the cost of acquiring a similar site and constructing an acceptable substitute structure. The maximum value of a property can be measured by determining the cost to acquire an equivalent site and to reproduce a structure as if new, and then subtracting accrued depreciation.

Which statement is NOT associated with the economic concept of demand? -Demand is the desire and ability to purchase or lease goods and services. -Changes in price cause an inverse change in demand. -Consumer preferences influence demand. -The availability of building materials influences demand.

The availability of building materials influences demand. The availability of building materials has to do with supply (not demand).

On Oct. 1, 2005 Mr. Owner bought a house and borrowed $100,000 from the bank. On November 16, 2007 he borrowed $40,000 and gave a second mortgage on his house to his credit union. On December 9, 2010 he was sued over a car accident that occurred while his insurance was cancelled. The other driver received a judgment lien for $18,000. The other driver recorded the judgment lien. Mr. Owner experienced financial difficulties and quit paying the credit union. When the credit union forecloses, what will happen if the home sells at public auction for $80,000?

The bidder will receive a certificate of title from the clerk of the court and will own the house subject to the loan from the bank recorded Oct. 1, 2005, The second mortgage will be paid off and the owner will get some money from the foreclosure

What is a breach?

The breaking of a promise or obligation, either by an act of commission or omission; default; nonperformance

The definition of market value assumes that the terms of sale are in cash in U.S. dollars or in comparable financial arrangements. True or False?

True. The definition of market values assumes that (1) market value applies to a specified fate and may change with the passage of time; (2) the seller is able to convey a marketable title; (3) buyer and seller are typically motivated, and neither buyer nor seller is under any compulsion or pressure to conclude a sale; (4) both buyer and seller are well informed and acting in their individual best interest; (5) the property is exposed for sale on the open market for a reasonable time; (6) the term of sale are in cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (7) the price represents a normal consideration for the property, unaffected by creative financing or sales concession such as seller contributions or buydowns.

Regarding the parties in a contract, novation is the substitution of a new party for the original one. True or False?

True. The effect of novation is to discharge the original party from the obligation.

The going concern value of a business may be different from the real estate value. True or False?

True. The going concern or total value of an established business may differ from the value of real estate. Going concern value is the value of an established business property compared with the value of just the physical assets of a business that is not yet established.

At the time of application for a loan or within three business days thereafter, the lender is required to provide the borrowers with a good-faith estimate of probable closing costs related to those items for which information is available from past experience or from knowledge of current costs. True or False?

True. The good-faith estimate is required under the Real Estate Settlement Procedures Act of 1974. Generally, the estimate includes costs for loan closing service fees, recording fees, attorney fees, title search fees, and title insurance fees.

The MOST common type of legal description used for single-family dwellings located in developed subdivisions is the lot and block method. True or False?

True. The lot and block method can be used only where plat maps have been recorded in the public records.

The higher the R-value, the better the energy efficiency. True or False?

True. The measure of the effectiveness of insulation is its resistance to heat flow, or R-value. The higher the R-value, the better the energy efficiency.

Fixed-rate amortized mortgages usually call for regular, equal payments that include both interest payments and payments on the unpaid balance of the debt. True or False?

True. The monthly payment amount is fixed although the amount of the payment allocated to the principal increases and interest gradually decreases as the loan balance is paid down.

Ducted systems include two sets of ducts: supply air ducts and return ducts. True or False?

True. The supply air ducts carry the hot air from the furnace to the distribution registers throughout the house. The return air intake collects the cooled air through return ducts to a filter location in the furnace, where it is reheated and recycled throughout the home.

Most dwelling units in planned unit developments are clustered, with planned green spaces between clusters. True or False?

True. The trade-off for smaller residential lots is open green spaces.

Prepaid rent is entered on the closing statement as a debit to the seller and as a credit to the buyer. True or False?

True. The unused portion of the advanced rent belongs to the buyer so the buyer is credited the unused portion of the rent. The seller is debited the unused portion. Prorations are double entries (a debit to one party and a credit to the other). The dollar value of the debit and the credit are the same.

The availability of construction loans influences the supply of real estate. True or False?

True. The variables that influence supply are availability of skilled labor, construction loans and financing, land, and materials.

City planning commissions are typically delegated authority for site plan approval. True or False?

True. There are three areas of responsibility for which city planning commission are commonly delegated final authority: (1) subdivision plat approval, (2) site plan approval, and (3) sign control.

One exception to the Statute of Frauds concerns when an oral contract has been formed and the buyer has paid a part of the purchase price and then has either taken possession of the property or made some improvements to the property. True or False?

True. There is one other exception to the Statute of Frauds: when both parties have fully performed as promised, in which case the resulting legal relationships are precisely the same as those that would have existed has the contract been in writing.

Mutual assent refers to the making and acceptance of an offer. True or False?

True. There must have been a meeting of the minds between parties, meaning they must reach an agreement on all terms of the contract.

The constitution of the federal government and state governments grant the power to take private property for public use. True or False?

True. This power is known as eminent domain.

All earnest money sale deposits must be placed immediately in an escrow account an cannot be intermingled or commingled with the broker's personal or operating funds. True or False?

True. To commingle funds is the illegal practice of mixing a buyer's or seller's funds with the broker's own money or of mixing escrow money with the broker's personal funds or business funds.

Under the survey system, township lines are drawn every 6 miles north and south of a base line. True or False?

True. Township lines are drawn every 6 miles north and south of a base line.

U.S. citizenship is NOT required licensed in Florida. True or False?

True. U.S. citizenship is not required to become licensed in Florida. However, applicants are required to indicate a social security number on the application.

Broker and sales associates should NOT prepare deeds, mortgages, or promissory notes. True or False?

True. Unless they are also attorneys, brokers and sales associates who prepare such legal documents could jeopardize their real estate licenses.

A broker must first obtain a current opinion from an attorney before quoting an opinion that title to a property is good or marketable. True or False?

True. When questions of title arise, brokers are required to advise prospective buyers to have their attorney examine the abstract or to obtain a title insurance policy.

The real estate market is unusually slow to respond to change in supply and demand. True or False?

True. When the equilibrium between supply and demand is upset, it can be years before the imbalance is corrected.

A seller's market develops when the supply and demand equilibrium is upset by excess demand. True or False?

True. Whenever the supply and demand equilibrium is upset by excess demand, a seller's market develops. Whenever the supply and demand equilibrium of a market is upset by excess supply, a buyer's market develops.

An implied contract is one in which some or all of the obligations or conditions of a contract are NOT stated expressly. True or False?

True. With an implied contract, the obligations or conditions of the contract may be reasonably implied by the acts of the parties or by the nature of the transaction.

A real estate brokerage office receives an earnest money deposit check on Thursday. By end of business which day must the funds be deposited into the escrow (trust) account? Friday, Monday, Tuesday, Wednesday

Tuesday. Brokers must place trust funds into their escrow account no later than the end of business of the third day following receipt of the funds.

A proprietary real estate school may guarantee employment of a student or prospective student on the basis of training to be provided so long as the school offers the student a bona fide employment contract. True or False?

Ture. The school may guarantee employment, but only if it also offer the student a bona fide employment contract.

Which statement is TRUE regarding interest-bearing escrow accounts? -Brokers may make an office policy that all escrow funds must be places in an interest-bearig account to help cover the costs of maintaining the account, and are not required to disclose this is each each sale contract because it applies to all transactions -The broker must get written permission from all parties to the transaction before placing the funds into an interest-bearig account -It is illegal for the broker to keep any interest earned on escrow funds -Florida license law requires the interest accrued on escrow funds to be credited to the buyer because it is the buyer's earnest money deposit

The broker must get written permission from all parties to the transaction from all parties to the transaction before placing the funds into a interest-bearing account. If an escrow account is an interest-bearing account, the broker must get written permission from all parties before placing the funds into the account. The written authorization must specify who is entitled to the interest earned.

A buyer and seller enter into a contract for sale and purchase of a home. The contract is contingent on a radon test. The radon test indicates a high level of radon gas in the home, and the buyer gives written notice to cancel the contract. The seller refuses to sign a release of the buyer's earnest money deposit and demands receipt of the deposit for himself. Which statement applies to this situation?

The broker must notify the Florida Real Estate Commission in writing within 15 business days of the buyer's and seller's conflicting demands for the earnest money.

A licensed real estate broker has a successful real estate business. The broker has branch offices in Fort Myers, Naples, and Bradenton, Florida. The broker wants to close her Bradenton office and open a new branch office in Sarasota, Florida. Which statement applies to this situation? -The broker can request that the branch office license for Bradenton be transferred to the Sarasota location to avoid paying another branch office fee. -The broker simply must notify the DBPR within 15 business days of the change of address from the Bradenton location to the new Sarasota location. -The broker must request permission from the DBPR to relocate to Sarasota before opening the new location. -The broker must register the new branch location and pay the branch office license fee.

The broker must register the new branch location an pay the branch office license fee. The new location must be registered and the fee paid. Registrations issued to branch offices are not transferable.

A broke licensee is the broker for two independent real estate brokerages. Which statement applies to this situation? -The broker must request and be issued a group license -The broker licensee ma only be the broker for one Florida real estate company -The broker must request and be issued multiple broker license- one for each brokerage company -The broker must register as a broker associate for one of the real estate companies

The broker must request and be issued multiple broker licenses-one for each brokerage company. Multiple licenses are issued to brokers who qualify as the as the broker for more than one business entity. A broker who holds more than one Florida broker license is said to hold multiple licenses.

A written contract for sale and purchase of commercial property that used designated sales associates failed to close. Is the broker required to retain the brokerage relationship disclosure documents, and if so, for how long?

The broker must retain the disclosure documents for five years even if a nonresidential transaction that used designated sales associates fails to close.

Is a broker required to retain the brokerage relationship disclosure documents, and if so, for how long, if written nonresidential transaction the utilized designated sales associates fails to close? -The broker is required to retain disclosure documents only for contracts the go to title closing -The broker must retain the disclosure documents for 90 days to give ample opportunity for the parties to close the deal -The broker must retain the disclosure documents for two years even if a nonresidential transaction fails to close -The broker must retain the disclosure documents for five years even if a nonresidential transaction the utilized designated sales associate fails to close

The broker must retain the disclosure documents for five years even if a nonresidential transaction that utilized designated sales associates fails to close. This requirement includes files of properties that may have failed to close.

Which of the following is true regarding the Florida Real Estate Commission:

Two members do not have a Florida Real Estate License

What are the dimensions of a parcel of land formed by sections 25, 26, 35, and 36 of a township? -One mile by four miles -Two miles by four miles -Six miles by twenty-four miles -Two miles by two miles

Two miles by two miles. Sections 25, 26, 35, and 36 form a square. Because each section is one mile square, the resulting square is two miles by two miles, or two miles square.

What is joint venture?

Two or more people or firms carry out a single business project

After what period of time does an involuntary inactive license automatically expire and become null and void? One year, Two years, Four years, Five years

Two years. When a license is in involuntary inactive status for more than two years, the license automatically expires and becomes null and void.

Who renders a determination as to whether probable cause exists? -Seven-member Commission -Administrative law judge -Two-FREC-member panel -DBPR investigator

Two-FREC-member panel. The probable-cause panel is composed of two members of the FREC. The probable-cause panel's sole responsibility is to determine whether probable cause exists.

A tenant of a rental apartment has given notice to vacate at the end of the lease. Is the tenant required to allow the management company to show the premises to a prospective tenant? -No, the management company may not access the premises to show the apartment to a prospect unit the current tenant vacates the property -No, the management company may not access the property except to respond to an emergency or to make repairs to the dwelling -Yes, the tenant must allow the management company to show the property to a prospective tenant, provided reasonable notice is given -Yes, the property is owned by the management company so they are within their legal rights to show the property to prospective tenants any time during working hours

Yes, the tenant must allow the management company to show the property to a prospective tenant, provided reasonable notice is given. A tenant may not unreasonably withhold consent for a landlord to enter rented premises to exhibit or show the premises.

If you buy a residential condominium:

You can rescind your contract within 15 days if you are buying from a developer, If you are buying from the second owner, you have 3 days to rescind the contract and if the condo is new, the purchaser must be given a prospectus by the developer

Which regulation requires lenders to disclose the annual percentage rate of interest and finance charges? A, F, R, Z

Z. The Truth-in-Lending Act is implemented by the Federal Reserve Regulation Z. The law requires lenders to disclose the annual percentage rate of interest and finance charges imposed on consumers.

What controls utilization?

Zoning ordinance

City planning commissions typically do NOT have final authority for... -zoning revisions. -subdivision plat approval. -commercial sign control. -sit plan approval.

Zoning revisions. Three areas of responsibility for which city planning commissions are commonly delegated final authority are: (1) subdivision plat approval, (2) site plan approval, and (3) sign control.

Which description BEST fits and option contract? -Voidable -Bilateral -Unilateral -Unenforceable

Unilateral. In an option contract, the owner (optionor) is bound to perform the terms of the option if required to do so by the optionee. The optionee, however, may elect to walk away from the deal because the option contract grants the optionee a right, not an obligation, to buy the property.

What is permission to build or use to relieve a hardship not caused by owner?

Variance

Which of the following words are synonyms?

Vendor - Seller

The parties in a real estate sale contract are BEST described as the... -grantor and grantee -vendor and vendee -mortgagor and mortgagee -seller and vedor

Vendor and vendee. The parties to a sale contract are the vendor (seller) and the vendee (buyer).

Which lien is classified as a voluntary lien?

Vendor's Lien - equitable lien of the grantor (seller under a PMM) on the land conveyed in the amount of the unpaid purchase price

Which type of lien is a specific lien? -Judgment -Income tax -Estate tax -Vendor's

Vendor's. A specific lien affects only a certain specified property. A vendor's lien is created when the seller (vendor) finances part of the down payment on the purchase.

Which direction describes a range? -Horizontal -Vertical -Square -Diagonal

Vertical. Ranges are vertical (north/south) strips of land parallel to the principal meridian.

A man owns a condominium for his lifetime. Upon his death, the property will convey to his sister. Which term applies to the sister? -Vested remainderman -Contingent remainderman -Devisee -Dower

Vested remainderman. When a life estate ends, the property sometimes reverts to a third party, called a remainderman. A vested remainderman refers to someone whose legal name is specified in the life estate. A contingent remainderman is not identified by a legal name, such a "first born grandchild."

What is a notice of noncompliance?

Warning for minor violation that allows a licensee 15 days to correct the minor infraction without consequence

The term used to measure the amount of energy an electrical appliance consumes is

Wattage is the measurement of the amount of energy consumed.

Disintermediation is:

When normal people borrow money from sources other than financial institutions

When can a license be suspended immediately?

When the Secretary of the DBPR (Dept of Business & Professional Regulations) issues an emergency suspension

When can a license be suspended immediately?

When the Secretary of the DBPR issues an emergency suspension

Positive leverage occurs:

When the benefits from borrowing exceed the costs of borrowing

Positive leverage occurs:

When the equity dividend rate is larger than the overall capitalization rate

A group license

allows a sales associate or broker associate employed by an owner-developer to sell property for all the affiliated entities owned by the developer.

A sales associate receives a deposit from a buyer on Wednesday morning. The associate must

deliver the deposit check to the employer by the end of business on Thursday.

An owner of an apartment complex pays $100 to each tenant who refers a person who becomes a tenant. The referring tenants do not hold real estate licensees. This arrangement is

illegal, because the amount of compensation exceeds the allowable amount. (no more than $50 to an unlicensed person who is a tenant of the apartment complex for the referral fee

A Georgia real estate licensee moved to Miami five months ago. She requests a Florida sales associate license based on mutual recognition. The Georgia licensee

is exempt from the sales associate course; however, she must pass a written Florida-specific real estate law exam.

A Social Security number is

required by Florida law to verify that license applicants are current on child support payments.

A lead-based paint disclosure must be given to

tenants and buyers of all residential property built before 1978.

A senior citizen who owns a home located in Pinellas County, with an assessed value of $112,800. The city tax rate is 9.5 mills, the county rate is 9.5 mills, and the school board tax rate is 7.3 mills. The senior citizen has homesteaded his principal residence. The amount of savings in property taxes realized b all allowable tax exemptions is... -$657.50. -$670.65. -$1,132.50. -$1.651,64.

$1,132.50. The solution is: 9.5 city + 9.5 county + 7.3 school = 26.3 mills; $25,000 homestead x .0263 mills = $657.50 savings; $9.5 city mills + 9.5 county mills = 19 mills; $25,000 additional exemption x .019 = $475 savings; $657.50 + $475 = $1,132.50 total savings.

Mr. Buyer bought a house for $135,250. He assumed a $78,411 mortgage of 8%. The seller held a purchase money second mortgage for $13,750. What is the total tax to the Sate of Florida paid on this transaction?

$1,297.65

An investor bought three houses for a total of $44,000. The second house cost $4,000 more than the first. The third house cost $6,000 more than the second house. How much did the first cost?

$10,000

What is the fine per telephone call for violation of Florida's Telemarketing Act? -$1,000 -$5,000 -$10,000 -$11,000

$10,000. Violators of Florida's Telemarketing Act may be fined $10,00 per call.

An investor purchased a commercial building in January for $524,900. The contract specified that 80 percent of the purchase price was allocated to the structure and the remaining purchase price was allocated to the land. What is the annual depreciation deduction? (Round to the nearest dollar.) -$3,817 -$10,767 -$12,459 -$15,270

$10,767. The solution is: $524,900 x .80 = $419,920 divided by 39 years = $10,767.

An appraiser is calculating the reproduction cost new of a home using the comparative square-foot method. The appraiser measured the exterior dimensions of the home, which were 30 feet by 55 feet, plus a a detached garage measuring 22 feet by 2 feet. The appraiser consults an accepted cost manual and estimated the reproduction cost for heated and air-conditionaled living area to be $90.50 per square foot and the finished free-standing garage to be $58.00 per square foot. What is the reproduction cost new of the improvements? -$149,325 -$179,949 -$185,450 -$197,109

$179,949. The solution is: 30 feet x 55 feet = 1,650 square living area x $90.50 = 149,325; 22 feet x 24 feet = 528 square feet garage area x $58.00 = $30,624 $149,325 + $30,624 = $179,949 reproduction cost new

Mr. Buyer bought a house for $255,750. He assumed a $132,854 mortgage of 8%/yr. The seller held a purchase money second mortgage for $74,200. What is the total tax to the State of Florida paid on this transaction?

$2,663.85

If a person borrowed $100,000 and paid 6% interest rate, and they paid $2,000 in interest, how long did they have the money? a. 2-1/2 years b. 3 months c. 1 year d. 4 months 100. Andy bought a house from George for $275,000. He assumed an existing mortgage of $72,524 from George, and obtained a $147,475 new mortgage from the bank. What are the total state transfer taxes in this transaction?

$2,990.30

A home has 2,000 square feet of living are an 485 square feet of garage. The reproduction cost new is $98 per square foot for living area and $55 per square foot for finished garage area. The site measures 75 feet wide by 120 feet deep and is valued at $5 per square foot. The economic life of the structure is estimated to be 60 years. The house is 10 years old. What is the value of the property using the cost-depreciation approach (round figured to the nearest dollar)? -$185,562 -$208,333 -$222,675 -$230,562

$230,562. The solution is: 2,000 square feet x $98 = $196,000 living area; 485 square feet x $55 = $26,675 garage area; $196,000 + $26,675 = $222,675 reproduction cost new; $222,675 divided by 60 year economic life x 10 years = $37,112.50 accrued depreciation (rounded up to $37,113). $222,675 - $37,113 = $185,562 depreciated structure; 75 feet wide x 120 feet deep = 9,000 square feet for lot; 9,000 x $ 5 per square foot = $45,00 land value $185,562 + 45,000 = $230,562 property value

Comparable A sold for $286,900. The comparable is a 3-bedroom, 2-bath home with a loft and swimming pool. The loft if worth $30,000; the pool is worth $15,000. The subject property is a 3-bedroom, 2 1/2 bath home. The extra half bath is worth $12,000. What is the adjusted price of Comparable A? -$241,900 -$253,900 -$319,900 -$331,900

$253,900. The solution is: $286,900 - $30,000 (loft) - $15,000 (pool) + $12,000 (half bath) = $253,900

A developed company purchased 1,000 acres of land from a foreign sellers for $2,850,000. Federal law requires the buyer to withhold from the seller and pay to the IRS approximately... -$0 -$28,500 -$142,500 $285,000

$285,000. The IRS requires that the buyer withhold 10 percent of the gross sale price. The buyer must report the purchase and pay the IRS the amount withheld.

A property owner has lived in her home for seven years. This year, the owner refinanced her mortgage loan in order to reduce her monthly housing expense. The property owner may NOT deduct which housing expense on her annual federal income tax return? -$7,850 property taxes -$11,749 mortgage interest -3,000 points charged to refinance the mortgage loans -Gloria may deduct ll of these expenses

$3,000 points charged to refinance the mortgage loan. Points are deductible in the year paid, unless they pare paid when refinancing a loan. In such cases, the points must be deducted over the entire life of the mortgage loan.

A buyer pays $198,000 for a home and secures a mortgage for 80 percent of the purchase price. The mortgage is for 5 percent plus 2 points. How much did the buyer pay in discount points? -$792 -$2,810 -$3,168 -$3,960

$3,168. The solution is: $198,000 purchase price x .80 rate = $158,400 mortgage; $158,400 x .02 rate = $3,168

Rent is $2,500 per month plus 3 percent of gross sales. The total rent for last month was $3,400. Calculate the gross sales for the same month. -$20,000 -$26,300 -$30,000 -$43,500

$30,000. The solution is: $3,400 total rent - $2,500 base rent = $900 rent based on gross sales; Part divided by Rate = Whole; $900 divided by .03 rate = $30,000 gross sales.

You have been granted homestead tax exemption. Your assessed property value is $395,000. What is your taxable property value for county taxes? -$50,000 -$345,000 -$370,000 -$395,000

$345,000. The solution is: $395,000 assessed value - $50,000 homestead exemption = $345,000 taxable value.

A corner lot measures 120 by 100 feet. Street paving costs are $55 per running foot, and the city will pay 30 percent of paving costs. All of the streets in the neighborhood are being paved. What is the property owner's assessment? -$3,273 -$4,235 -$4,620 -$8,470

$4,235. The solution is: 120 feet + 100 feet = 220 total feet x $55 = $12,100; $12,100 x .30 = $3,630; $12,100 - $3,630 = $8,470 property owners' share; $8,470 divided by 2 sides of the street = $4,235 assessment.

A professional office center is purchased for $475,000. The land value is 20 percent of the total acquisition cost. What is the annual IRS depreciation deduction? (Round answer to nearest dollar.)

$475,000*.8 = $380,000 / 39 years = $9,744

John purchased an apartment building that has a monthly net income of $4000 per month. Monthly expenses are $1000 per month. If an investor desire a 10% return, what is the value of this property?

$480,000

Under Florida Statute 455, which penalty may be imposed on an individual for unlicensed practice of real estate? -$5,000 fine per count -Revocation -Suspension -Any of the above penalties may be imposed

$5,000 fine per count. Revocation and suspension are penalties that may be imposed against a holder of a real estate license. The DBPR is authorized to issue fines of up to $5,000 per count to a person it finds guilty of unlicensed activity.

What amount of a broker's own personal funds may the broker place in the property management escrow account? $0, $1,000, $5,000, $10,000

$5,000. A broker may keep up to $5,000 of the broker's personal funds or brokerage funds in a property management escrow account.

What are the total property taxes if the assessed value is $265,800 and the homeowner qualifies for homestead exemption? The city tax rate is 10 mills, the county tax rate is 9.5 mills, and the school board tax rate is 5.8 mills. -$5,459.74 -$5,604.74 -$6,724.74 -$6,869.74

$5,604.74. The solution is: $265,800 - $50,000 exemption = $215,800 taxable value; 10 city mills + 9.5 county mills + 5.8 school mills = 25.3 or .0253 mills; $215,800 x .0253 tax rate = $5,459.74 taxes due; $25,000 additional exemption x .0058 school board mills = $145 additional taxes due; $5,459.74 + $145 = $5,604.74 total taxes due.

The price per square foot for three comparable lots is as follows: Lot 1: $5.25; Lot 2: $6.00; and Lot 3: $6.30. Based on inspection of the properties and considerations such as shape and location, the appraiser decides to use a weighted averaging technique of 20 percent weight for Lot 1 and 40 percent weight each for Lots 2 and 3. What is the average price per square foot? -$1.99 -$5.85 -$5.97 -$6.25

$5.97. The solution is: $5.25 x .20 = $1.05; $6.00 x .40 = $2.40; $6.30 x .40 = $2.52; $1.05+$2.40+$2.52=$5.97 per square foot

The maximum amount that may be collected from the Real Estate Recovery Fund as a result of a single real estate transaction is... -$25,000 -$50,000 -$100,000 -$150,000

$50,000. Payment for claims arising out of the same transaction are limited, in total, to $50,000 or the unsatisfied portion of a judgement claim, whichever is less.

What is the maximum finder's fee that may be paid in the form of a credit toward rent paid to the tenant for referring a person to the management company if that person later becomes a tenant of the complex? -One month's rent -$100 -$50 -$0; this is an illegal kickback

$50. A property management firm or an owner of an apartment complex may pay a finder's fee (or referral fee) of up to $50 to an unlicensed person who is a tenant of the apartment complex.

A buyer has applied for a 20-year mortgage of $52,000 at 7 3/8 percent interest. How much of the $414.94 monthly payment paid in month two will apply to principal?

$52,000 x .07375 = 3,835 / 12 = 319.58 414.94 - 319.58 = 95.36 52,000 - 95.36 = 51,904.64 51,904.64 x .07375 = 3,830.56 / 12 = 319.21 414.94 - 319.21 = 95.94 principal amount for month 2

A limited partnership plans to purchase an apartment building that has a monthly net income of $5,200 and monthly expenses of $1,400. If the partnership is to get a 12 percent return on investment, what should it pay for the property? -$43,333 -$62,400 -$350,500 -$520,000

$520,000. The solution is: $5,200 monthly net income x 12 months = $62, 400 annual NOI Income divided by Rate = Value $62,400 divided by .12 rate of return = $520,000 target price

A commercial propert has a potential gross income of $75,000. Vacancy and collection losses are 5 percent of PGI. Additional operating expenses total $16,500. Payments on the first mortgage are $1,500 per month. Using a capitalization rate of 10 percent, which amount is an accurate estimate of the property's value? -$547,500 -$585,000 -$595,250 -$615,789

$547,500. The solution is: $75,000 PGI x .05 rate = $3,750 vacancy an collection loss; $75,000 - $3,750 = $71,250 EGI; $71,250 - $16,500 = $54,750 NOI; $54,750 divided by .10 = $547,500

A homesteaded single-family residence has an assessed value of $92,800. The owner is a 25 percent service-disabled veteran who is 75 years of age. What is the total homestead tax exemption? -$30,000 -$50,000 -$55,000 -Totally tax-exempt

$55,000. The solution is: $50,000 homestead exemption + $5,000 disability = $55,000 total homestead tax exemption.

An income-producing property has a projected effective gross income of $65,000. Expenses are estimated at 20 percent of effective gross income. An appraiser has determined that an appropriate capitalization rate is 8 percent. What is the estimated market value of this property? -$325,000 -$485,500 -$650,00 -$812,500

$650,000. The solution is: $65,000 EGI x .20 rate = $13,000 expenses; $65,000 - $13,000 = $52,000 NOI NOI divided by Rate = Value $52,000 divided by .08 cap rate = $650,000 value

John purchased an apartment building that has a monthly net income of $4,500. Monthly expenses are $1,250. If an investor desire an 8% return, what is the value of this property?

$675,000

A buyer was defrauded by a real estate licensee. The buyer is awarded a judgement against the licensee in the amount of $7,000 damages plus $2,300 for attorney's fees and court costs. The buyer has been unable to collect on the judgement, but it is determined that the buyer may seek reimbursement from the Real Estate Recovery Fund. How much can the buyer recover from the Fund? -$7,000 -$9,300 -$10,000 -$50,000

$7,000. The buyer can recover the amount of the judgement up to $50,000 or the unpaid amount of the judgement, whichever is less. The buyer cannot be reimbursed from the Recovery Fund for court costs or attorney's fees.

In 2010, a taxpayer had a $30,000 loss from the sale of Investment Property A, a $28,000 gain from the sale of Investment Property B, and a $3,000 loss from the sale of his principal residence. All three properties were owned for more than 12 months. The taxpayer also earned a $75,000 salary. What is the 2010 total income for tax purposes, using just this information? -$77,000 -$73,000 -$72,000 -$70,000

$73,000. The solution is: $30,000 loss Property A + $28,000 gain Property B = $2,000 net loss from sale of investment properties; $75,000 salary - $2,000 loss = $73,000 taxable income. (Note: You cannot deduct loss from the sale of a principal residence.)

A building is valued at $420,000 when NOI is capitalized at a rate of 8 percent. NOI is 40 percent of effective gross income. Calculate the effective gross income. -$33,600 -$45,650 -$69,000 -$84,000

$84,000. The solution is: $420,000 x .08 cap rate = $33,600 NOI $33,600 NOI divided by 40 percent rate = $84,000 EGI

An investor bought three houses for a total of $44,000. The second house cost $6000 more than the first. The third house cost $4000 more than the second house. How much did the first house cost?

$9,333.33

The market value of an apartment building is $475,900. The investor has leveraged $380,720. What is the investor's equity in the property? -$50,000 -$95,180 -$380,720 -$475,900

$95,180. The solution is: $475,900 market value - $380,720 leverage amount = $95,180 equity.

Charging 2 discount points has the effect of increasing the lender's yield on a mortgage loan by what percent? -.00125 -.25 -.50 -1.0

.25. Each discount point increases the lender's yield by approximately 1/8 of 1 percent or .00125. Therefore, 2 discount points would increase the yield by approximately 2 x .00125 = .0025 or .25 percent.

Change 42 1/2 percent to a decimal. -42.5 -4.25 -.425 -.425

.425. To change any percentage to an equivalent decimal, place a decimal point two places to the left of the number and drop the percent sign. (This is the same as dividing the percentage figure by 100.) If necessary, add a zero to the left to allow moving the decimal point two places to the left.

Change 85 percent and 155 percent to decimals.

.85 and 1.55. To change any percentage to an equivalent decimal, place a decimal point two places to the left of the number and drop the percent sign. (This is the same as dividing the percentage figure by 100.) If necessary, add a zero to the left to allow moving the decimal point two places to the left.

How many square miles in a section?

1

Differentiate between an apartment, condominium, time-share, and cooperative.

-Apartment - tenant has no ownership interest -Condominium - owner owns unit and shared interest in common elements -Time-share - multiple owners of a single property -Cooperative - owner owns stock in corporation and holds lease on unit

Place in the proper order the steps involved in the process of dealing with complaints of alleged violations. -Final order -Formal complaint -Filing the complaint -Probably cause -Judicial review -Informal or formal hearing -Investigation

-Filing the complaint -Investigation -Probable cause -Formal complaint -Informal or formal hearing -Final order -Judicial review

Price fixing is:

A violation of Sherman-Clayton antitrust law

What is a contract?

A voluntary, legally enforceable promise between legally competent parties

A tenancy at will:

1.) Can be terminated by either party giving notice to the other 2.) Can be a month to month rental agreement and either party can terminate with 15 days notice to the other party and 3.) Can be written or oral

A Florida real estate license:

1.) Has the expiration date on it 2.) Expires biennially and 3.) Serves as prima facie evidence that the holder is properly licensed

On Oct. 1, 2005 Mr. Owner bought a house and borrowed $100,000 from the bank. On Nov. 16, 2007 he borrowed $40,000 and gave a second mortgage on his house to his credit union. On Dec. 9, 2010 he was sued over a car accident that occurred while his insurance was cancelled. The other driver received a judgment lien for $18,000. The other driver recorded the judgment lien. Mr. Owner experienced financial difficulties and quit paying the credit union. When the credit union forecloses, what will happen if the home sells at public auction for $80,000?

1.) The bidder will receive a certificate of title from the clerk of the court and will own the house subject to the loan from the bank recorded Oct. 1, 2005 2.) The second mortgage will be paid off and 3.) The owner will get some money from the foreclosure

When property is bought subject to the mortgage:

1.) The documentary stamps on the mortgage are not paid 2.) the grantee is not responsible to pay the note and 3.) The mortgagee could not sue the owner for a deficiency judgment in the event of default

Who can bid at a foreclosure auction?

1.) The mortgagee 2.) The mortgagor and 3.) A Realtor with an active Florida real estate license

If you buy a residential condo:

1.) You can rescind that contract with 15 days if you are buying from a developer 2.) If you are the second owner of this condo, you have 3 days to rescind the contract and 3.) If the condo is new, the purchaser must be given a prospectus by the developer

Report the deadline for the following: If a broker requests a EDO ad the escrow dispute is setled before the EDO is issued, he/she must notify the FREC within...

10 business days

A broker made a request to the Commission that it issue an escrow disbursement order (EDO) regarding disputed escrowed funds. Prior to the EDO being issued, the escrow dispute was settled between the parties. How long does the broker have to notify the FREC that the matter has been resolve? -24 hours -10 business days -15 business days -30 calendar

10 business days. If a broker requested an EDO and the escrow dispute is either settled or goes to court before the EDo is issued, the broker must notify the FREC within 10 business day.

What is a building's vacancy rate is 621 units are rented in a 690-unit building? -10 percent -25 percent -75 percent -90 percent

10 percent. The solution is: 690 total units - 621 rented units = 69 vacant units; 69 vacant units divided by 690 total units = .10 or 10 percent vacancy rate.

The maximum time a Florida real estate license can be suspended is?

10 years

What is the state's intangible tax on a new mortgage of $10,000?

10,000 x .002 = $20

How many acres are in a parcel described as the SW1/4 of NE1/4 of the SE1/4? -5 -10 -20 -40

10. 640 ÷ 4 ÷ 4 ÷ 4 = 10 acres.

Which section is located directly south of section 1? -2 -6 -12 -16

12. Section 12 is located directly south (below) section 1.

An income-producing property has a potential annual gross income of $98,500. Vacancy and collection losses are estimated at 10 percent f potential gross income. Expenses are estimated at $45,000. The estimated value of the property is $350,000. What is the capitalization rate for this property? -11.75 percent -12.47 percent -16.74 -28.14

12.47. The solution is: $98,500 PGI x .10 rate = $9,850 vacancy and collection loss; $98,500 - $9,850 = $88,650 EGI; $88,650 - $45,000 expenses = $43,650 NOI; NOI divided by Value = Rate $43,650 divided by $350,000 value = .1247 or 12.47% cap rate

Three wires come into most modern homes with:

120 volt per wire of electricity and one ground wire

Three wires come into most modern houses with:

120 volt per wire of electricity and one ground wire

How many acres are in a parcel described as the SW1/4 of the NE1/4 and the SE1/4 of the S1/2? -2.5 -5 -80 -120

120. 640 ÷ 4 ÷ 4 = 40 acres; 640 ÷ 4 ÷ 2 = 80 acres; 40 + 80 = 120 acres.

A residential property recently sold for $163,900. The property rents for $1,225 per month. What is the GRM for this property? (Round to the nearest whole number.) -120 -124 -120 -134

134. The solution is: $163,900 sale price divided by $1,225 rent = 133.7959 (rounded to 134 GRM).

An income producing property has an effective gross income of $97,580. Vacancy losses are expected to be 10%. Expenses are $47,000. If the price of this property is $350,000, what is the capitalization rate?

14.45%

A developer purchased two 145-front foot lots for $23,900 net each and divided them into three lots of equal front footage. The developer sold the lots for $250 per front foot. Calculate the developer's percentage of profit (round to nearest whole percentage point).

145 x 2 = 290 290 x 250 = 72,500 - 47,800 = 24,700 24,700 / 47,800 = 52% profit

A tenant notified the landlord that she will not be renewing the lease. The tenant leaves the unit in excellent condition. After inspection of the premises, the landlord decided that the tenant is eligible to receive a full refund of the damage deposit. Within how many days must the landlord return the deposit? 3, 15, 30, 60

15

Which property would be defined as agricultural property under Chapter 475 of the Florida statutes? 15 acres of underdeveloped agricultural land, The sale of a rural grocery store, Warehouse for storing agricultural products in an industrial park, A farm house and a five-acre ranch

15 acres of underdeveloped agricultural land. Agricultural property is defined in Chapter 475 F.S., to mean agricultural property of more than ten acres.

Report the deadline for following: Broker must notify the FREC in writing of conflicting demands of a good faith doubt within...

15 business days

A borrower does NOT have the right to cancel which loan contract within three business days? -Home equity line of credit -Second mortgage on vacation home -15-year mortgage to purchase a home -15-year mortgage loan to refinance home at a lower interest rate

15-year mortgage to purchase a home. A borrower does no have the right to cancel home acquisition loans.

A developer who builds and sells new condominium units must allow buyers the opportunity to cancel the purchase agreement within how many days of signing the contract? -3 -5 -10 -15

15. Purchasers of new condominium units may cancel the contract within 15 days of signing the contract and receipt of the required documents.

How many days' notice must be given to terminate a month-to-month tenancy? -5 -10 -15 -30

15. When the tenancy is a month-to-month tenancy, the landlord must give the tenant a minimum of 15 days' notice to vacate.

A developer bought 18 acres of land. He intends to create a 40 lot subdivision. He knows 10% of land will be used for parks and common areas. The streets will require 20 feet by 2000 feet. If the lots are all equal size, how big will each lot be?

16,642 sq. ft

An income producing property has an effective gross income of $81,420. Vacancy losses are expected to be 10%. Expenses are $40,000. If the price of this property is $250,000, what is the capitalization rate?

16.5%

A developer bought 16 acres of land. He intends to create a 30 lot subdivision. He knows 10% of land will be used for parks and common areas. The streets will be 21 feet by 600 yards. If the lots are equal size, how big will each lot be?

19,684 sq. ft.

Which of the following is true regarding the Florida Real Estate Commission:

2 members do not have a Florida Real Estate License

The just value of a homesteaded property in Leon County is $425,800. The Consumer Price Index for the previous year was two percent. The property's just value increased the maximum allowed under the Save Our Home Amendment. By what percent did the just value increase? -2 percent -3 percent -Percent passed by the Leon County residents -Percent increased approved by the county commissioner

2 percent. The just value of homesteaded property may be increased either three percent annually (based on the assessed value for the previous year), or the percent change of the Consumer Price Index for the preceding year, whichever is less.

Which FHA program is the most common FHA-insured mortgage program? -203(b) -234 -245 -251

203(b). Title II, Section 203(b) is the fixed-rate loan program for one - to four - family residences.

Within what period of time must the seller be given a copy of a written listing agreement? -24 hours -48 hours -3 days -5 days

24 hours. Pursuant to Florida Statute 475.25, a copy of the listing contract must be given to the owner(s) within 24 hours of execution.

Developer Bob bought three 200 foot lots on the river for $250 per front foot. He subdivided that land into six riverfront lots and sold them for $31,250 per lot. What was his percent of profit?

25%

If a person bought a vacant lot for 80% of asking price and sold it for the asking price, what is % of profit?

25%

44,032 divided by 1.72 =

25,600

If a potential buyer earns $6000 per month in gross income and their new house payment is $1680 (PITI), what is this buyer's housing expense ratio?

28%

If a potential buyer earns $6000 per month in gross income and their new house payment is $1680 (piti), what is this buyer's housing expense ration?

28%

A piece of property that is 400 feet by 325 feet is:

3 acres

If a person borrowed $50,000 and paid 6% interest rate and they paid $750 in interest, how long did they have the money?

3 months

How much is the minimum cash investment on an FHA loan?

3.5% is the minimum down payment on a FHA loan

Within how many days must a landlord notify a tenant of intentions to claim part of the security deposit?

30 Days - if landlord is making a claim on the deposit, the landlord has 30 days to notify the tenant of the claim.

Report the deadline for the following: Upon receiving conflicting demands, brokers must institute one of the settlement procedures within...

30 business days

A student who fails the sales associate end-of-course exam must wait how long from the date of the original examination to retest? 24 hours, 7 days, 14 days, 30 days

30 days. Rule 61J2-3.008 of the Florida Administrative Code states that a student who fails the end-of-course exam must wait at least 30 days from the date of the original examination to retest. Alternatively, the student may retake the course and take an alternate exam after passing the course a second time.

An investor purchased three 200-foot lots on a lake for $700 per front foot each. The investor then subdivided the lots into six lakefront lots, which he then sold for $91,000 each. What was his percentage of profit on the sales? -20 percent -25 percent -30 percent -35 percent

30 percent. The solution is: 3 lots x 200 feet = 600 front feet; 600 front feet x $700 per front foot = $420,000 cost of lots; $91,000 lot sales pice x 6 lots = $546,000; $546,000 - $420,000 = $126,000 profit $126,000 profit divided by $420,000 costs = .30 or 30% profit

An elective share consists of what percent of a decedent's net estate, other than homesteaded property? -10 -20 -25 -30

30. An elective share is defined as consisting of 30 percent of the decedent's net estate, except for homesteaded property.

The FREC imposes an administrative penalty on a broker for violation of license law. Within how many days after the final order is filed does the order become effective? 15, 30, 60, 90

30. The final order becomes effective 30 days after it has been entered.

A licensee has how many days to file an appeal once the final order has been issued? 30, 45, 60, 90

30. The licensee-respondent may challenge the final order within 30 days by filing a petition for judicial review.

A parcel of land contain 93.5 acres. A developer has reserved 25 percent of the land for streets and green space. Applicable zoning regulations require a minimum of 9,750 square feet per residential lot. The number of permissible lots is... -313. -364. -412. -418.

313. The solution is... 93.5 acres x .25 rate = 23.375 acres for streets and green space; 93.5 - 23.375 = 70.125 acres for lots; 70.125 x 43,560 square feet per acre = 3,054,645 square feet for development; 3,054,645 divided by 9,750 = 313.29 or 313 buildable lots.

If a person bought a vacant lot for 75% of asking price and sold it for the asking price, what is the % of profit?

33%

When conventional lenders qualify a buyer for a mortgage, they usually require the buyer's total debt to income to be no more than what percentage of gross monthly income? -41 -36 -28 -27

36. FNMA's benchmark ratio for total debt to income is 36 percent.

A local lender charged 4 percent interest plus 4 points on a conventional mortgage loan. What was the approximate yield on the loan?

4 % plus 4 x 1/4, or 4.5%

A piece of property that is 525 feet by 330 feet is:

4 Acres

For licensing purposes, a resident of Florida is defined as a person who has resided in Florida for what period of time? 2 years, 1 year, 6 months, 4 months

4 months. For application and licensing purposes, the FREC rules define a resident of Florida as a person who has resided in Florida continuously for a period of four calendar months or more within the preceding year, regardless of whether the period resided in a recreational vehicle, hotel, rental unit, or other temporary or permanent location.

A Florida real estate license expires in:

4 years

A prospective borrower has an estimated monthly housing expense of $900. The borrower's total monthly obligations are $1,200. Monthly gross income totals $2,950. What is the total obligations ratio? (Round to nearest percent.) -25 percent -30 percent -31 percent -41 percent

41 percent. The solution is $1,200 total monthly obligations divided by $2,950 monthly gross income = .4067 or 40.67% or 41% (rounded to the nearest percent).

The street in front of your house is to be paved at a cost of $45 per foot. The city has agreed to pay 25 percent of the paving cost and will assess abutting properties for the remainder. If your lot frontage on the street is 90 feet, what is your portion of the special assessment?

45 x 90 x .75 = $3,037.50 / 2 = $1,518.75

7,735 divided by .17 - -1,314.95 -131,495 -455 -45,500

45,000

Owner/Developer Pam bought three 200 foot lots on the river for $200 per front foot. She subdivided that land into six riverfront lots and sold them for $30,000 per lot. What was her percent of profit?

50%

An individual on active duty with the U.S. Navy has up until what period of time after discharge from active duty to renew her license? 90 days, 6 months, 1 year, 18 months

6 months. A licensee in good standing who is a member of the U.S. Armed Forces in exempt from the renewal provisions during active duty and for a period of up until six months after discharge from active duty.

A real estate salesman had an arrangement with his broker to keep 60% of the total commission. He sold a house that he also listed for $400,000. His check was $14,400. What was the commission rate?

6%

The SE1/4 of the SW1/4 of the N1/2 and the NE1/4 of the SW1/4 of Section 19 contains how many acres?

640/4/4/2 = 20 640/4/4 = 40 Total is 60 Acres.

A local lender charged 7 percent interest plus 4 points on a conventional mortgage loan. What is the approximate yield on the loan? -7 1/4 -7 3/8 -7 1/2 -7 3/4

7 1/2 percent. The solution is: 4 points x 1/8 percent = 1/2 percent; 7 + 1/2 = 7 1/2 percent yield.

Students must pass the pre-license end-of-coutse exam with a grade of at LEAST what percent? 70,75,80,90

70.

18,768 divided by 25.5 =

736

What is the percentage passing score on the state license exam? 70, 75 80, 90

75

A real estate salesman had an arrangement with his broker to keep 70% of the total commission. He sold a house that he also listed for $250,000. His check was $14,000. What was the commission rate?

8%

315 apartments are rented in a 350-unit apartment building. What is the building's occupancy rate? -75 percent -80 percent -90 percent -95 percent

90 percent. 315 rented units divided by 350 total units = .90 or 90 percent occupancy rate.

A homeowner has a residence with a value of $300,000 and a mortgage debt of $270,000. What is the loan-to-value ratio? -10 percent -20 percent -70 percent -90 percent

90 percent. The solution is: $270,000 loans divided by $300,000 value = .90 or 90%.

A duplex is scheduled to close on September 10. On the first of the month, the seller collected total rent for September amounting to $950. According to the contract for sale and purchase, the buyer is due the rental income for the day of closing. Use the actual number of days in the closing month when determining the time line. Calculate the proration and indicate who is debited and who is credited.

950 / 30 = 31.67 x 20 = $633.33 633.33 debited to seller and credited to buyer

Which is better if you are in a 40% tax bracket?

A 12% after tax return on investment

Which of the following types of depreciation is curable?

A 15 year old house with peeling paint

Which of the following types of depreciation is curable?

A 15 year old house with ugly, peeling paint

What is a broker's price opinion (BPO)?

A BPO is a written opinion of the value of real property. Florida real estate licensees are allowed to prepare and charge for BPOs, provided the BPO is not referred to as an appraisal. Price opinions are often requested by relocation companies and lenders involved in short sales of distressed properties.

The Naval Base in Pensacola is:

A base industry

Which statement BEST describe the provisions of Florida's equitable right of redemption? -The borrower is protected by consumer laws regarding mortgage disclosures. - The borrower has recourse if a lender unfairly imposes the due-on-sale provision -A borrower who is in default, prior to foreclosure, has the right to repay the amount owed plus interest to prevent foreclosure. -A borrower who has defaulted on a mortgage payment may reclaim the foreclosed property if the debt is paid in full within 30 days of the foreclosure.

A borrower who is in default, prior to foreclosure, has the right to repay the amount owed plus interest to prevent foreclosure. Equitable redemption allows the mortgagor to prevent foreclosure from occurring by paying the mortgagee the principal and interest due plus any expenses the mortgagee has incurred in attempting to collect the debt. The right of equity of redemption ends once the property has been sold at a foreclosure sale.

A brokerage firm represents a seller as a single agent. The brokerage can work with the buyer, in the same transaction,

A broker working in a no brokerage relationship capacity with a seller can enter into a listing agreement with that seller and be paid a commission. Similarly, a brokerage firm working in a no brokerage relationship capacity can work with a buyer. FL law does not require that prospective buyers and seller be represented.

When a consumer files a complaint against a real estate licensee that contains facts indicating that a violation of rules of the Florida Real Estate Commission has occurred, the complaint is said to be

A complaint legally sufficient if it contains facts indicating that a violation of any of the following has occurred.

A commercial tenant pays a fixed rent each month. The landlord pays the property taxes, hazard insurance, and maintenance expenses. The tenant has what type of lease?

A gross lease is a lease in which the tenant agrees to pay a fixed rental amount, and the landlord pays all expenses related to the property such as real estate taxes, insurance, and maintenance costs. Residential leases are usually gross leases

Florida real estate licensee cannot promise to re-purchase property back in the future unless:

A guaranteed re-purchase agreement has been approved by the State of Florida

To be granted a variance, a property owner must provide evidence that... -the same treatment has been afforded other owners. -a hardship related to land use exist. -the variance, if granted, will be for the owner's use only. -the land use existed before passage of zoning laws.

A hardship related to land use exists. A variance is permission to build or use to relieve a hardship not caused by the owner.

Money will be paid from the Real Estate Recover Fund when:

A judge rules against an FREC decision in a court of law

What is a corporation?

A legal entity managed and operated by a board of directors

A Florida real estate license is revoked without prejudice when:

A license was issued by mistake

Which statement is FALSE regarding earning continuing education (CE) credit by attending a legal agenda session of the monthly Florida Real Estate Commission (FREC) meeting?

A licensee may not earn credit for attending a FREC meeting if the licensee is on the legal agenda for disciplinary action.

What is conversion?

A licensee's personal use or misuse of client (or customer) monies

A notice of pending legal action is:

A lie pendens

A notice of a pending legal action is:

A lis pendens

A real estate license can remain involuntary inactive for:

A maximum of 2 years

To become the chairman of the Florida Real Estate Commission:

A member is elected by his or her peers

To become the chairman of the Florida Real Estate Commission:

A member is elected by his peers

What is a unilateral contract?

A one-sided agreement

What is an arms length transaction?

A person buying a used car from a stranger

Who can renew their initial Florida real estate license without post license education?

A person that graduated from UF with a degree in Real Estate

Who can renew their initial Florida real estate license without post license education?

A person that graduated from the University of Florida with a 4 year degree in real estate

Which individual is exempt from licensure under Florida Statute 475?

A person who rents lots in a mobile home park

Which statement is FALSE regarding a real estate brokerage corporation? -A corporation that is organized under the laws of Georgia but that does business in the state of Florida is known as a foreign corporation -A sales associate may be appointed as a director of a real estate brokerage corporation -If the only active broker of a brokerage corporation dies, no new brokerage business may be performed by the corporation of a new active broker is designated and registered -At lease one officer or director of the corporation must be licensed as an active broker

A sales associate may be appointed as a director of a real estate brokerage corporation. A sales associate or broker associate may not be an officer or director of a real estate broker corporation.

When a loan is paid off in a lien theory state, which instrument should the lender prepare and give to the borrower?

A satisfaction of mortgage is given by the lender to the borrower when the loan is paid off, must be sent to mortgagor within 60 days. Recording it in the public records shows that the mortgage lien has been removed.

When the equilibrium of the real estate market is upset by excess demand... -builder activity decreases in response to the need. -a buyer's market exists. -a seller's market exists. -demand decreases.

A seller's market exists. When the supply and demand equilibrium is upset by excess demand, a seller's market exists.

A real estate broker who works in a limited capacity for both the buyer and the seller in the same transaction is... -a designated sales associate -a third party intermediary -a transaction broker -bound to fiduciary duties to both the buyer and the seller

A transaction broker. A transaction broker is a broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but who does not represent either party in a fiduciary capacity or as a single agent.

Which of the following does not depreciate?

A vacant lot

List the eight steps on the real estate sales process in the proper order.

1. Prospecting for sellers and listing properties and business 2. Prospecting for buyers 3. Buyer qualification, sales presentation, and negotiation 4. Offer, negotiation process, and signed sale contract 5. Loan application and RESPA disclosures 6. Post-contract requirements: Credit evaluation and property appraisal 7. Loan approval, title search 8. Title closing

Which mortgage clause allows the mortgagee to demand immediate repayment of the entire unpaid loan in the event of default? -Acceleration -Exculpatory -Repayment -Default

Acceleration. The acceleration clause authorizes the mortgagee to accelerate or advance the due date of the entire unpaid balance if the mortgagor fails to fulfill any promises stated in the mortgage instrument.

Which activity is NOT conducted by mortgage lenders? -Originate loans -Servicing loans -Charge interest and loan origination fees -Accept saver's deposits

Accept saver's deposits. Mortgage lenders (mortgage broker companies) are not financial intermediaries, and, as such, do not accept savings deposits.

Which brokerage relationship duty applies to all three types of brokerage relationships? -Loyalty -Using skill, care, and diligence -Accounting for all funds -Confidentiality

Accounting for all funds. Loyalty and confidentiality are single agent duties. The duty to use skill, care, and diligence is a duty of transaction broker and single agent relationships. Accounting for all funds applies to no brokerage, transaction broker, and single agent relationships.

Which term describes the process of land buildup from water-borne rock, sand, and soil? -Accretion -Alluvion -Erosion -Reliction

Accretion.

Which element is NOT required of a valid real estate contract? -Offer and acceptance -Legality of object -Acknowledgment -Consideration

Acknowledgment. Real estate contracts must include consideration, be for a legal purpose, and include a meeting of the minds (offer and acceptance). Real estate contracts are not required to be acknowledged to be valid.

For tax purposes, real estate commission is classified as which type of income? -Passive -Active -Portfolio -Capital gain

Active. Active income includes wages, tips, commissions, and so forth.

Another term for a formal complaint is... -legally sufficient -a consumer complaint -an administrative complaint -prima facie evidence

Administrative complaint. A formal complaint (also referred to as an administrative complaint) is an outline of allegations of facts and charges against the licensee.

What is the remedy for liquidated damages?

Amount of money specified in a contract as penalty for default

What is a growing equity loan?

Amount of payment increase over the term of the loan.

The typical homebuyer today is concerned primarily with the... -style of the house being current. -total cost of the house. -amount of the monthly mortgage payment. -occupancy and vacancy ratios.

Amount of the monthly mortgage payment. The typical homebuyer today is concerned primarily with the amount of the monthly mortgage payment.

Which requirement is one of the elements of a valid real estate contract?

An EARNEST MONEY DEPOSIT is desirable to protect the seller, but it's not required to make a contract valid.

Which statement is FALSE regarding the relationship between price and demand? -An increase in price causes a decrease in demand. -Decrease in price causes an increase in demand. -There is an inverse relationship between price and demand. -An increase in price causes an increase in demand.

An increase in price causes in increase in demand. An increase in price causes a decrease (not an increase) in demand.

A Florida real estate broker can have:

An interest bearing escrow account

A Florida real estate broker can have:

An interest-bearing escrow account

When do property taxes for the pervious year become delinquent?

April 1

The planning commission is part of local government and the members:

Are appointed

The Buyer and the Seller have what kind of relationship?

Arm's length

Which housing is exempt from the familial status protection under the Fair Hosing Act? -All units are occupied by persons 60 years of age or older -At least 75 percent of the units are occupied by one or more persons 50 years of age or older -All of the units are occupied by persons over the age of 18 -At least 80 percent of the units are occupied by one or more persons 55 years of age or older

At least 80 percent of the units are occupied by one or more persons 55 years of age or older. Certain housing for older persons is exempt from the familial status protection under the Fair Housing Act, provided all the units are occupied by persons 62 years of age or older, or at least 80 percent of the units are occupied by one or more persons 55 years of age or older

A real estate broker does NOT have to report to the FREC conflicting demands regarding escrowed property if the escrowed funds are maintained by which method? -Florida credit union -Attorney's trust account -Florida savings association -The broker must report conflicting demands regardless of where the funds are escrowed

Attorney's trust account. Real estate license law governs only broker's escrow accounts held in Florida commercial banks, credit unions, or savings associations. Real estate license law has no authority over title company escrow accounts or attorney escrow accounts. Therefore, if a title company or an attorney is the escrow agent, the broker has no obligation to report an escrow dispute to the FREC account.

Which information must NOT be included in a listing agreement? -Definite expiration date -Owner's signature -Automatic renewal clause -Commission structure

Automatic renewal clause. Chapter 475, F.S., forbids including an automatic renewal clause in a listing agreement.

Which business would be classified as a service industry?

Branch office of a bank is a service industry that services primarily local residents

You want to replace a ceiling fan, and you have removed the old fixture. The wiring to the old fixture consists of three wires: a black wire, a white wire, and a green wire. Which wire is the hot wire? -Black -White -Green -Gray

Black. The hot wire is normally black. If the cable has two hot wires, one is black, and the other is typically red.

A real estate licensee advertises a property for sale that is listed by the company, but fails to disclose in the ad that the property is being advertised by a real estate company. This is know as what type of advertising? Fraudulent, Secretive, Blind, Creative

Blind. Blind advertising is advertising that fails to disclose the license name of the brokerage firm.

Which term describes the discriminatory practice whereby one person induces another person to enter into a real estate transaction by suggesting that the first person may benefit financially from a potential change in the neighborhood with respect to race, sex, religion, color, handicap, or familial status, and that the change may result in the lowering of property values? Steering, Blockbusting, Redlining, Racketeering

Blockbusting. Using the entry, or rumor of the entry, of a protected class into a neighborhood to persuade owners to sell is commonly known as blockbusting.

What is a straight loan?

Borrower makes periodic interest-only payments followed by full payment of principal at the end of loan term.

What is a bilateral contract?

Both parties promise to perform some act

What is the purpose of the property tax disclosure? -Inform homebuyers of how to apply for homestead exemption -Lower property taxes for first-time buyers -Explain to buyers how the property taxes are calculated -Caution buyers that they cannot rely on the seller's property tac history as an indication of buyer's future property tax bill

Caution buyers that they cannot rely on the seller's property tac history as an indication of buyer's future property tax bill. The purpose of the disclosure summary is to caution buyers that they cannot rely on the amount of the seller's property taxes as an indication of the taxes they will be required to pay in the year following the purchase of the property.

A first time homebuyer responds to a for sale-by-owner yard sign and walks through a home for sale. The buyer is not sure what recent prices homes in the neighborhood have been commanding or what is a reasonable offering price. This situation is BEST described as... eminent domain, caveat emptor, real estate give and take, economics

Caveat emptor. Caveat emptor is a Latin term meaning, "let the buyer beware."

Which term is BEST described as a fixture? -Curtains -Refrigerator -Ceiling fan -Clothes washer

Ceiling fan. Curtains, a refrigerator, and a clothes washer are examples of personal property. A ceiling fan is attached to the real property, and is therefore an example of a fixture.

Which unit under the Department of Business and Professional Regulation issues real estate licenses? -Division of Real Estate -Bureau of Education and Testing -Central Intake Unit -Customer Contact Center

Central intake unit. The Central Intake Unit is part of the DBPR's Division of Service Operations and Licensure. The Central Intake Unit processes all DBPR license applications and license fees. Florida statute gives gives the Florida Real Estate Commission the authority to issue licenses; however, in actual practice, the Central Intake Unit of the DBPR performs the day-to-day operations of processing license applications.

Which of the following would a buyer certainly not get at closing?

Certificate of Title

What would a buyer certainly not get at closing?

Certificate of title

Which individual is NOT exempt from holding a Florida real estate license? -An individual who appraises railroad property for tax purposes -Certified public account (CPA) who is employed by a real estate corporation and receives a salary plus bonuses based on real estate transactions -A salaried employee who works as a manager of a condominium complex and rents individual units for periods of one year or less -A person who sells cemetery lots

Certified public account (CPA) who is employed by a real estate corporation and received a salary plus bonuses based on real estate transactions. CPAs, when acting within the scope of their professional duties, are exempt from licensure. However, CPAs are not entitled to collect commission or bonuses for performing services of real estate.

The rules of the Florida Real Estate Commission are found in -Florida Statute 120 -Florida Statute 445 -Chapter 61J2 -Florida Statute 475

Chapter 61J2. The administrative rules of the Florida Real Estate Commission are in Chapter 61J2 of the Florida Administrative Code.

Which property is exempt from property taxes? -Church -Florida Museum of Natural History -Air Force Base -Federal Reserve Building

Church. Exempt properties include property belonging to churches and nonprofit organizations. Immune properties are city, county, state, and federal government buildings.

Electricity travels in a closed loop also referred to as a... -circuit. -trip. -kilowatt. -high-pressure system.

Circuit. Electricity travels in a circuit (or a closed loop).

A licensee who is issued a citation may be ordered to

Citations involve fines that currently range from $100 to $500 per offense and may include other assessments (ex: REQUIRE EDUCATIONAL COURSE ATTENDANCE)

Which law prohibits racial discrimination in the sale or lease of all real property without exception?

Civil Rights Act of 1866 prohibits any type of discrimination based on race in any real estate transaction (sale or rental) without exception.

Which solution is NOT a remedy for the breach of a real estate sale contract?

Claim against the RE Recovery Fund is for a result of license law violations by a licensee ($50k per transaction and mo more than $150K against on licensee involved in mult transactions) the others are remedies for a breach in contract

What is a limited liability company?

Combines the tax advantages of limited partnership and limited liability of corporations

A broker places an earnest money deposit into the broker's business operating account. The broker can be disciplined for which violation? Concealment, Conversion, Commingling, Misrepresentation

Commingling. To mix the money or other personal property of a buyer or seller with a broker's own money or property, or to combine escrow money with personal or business funds, is commingling.

Which statement BEST describes a local planning commission? -The commission members have a planning and land use background. -Commission members are representative to the community's residents. -Commission members are elected officials. -To commission is the final authority in matters relating to planning.

Commission members are representative of the community's residents. Planning commissions are most effective when composed of members who represent all walks of life.

A buyer has breached a real estate sales contract. The seller wants to recover damages in excess of the earnest money deposit. Which remedy for breach should the seller use? -Specific performance -Compensatory damages -Liquidated damages -Rescission on breach contract

Compensatory damages. The party bringing suit seeks an amount of money equal to the extent of loss suffered (compensatory damages).

Which task must a sales associate complete prior to the expiration of the initial sales associate license? -Complete the 14-hour continuing education course -Complete the 45-hour post-license education course -Pay a one-time new license education fee -Submit a real estate activity log

Complete the 45-hour post-license education course. Sales associates must complete 45 hours of post-license eduction before the first renewal of their initial license

What is a citation?

Concerns violations that are of no substantial threat to the public involving a fine that can range from $100 to $1,000.

The subsection in Florida's Growth Management Act that requires that parks, roads, and sewers, and drinking water be available before new development is allowed is referred to as the... -utilities provision. -infrastructure provision. -concurrency provision -level of service provision.

Concurrency provision. The concurrency provision in Florida's Growth Management Act mandates that the infrastructure needed to support additional population exists before new development begins.

A city wants to acquire land for a fair price for the purpose of building a new interstate ramp. The land is acquired through which legal process? -Escheat -Foreclosure -Condemnation -Adverse possession

Condemnation. Eminent domain gives government the right to take land from owner through a legal process known as condemnation, as long as the taking is for a public purpose.

For which feature does an appraiser make an adjustment if it is determined that there was a business relationship between the buyer and seller that may have influenced the sale price? -Financing -Conditions of sale -Market conditions -Economic

Conditions of sale. Appraisers research the conditions of sale to determine if the buyer or seller was under abnormal pressure to buy or sell or if there was a special relationship between the parties to the transaction.

Which phrase may legally be included in an advertisement to sell real estate? -Condominium complex features new children's playground -Cuban ethnic community -Residential area served by a private Catholic high school -Town homes suitable for empty nesters and two-person households only

Condominium complex features new children's playground. It is a violation of Fair Housing Laws to steer people of a particular ethnic or religious group into or away from a neighborhood. It is also a violation of Fair Housing Laws to restrict families with children from living in a community unless that neighborhood qualifies under federal laws as a retirement community.

What is moral turpitude?

Conduct contrary to honesty, good morals, justice, or accepted custom

An applicant has been issued a broker's license. The broker licensee does not want to own her own real estate brokerage business. The licensee went to work selling real estate under another broker. She is BEST described as a... sales associate, broker, broker associate, staff worker

Broker associate. A broker associate is a individual who hold a broker's license but who chooses to register and work in real estate under the direction of another broker.

A strip of land that separates one land use from another is referred to as a(n)... -easement -egress. -buffer zone. -median.

Buffer zone. A buffer zone is a strip of land separating one land use from another.

What control construction and materials?

Building code

A flat roof is also called:

Built up roof

Which activity is performed by a secondary mortgage market participant? -Lend money directly to consumers -Buy existing mortgages -Regulate mortgage interest rates -Initiate new second mortgages and consumer loans

Buy existing mortgages. The secondary mortgage market is an investor market that buys and sells existing mortgages.

A real estate purchase and sale contract is signed by:

Buyer and seller

The Florida Real Estate Commission can not:

Confine a license

Which statement is TRUE regarding the Florida Energy Efficiency Rating Act? -If requested in writing, sellers must furnish buyers with an energy efficiency rating for the structure -Sellers are required to pay the cost of an energy efficiency rating on all homes built prior to 1978 -Most lenders require that an energy efficiency rating be conducted before approving a mortgage loan -Buyers must be given an information brochure notifying the buyer of the right to conduct an energy efficiency rating on the structure

Buyers must be given an information brochure notifying the buyer of the right to conduct an energy-efficiency rating on the structure. the Florida Building Energy-Efficiency Rating Act requires that buyer, before signing the sale contract, receive and information brochure notifying the purchaser of the option for an energy-efficient rating on the building.

A comparable property recently sold for $315,000. Compared with the subject property, the comparable is built of superior materials ($20,000) and the comparable has more square footage ($25,000). What is the adjusted sale price of the comparable?

CBS vs. CIA Comp Better Subtract 315,000 - 20,000 - 25,000 = 270,000

The earnest money deposit normally appears on the closing statement as a

CREDIT TO THE BUYER ONLY - the buyer pays the binder deposit when the contract info is entered into - entered as a credit to the buyer since this portion of the purchase price has already been paid and will not be paid again. Since seller hasn't received the money, it's not shown on the seller's statement. The seller is still owed the entire amount of the purchase price.

Lynn Amherst is a sales associate for Excel Realty. Lynn is preparing a classified ad for a listed property. The company's phone number is 222-1010. Lynn's home phone number is 333-2020. Which excerpt conforms to the rule regarding advertising?

Call Lynn Amherst, Excel Realty 333-2020 (cell).

A tenancy at will:

Can be terminated by either party giving notice to the other, Can be a month to month rental agreement and either party can terminate with 15 days notice to the other party and Can be written or oral

An applicant for a mutual recognition:

Can not live in Florida

Ginnie Mae mortgage back securities:

Carry the full faith and credit guarantee of U.S. Government

Ginnie Mae mortgage back securities:

Carry the full faith and credit guarantee of US. Government

Which accounting term refers to the total amount of money generated from an investment after the expenses are paid? -Assets -Capital -Equity -Cash flow

Cash flow. Cash flow is the total amount of money generated from an investment after expenses have been paid.

Lead based paint:

Causes neurological damages if eaten

Lead based paint:

Causes neurological damages, to children, or adults that lick lead based paint off walls

When does the current tax year end?

December 31

The Federal Reserve System can increase the money supply by:

Decrease reserve requirements

A comparable property has one more bathroom than does the subject property. The appraiser estimates the value of an extra bath at $30,000. How should the adjustment be entered on the reconciliation? -Increase the value of the subject property by $30,000 -Decrease the value of the subject property by $30,000 -Increase the value of the comparable by $30,000 -Decrease the value of the comparable by $30,000

Decrease the value of the comparable by $30,000. All adjustments must be made to each comparable property, not to the subject property. If a comparable is superior on a given feature, a downward adjustment is made to the comparable property (subtract the value of the difference).

A developer transfers to the city privately owned street in a subdivision with the agree that the city will maintain the streets in the future. This process is known as... land acquisition, entrepreneurship, dedication, eminent domain

Dedication. Dedication is the gift of land by owner, in this case a developer, to a government body for a public use.

Tax advantages of owning a home do NOT include

Deductions of hazard insurance expense on a principal residence. Included advantages: 1. Mortgage interest 2. Property taxes 3. Interest on Home Equity 4. Mortgage origination fees (points) 5. 1st time homebuyers (IRA contribution up to $10K) 6. Exclusion from gain on sale of principal residence up to $250K for single person, $500K for married couple filing jointly

Which term applies to a nonjudicial procedure whereby a borrower who is in default on the mortgage loan transfers title of a property to the lender? -Reinstatement -Title theory -Deed of trust -Deed in lieu of foreclosure

Deed in lieu of foreclosure. The defaulting borrower gives title (the deed) to the lender to avoid judicial foreclosure.

Which type of alienation is voluntary?

Deed is considered voluntary because it's under the owner's control. Deed is the written instrument to convey an interest in real property.

Which instrument can be used by a property owner to control how a particular parcel of real property may be utilized by future property owners? Restrictive covenants, Deed restrictions, Zoning code, Special exception

Deed restrictions. Deed restrictions are placed by a owner who has created a restriction on future owners of the parcel of real estate.

Which action can result in the foreclosure of a homesteaded property? -Delinquent property taxes on the homesteaded property -Unpaid medical expenses -Judgement lien resulting from a lawsuit related to an automobile accident -Unpaid gambling debt

Delinquent property taxes on the homesteaded property. Homesteaded property is protected from forced sale for debts owing to personal loans, credit card debt, and so forth. The protection does not prevent foreclosure for nonpayment of property taxes, special assessments, mortgages, vendors' liens, or construction liens secured with the homesteaded property.

Residential zoning is designed to regulate... -intensity. -frequency. -density. -all of the above.

Density. Residential zoning regulates density (number of homes per acre).

You are interested in adding additional roof insulation to your home to reduce your monthly electrical bill. Which government agency establishes minimum recommended R-values specific to your local area? -Department of Energy -Department of Housing and Urban Development -Fannie Mar -Environmental Protection Agency

Department of Energy. The U.S. Department of Energy (DOE) has established minimum recommended R-values specific to ZIP code areas.

From which source can a broker obtain a copy of the equal housing opportunity poster for a new real estate office? -Department of Business and Professional Regulation -Florida REALTORS -Department of Housing and Urban Development -Council on Fair Housing Administration

Department of Housing and Urban Development

The ultimate decision makers in the marketplace are... -salespersons. -producers. -manufacturers. -consumers.

Consumers. The consumer is the individual who exercises freedom of choice in the marketplace and, therefore, is the real decision maker.

A seller receives an offer from a buyer to purchase a property for $300,000. The seller changes the price to $320,000 and submits it to the buyer. Which term described the price change? -Annulment -Counteroffer -Meeting of the minds -Breach of contract

Counteroffer. When the offeree (person receiving the offer) alters the terms of the original offer, it creates a counteroffer.

Which group insures federally chartered savings associations? -Bank Insurance Fund -Deposit Insurance Fund -Office of Thrift Supervision -Federal Housing Finance Board

Deposit insurance fund. The Deposit Insurance Fund insures both federally chartered banks and savings associations.

Local businesses within a community such as a bird feed store or a convenience store and referred to as which type of property? -Origin -Export -Import -Destination

Destination. Destination properties include service industries that support the needs of a local community, such as local repair shops, barbershops, local real estate agencies, and financial institutions.

Which document must be given to prospective purchasers only if purchasing a condo from a developer of 20 or more new residential condominium units?

Developers of 20 or more new residential units must also prepare a PROSPECTUS and file it which summarizes the major points detailed in the condo docs.

Which interest rate is charged member banks for borrowing money from the Federal Reserve? -Discount -Prime -Usury -Consumer

Discount. The discount rate is the interest rate charged member banks for borrowing from the Fed.

What is probation?

Allows licensee to continue practicing real estate under the guidance of FREC while completing specified conditions

Define littoral rights.

Associated with land abutting tidal bodies of water such as an ocean, sea, or lake

In a joint tenancy:

All tenants must take title at the same time

A holder of a tax certificate may request a tax deed... -on January 1 of the following year. -after November 1 when taxes for the previous year become delinquent. -after holding the certificate for at least two years. -anytime up to ten years after the tax certificate was originally issued.

After holding the certificate for at least two years. The holder of a tax certificate can force a public auction of the property after two years (but no later than seven years) by requesting a tax deed.

What is required of all nonresident license applicants? -U.S. citizenship -Pay additional out-of-state nonresident license fee -Agree to refer all out-of-state clients to an affiliate broker located in the state of Florida -Agree to the irrevocable consent to service section on the license application

Agree to the irrevocable consent to service section on the license application. If a nonresident applicant or licensee wishes to become licensed in Florida, the applicant must agree to the irrevocable consent to service section on the application form.

What is a general partnership?

All members participate in operation and management of business

The combining of two or more adjacent properties into one tract to increase the usability and value of the resulting consolidation is:

Assemblage

A developer combines two adjacent parcels into a single parcel, making the property more suitable for development. Which appraisal term describes the process. -Plottage -Assemblage -Appurtenance -Attachment

Assemblage. Assemblage is the combining of two or more adjoining properties into one tract: the process of consolidating properties. This is usually done to increase the usability and value of the resulting consolidation.

All of the resources of a business, including tangibles and intangibles, are referred to as the... -net worth. -capital. -gross income. -assets.

Assets. Assets are the entire resources of a business, include tangibles and intangibles such as accounts and notes receivable, cash, inventory, equipment, real estate, and goodwill.

The process of transferring ownership of a mortgage from one company to another is accomplished by executing which instrument? -Declaratory judgement -Assignment of mortgage -Release of mortgage -Estoppel certificate

Assignment of mortgage. When ownership of a mortgage is transferred from one company to another, it is called an assignment. This process is accomplished by executing an assignment of mortgage.

Define riparian rights.

Associated with land abutting the banks of a river, stream, or other watercourse.

A lease calls for annual minimum rent of $14,500 plus 3 percent of annual gross sales in excess of $350,000. What is the annual rent for the year if the annual gross sales are $450,000?

Base: 14,500 Annual Gross: 450,000 - 350,000 = 100,000 x .03 = $3,000 Total = 14,500 + 3,000 = $17,500

Why does the prime meridian and the base line intersect in Tallahassee?

Because this was the point dictated by the Federal Government

A Florida real estate salesman must turn escrow money over to his broker:

Before the end of the business day following the day he received the money

What process is taken when land is needed for public use? Who is the property then taken by?

Process - Eminent domain Taken by - Government agency

A marketing tool used by real estate licensees in the process of soliciting for listings that is intended to help sellers determine an asking price is known as a(n)... Appraisal, Comparative market analysis, Federally related transaction, Appraisal report

Comparative market analysis. Real estate licensees may help potential sellers determine an asking price by preparing a comparative market analysis (CMA). A CMA is a marketing tool and may not be referred to or be represented as an appraisal.

Which method of estimating building costs relies on the use of cost-calculation publications? -Quantity survey -Unit-in-place -Comparative square footage -Age-life

Comparative square-foot. In this method, the cost on a square-foot basis is compared for a similar structure, sometimes using cost-calculation publications.

What process is taken when a person dies intestate with no heirs? Who is the property taken by?

Process - Escheat Taken by - State

The brokerage relationship disclosure requirements in Chapter 475, Florida Statutes, do NOT apply to which transaction?

Contract to purchase a shopping center

A sales associate fails to turn over to his broker rental income paid by a tenant. The sales associate spends the money for his own personal use. Which legal term applies to the situation? Fraud, Breach, Concealment, Conversion

Conversion. Conversion is the unauthorized control or use of another's personal property.

Which business entity may NOT register as a real estate brokerage entity? -Cooperative association -Limited liability company -Sole proprietorship -Limited partnership

Cooperative association. A cooperative association is allowed to conduct commercial business and to convey, sell, or buy its own property, but it cannot be registered as a real estate broker.

Thoroughfare studies are normally a... -city project. -county project. -state project. -cooperative project.

Cooperative project. Thoroughfare studies are normally a joint venture involving city, county, and state transportation departments and regional planning commissions.

A proprietary lease is associated with a... -tenancy for years. -tenancy in common. -time-share. -cooperative.

Cooperative. The purchase of stock in a cooperative entitles the purchaser to a proprietary lease and the right to occupy a unit.

The barometer of the real estate market is considered to be the... -change in consumer income. -cost and availability of credit. -number of housing starts. -change in consumer tastes.

Cost and availability of credit. The barometer of the real estate market is considered to be the cost and availability of credit.

Which criteria below is NOT used to determine whether something is real or personal property? -Intent of the parties -Method of annexation -Cost of the item -Relationship of the parties

Cost of the item. Courts generally use four tests to decide if an item is a fixture (i.e., real property, not personal property). The four tests are: (1) intent of the parties; (2) relationship between the parties; (3) method of annexation; (4) adaptation of the article

Define accretion.

Process of land buildup from water-born rock, sand, and soil

The Tax Reform Act of 1997:

Created an exclusion on the first $250,000 of capital gain tax on sale of a personal residence

How is the buyer's binder deposit entered on the closing statement? -Debit to buyer only -Credit to buyer only -Debit to seller and credit to buyer -Debit to buyer and credit to seller

Credit to buyer only. The binder deposit (earnest money deposit or good faith deposit) is entered as a credit to the buyer (there is no entry on the seller's side).

Which type of lot allows extra space in the backyard and is considered more "quiet?" -Key -Interior -Cul-de-sac -T-intersection

Cul-de-sac. Lots located on a cul-de-sac are desirable because they are usually more spacious, providing ample room for backyard features.

A firm's working capital customarily defined as the difference between the firm's total... -current assets and total current liabilities. -current liabilities and total cash on hand. -short-term liabilities and total cash on hand. -long-term liabilities and total accounts receivable.

Current assets and total current liabilities. Capital is the net worth of a business. It is the amount by which the assets exceed the liabilities.

Which encumbrance is NOT a lien? -Mortgage -Construction -Easement -Judgement

Easement. Mortgage liens and construction liens are specific liens. A judgement is a general lien. Easements encumber the property buy do not result in liens against the property.

A building is valued at $135,000 with an estimated 25-year useful economic life. The building has an effective age of five years. Using the lump-sum age-life method, find the depreciated value of the building.

Effective Age / Total Economic Life x Reproduction Cost New 5 /25 x 135,000 = 27,000 accrued depreciation

Which type of age is MOST relevant in the cost-depreciation approach? -Actual -Structural -Effective -Economic

Effective. Effective age in the age indicated by a structure's condition and utility.

Which property is defined as a residential real estate under Chapter 475, Florida statutes? Eight acres of agricultural property, Local elementary school, Fifty-unit apartment complex, Neighborhood grocery store

Eight acres of agricultural property. Residential real estate is defined in Chapter 475, F.S., as four or fewer residential units, or agricultural property of ten or fewer acres.

What is the maximum number of consecutive years a Commissioner may serve on the Florida Real Estate Commission? Two, Four, Six, Eight

Eight. A Commissioner may not serve more than two consecutive four year terms.

In municipalities with planning commissions, the final authority in planning matters is the... -planning commission chairperson. -professional staff director. -elected city government officials. -planning commission support staff supervisor.

Elected city government officials. The planning commission is responsible for planning, but the elected government must make the final decision based on recommendations.

Which restriction is always a public restriction? -Restrictive covenants -Easement -Lease by a government agency -Eminent domain

Eminent domain. Restrictive covenants, easements, and leases are private restrictions; police power, eminent domain, and taxation are government restrictions.

For what period of time must a broker maintain business records, including escrow account records, and make them available to audit by the DBPR? -90 days if no escrow funds were collected -Six months if escrow funds were collected but the contract failed to close -Two years regardless of whether the contract closed -Five years regardless of whether trust (escrow) funds were collected

Five years regardless of whether trust (escrow) funds were collected. Brokers must maintain records of real estate transactions for five years regardless of whether escrow funds are pledged.

What is the usual action of the Commission if a real estate licensee if found to have violated the Uniform Standards of Professional Appraisal Practice as defined in Florida license law? -$5,000 administrative fine -Reprimand -$500 citation -Five-year suspension up to revocation

Five-year suspension up to revocation. Rule 61J2-24.001, Florida Administrative Code, sets out the disciplinary guidelines that may be imposed by the Commission. If a real estate licensee violates the Uniform Standards of Professional Appraisal Practice, the Commission may impose a penalty of a five year suspension to revocation of the license.

Which information in the advertisement presented below is considered to be a triggering term? New waterfront town homes are nearing completion. These gorgeous homes would make a perfect second home or vacation property. Financing is available at competitive mortgage rates. Fixed rate mortgages are available with as little as 10 percent down. Jumbo mortgages are also available. Sales prices begin in the low $700,000s. -Financing available at competitive mortgage rates. -Fixed rate mortgages are available with as little as 10 percent down. -Jumbo mortgages are also available. -Sales pries begin in the low $700,000s.

Fixed rate mortgages are available with as little as 10 percent down. Triggering terms include the amount or percentage of any down payment.

You are walking through a seller's contemporary-design home. There are windows set high into a loft area, that are NOT designed to be opened. They function simply to bring light into the loft. What window type does this describe? -Jalousie -Casement -Fixed -Hopper

Fixed. Fixed windows are also called picture windows. They are fixed in their location and cannot be opened.

Which Florida law prohibits a lender from refinancing a loan to the same borrower within the first 18 months of making a loan, if doing so does NOT reasonably benefit the borrower? -Florida Fair Housing Act -Florida Fair Lending Act -Florida Deceptive and Unfair Trade Practices Act -Florida Consumer Credit Protection Act

Florida Fair Lending Act.

The sales associate that worked with the buyer in the transaction sets up an appointment with the buyer to visit them six weeks after the sale. The sales associate routinely makes a visit after the title closing to thank the buyer for choosing her real estate company and to extend an offer to help with the buyers' future real estate needs. What type of service is the sales associate providing? Final walk-through and property inspection, Delayed customer contact, Follow-up, Door-to-door sales

Follow-up

What is the final step in the real estate sale process?

Follow-up

An outline of the charges against a licensee is called?

Formal complaint

What is the statute of limitations (in years) for parol contracts? -Two -Three -Four -Five

Four. The statute of limitations for parol (oral) contracts is four years.

Which mortgage plan is BEST suited to people who expect significant increases in income within the next few year? -Reverse-annuity -Growing-equity -Wraparound -Home equity

Growing-equity. A growing-equity mortgage rapidly increases the equity in a property by increasing the monthly payments by a certain percentage each year and applying the increase to the principal.

What is culpable negligence?

Guilty of failing to use the care a reasonable person would exercise

Which document must be given to the borrower at LEAST one day before the title closing if requested by the borrower? -HUD-1 settlement statement -Special information booklet -Good faith estimate of closing costs -Servicing disclosure statement

HUD-1 settlement statement. Borrowers may request a copy of the HUD-1 statement one day before the actual settlement.

A VA loan:

Has no legislated maximum loan amount

A Florida real estate license:

Has the expiration date on it, Expires biennially and Serves as prima facie evidence that the holder is properly licensed

In a joint tenancy:

Has the right of survivorship and owners acquire interest at the same time

Which item would be classified as a fixed expense in the calculation of net operating income?

Hazard Insurance is included as part of a fixed expense (also ppty taxes) Mortgage payments are not considered an opex because they are not directly associated with the maintenance and operation of the property.

What controls maintenance and sanitation?

Health ordinance

Which violation is a third-degree felony? -False advertising -Broker fails to register a trade with the Commission -Sales associate fails to deliver an earnest money deposit to her broker before the end of the next business day -Individual performs real estate services for compensation without a real estate license

Individual real estate services for compensation without a real estate license. It is a third-degree felony for an individual to perform real estate services for compensation without real estate license.

When property is bought subject to the mortgage:

Intangible tax on the mortgage is not paid, The grantee is not responsible to pay the note and The mortgagee could sue the original owner for a deficiency judgment

A contract specifies the amount of money that must be paid if the buyer defaults. Which remedy for breach does this describe? -Compensatory damages -Liquidated damages -Good consideration -Valuable consideration

Liquidated damages. Frequently the parties will stipulate an amount of money, known as liquidated damages, to be paid in case of default by the buyer.

Which list of appraisal methods is unique to the appraisal of business enterprises?

Liquidation analysis, reproduction cost analysis, and income capitalization analysis (and comparable sales analysis)

Which term describes an instrument that is filed to give notice of pending legal action involving a parcel of real estate? -Divorce decree -Escheat -Lis pendens -Judgment

List pendens. When litigation is initiated involving a specific parcel of real property, a lis pendens (notice of pending legal action) is filed.

Which characteristic applies to both business brokerage and real estate brokerage? -Goodwill -Going concern value -Long-term liabilities -Shares of stock

Long-term liabilities. Real estate brokerage and business brokerage typically involve long-term financing.

Lori Sammis is a licensed real estate sales associate. Under which name may she register and be licensed? -Excellent Service Realty -Lori Sammis, PA -Lori Sammis and Company -Lori Sammis ad Excel Realty

Lori Sammis, PA. Sales associate must have their licensed issued in their legal name. A sales associate may not be licensed or registered under a trade name. However, for tax purposes, a sales associate is allowed by law to form a professional (PA), ad in this case, the DBPS will issue the license in the licensee's actual (legal name and include the entity designation (PA) after the licensee's legal name

What is the original document used by the federal or state government to transfer land to a private individual? -Patent -Constitution -Mortgage -Government note

Patent. A patent (the original deed) is a certificated issued by the federal or state government that transfers land to a private individual.

What is a reverse-annuity loan?

Payments are made by the lender to the borrower.

Which type of lease is based on income from the tenant business? Gross, Net, Percentage, Variable

Percentage. The tenant pays rent based on gross sales received by doing business of the leased property.

What is an amortized loan?

Periodic, equal payments made over time.

Which type of deed is used when an individual is appointed by order of a court to settle the estate of a deceased individual? -Personal representative -Quitclaim -Committee -Special warranty

Personal representative. A personal representative's deed is used to formalize and record the transfer of title when an individual is either appointed by a will or by a court to settle the estate of a deceased person.

A real estate broker has been hired to manage an apartment complex on behalf of the landlord. How must the broker as agent handle the security deposits and advance rent?

Place the funds in an interest-bearing account in a Florida bank and pay the tenant 5 percent interest (separate interest-bearing FL bank account and pay the tenant at least 75% of any annualized average interest rate or 5% per year simple interest

The legal right to enact zoning laws is derived from... -police powers. -public policy. -property taxation. -all of the above.

Police powers. The legal right to enact zoning laws and building codes is derived from governmental rights known as police powers.

The MOST basic of all the background planning studies is the... -economic base study. -land-use study. -community facilities study. -population study.

Population study. The most basic of all the background planning studies is the population study.

A type of frame construction that allows for large spans between supporting side walls is... -balloon frame. -post-and-beam construction. -platform construction. -pier frame.

Post-and-beam construction. Because the posts provide some of the ceiling support, rooms can be constructed with larger spans between the supporting side walls.

A new car has a sticker amount of $31,000. This figure is the car's -cost. -price. -investment value. -market value.

Price. Price refers to the amount of money for which a good is actually sold.

A real estate license that is stamped with the official seal of the State of Florida serves as what time of evidence that the individual is licensed? -Notarized, Prima facie, Recorded, Public

Prima facie. The seal, when affixed to official documents becomes prima facie evidence that the document is authentic. Prima facie is a good legal term used to refer to evidence that is good and sufficient on its face.

FHA requires the borrower to pay which items as part of the monthly payment? -Taxes and hazard insurance only -Principal, interest, taxes, and mortgage insurance premium only -Principal, interest, taxes, hazard insurance, and monthly insurance premium, if applicable -Principal, interest, taxes, and funding fee

Principal, interest, taxes, hazard insurance, and monthly insurance premium, if applicable. FHA borrowers are charged an annual mortgage insurance premium added to the monthly mortgage payment. Funding fees are associated with VA mortgage loans.

What process is taken when there is open, notorious, continuous, hostile, and adverse use of another's property for a prescriptive period of time? Who is the property then taken by?

Process - Adverse possession Taken by - Adverse possessor

What process is taken when a person dies intestate with heirs? Who is the property then taken by?

Process - Descent/probate Taken by - Heirs

Assume on February 28, 2011, an initial real estate license was issued. What date will this license expire? -February 28, 2013 -March 31, 2013 -September 30, 2012 -September 30, 2012

September 30, 2012. Real estate licenses expire on either March 31 or September 30. The expiration fate of the initial is the date (March 31 or September 30) that provides at least 18 months of initial licensure but does not exceed 24 months.

Which information must be given to a prospective borrower within three business days of making application for a mortgage loan? -Financial statement of the lending institution -Servicing disclosure statement -Terms of repayment of the mortgage loan -List of consumer complaints filed within preceding 12-month period

Servicing Disclosure Statement. When borrowers apply for a mortgage loan, they must be given, within three business days, the following three disclosures: (1) special information booklet; (2) good faith estimate of closing costs; and (3) a servicing disclosure statement

Which disclosure statement informs a prospective borrower that a lender intends to transfer the mortgage loan to another lender once the loan is made? -Property record -Mortgage loan transfer -Servicing disclosure -Mortgage lender affiliate business relationship

Servicing disclosure. RESPA requires this disclosure to be made at the time of loan application or within three business days.

Lenders sometimes handle the loan payment collection and record keeping associated with mortgage loans known as... -open-market operations. -leverage. -loan origination fees. -servicing the mortgage.

Servicing the mortgage. Some lenders "service" (handle the loan payment collecting and record keeping) the mortgages they originate.

A purchaser of subdivided lands of 25 or more lots had the right to cancel the purchase agreement within how many days? Three, Five, Seven, Ten

Seven. Under the Interstate Land Sales Full Disclosure Act, purchasers who receive a copy of the property report prior to signing the contract may cancel the agreement within seven days.

How do forest trees on real property become personal property? -Title transfer -Severance -Adaptation -Attachment

Severance. Real property becomes personal property by the act of severance.

Which type of roof construction involves one plane at a steep angle? -Flat -Shed -Mansard -Gambrel

Shed. Shed roofs consist of a single steep plane. This type of roof construction is often used in contemporary architecture.

Investment in an apartment building is regarded as economically feasible if it... -shows an appropriate return on investment. -shows an appropriate return on the investment and recovers the invested capital. -does not show a negative cash flow. -does not show a negative after-tax cash flow.

Shows an appropriate reutn on the investment and recovers the invested capital. Investment in real estate is economically feasible is it shows an appropriate return on the investment and recovers the invested capital.

Physiographic studies reveal the... -physical location of shopping centers and subdivisions. -transportation network structure. -surface and subsurface structure of land. -density and intensity of structure of population.

Surface and subsurface structure of land. Physiographic studies describe the physical structure of land.

The four characteristics of value do NOT include which characteristic? -Demand -Utility -Surplus -Transferability

Surplus. The four characteristics of value are demand, utility, scarcity, and transferability. DUST.

Mike Meyers, licensed real estate broker, is a sole proprietor who used the trade name #1 Service Realty. His wife Susan Myers works with Mike and is a licensed brokers associate. Of the following pieces of information that appear on the broker's entrance sign, which is optional under Florida license law? -Mike Meyers -#1 Service Realty -Susan Meyers, Broker Associate -Licensed real estate broker

Susan Meyers, Broker Associate. The name of sales associates and broker associates are not required to appear on the entrance sign. If the names of associates do appear on the entrance sign, the associate's license status must appear next to the name.

Susan Walters is a licensed real estate sales associate. Her sales associate license was issued as Susan Walters (LLC). Which statement is TRUE regarding this situation? -Susan has formed a real estate brokerage business as a limited liability company (LLC) -Susan must partner with a real estate broker in order for her license to be issued this way -Susan is in violation of Florida license law -Susan has form a limited liability (LLC) for income tax purposed only, and is employed by and registered under either a licensed real estate broker or an owner-developer

Susan has formed a limited liability company (LLC) for income tax purposes only, and is employed by and registered under either a licensed real estate broker or an owner-developer. Broker associates and sales associates must have their licenses issued in their legal names. A sales associate is allowed by law o form as a limited liability company. The DBPR issues the license in the licensee's actual name, and includes the entity designation on the face of the license. The LLC may be formed for income ax purposes only, and is not a real estate brokerage entity.

Under which situation does a license become ineffective? Canceled, Revoked, Expired for 26 months, Suspended

Suspended. An ineffective license occurs when a license is inactive or suspended.

Placement of the windows is most important on which type of lot if the homeowner is concerned about the possibility of vehicular headlights shining into the front windows?

T-Intersection (open view down the street, lights shining into window and possible danger from speeding runaway cars)

A tenant, unable to contact the landlord or the landlord's representative prior to the expiration of a written lease, continues to pay the rent and occupy the premises after the lease expired. The tenant has a tenancy

Tenancy at Will - if the tenant's holding over is continued with the written consent of the lessor, the tenancy becomes a tenancy at will under FL law. Tenancy at Sufferance - without the consent of the landlord

A tenant, after rightfully being in possession of a premises, without the consent of the owner, continues possession. This situation creates a(n)... -tenancy at will. -tenancy at sufferance. -fee simple estate. -estate for years.

Tenancy at sufferance. A tenancy at sufferance occurs when a tenant stays in possession of a property beyond the ending date of a legal tenancy, without the consent of the landlord.

Which type of estate is created when a husband and wife take title in both of their names? -Joint tenancy -Tenancy by the entireties -Tenancy in common -Estate for years

Tenancy by the entireties.

Three brothers join together to purchase property. The brothers want their interest in the property to go to their spouses in the event of their deaths. They have created which type of estate or tenancy?

Tenancy in Common (no right of survivor ship, heirs inherit)

Property held as a tenancy by the entireties becomes which type of estate in the event of divorce? -Separate estate -Post-marital tenancy -Tenancy in common -Life estate

Tenancy in common. In the event of a divorce, the tenancy by the entireties is ended and a tenancy in common results.

Who must receive the lead-based paint disclosure? -Buyers of all single-family homes -Tenants and buyers of all residential property -Tenants and buyers of all residential property built prior to 1978 -Tenants and buyers of all rental property if a family member is under the age of two

Tenants and buyers of all residential property built prior to 1978. The lead-based paint disclosure law applies to buyers and tenants of residential property build proper to 1978.

Three individuals want to develop and sell a parcel of land. Each of the individuals has a spouse and children. The three individuals want to take title to the property in such a way that an owner's family would inherit part of the property if the property owner died. How should the individuals take title to the land? -Joint tenants -Separate property -Tenants in common -Designated beneficiary estate

Tenants in common. In a tenancy in common, the interest of each common tenant descends to the legal heirs.

When a person dies intestate with no heirs:

Their real estate passes to the Florida government through a process call escheat

If the title to a property is marketable:

There are no title defects

The minimum escrow deposit is:

There is no minimum

Which requirement does NOT have to be accomplished before deed can be recorded? -Acknowledgement -Notarized -Three witnesses -Signature

Three witnesses. Before a deed can be recorded, it must first be acknowledged by the grantor and witnessed. The acknowledgment must be certified by a notary public. Two witnesses (NOT three) are required. The notary may serve as one of the witnesses.

Title VIII of the Civil Rights Act of 1986 does NOT apply to which type of property? -Multifamily dwellings of five or more units -Three-unit dwelling in which the owner resides in one of the units -Privately-owned residential property offered for sale or lease through a real estate licensee -Government-owned residential property

Three-unit dwelling in which the owner resides in one of the units. Title VIII of the Civil Rights Act (Fair Housing Act) covers multifamily dwellings of four or fewer units if the owner resides in one of the units. I this case, there are three units, and the owner resides in one of the units. Remember, however, that racial discrimination is illegal in any real estate transaction under federal law.

Jones vs. Meyer is a famous lawsuit that:

Upheld the Civil Rights Acot of 1866

Jones vs. Meyer is a famous lawsuit that:

Upheld the Civil Rights Act of 1866

Which expense does the VA charge veteran borrowers in order the help the government defray the cost of foreclosures? -Up-front mortgage insurance -User's fee -Discount points -Mortgage insurance premium

User's fee. The VA requires a user's fee (or funding fee) to help the government defray the cost of foreclosures.

A Lender's Title Insurance policy:

Will transfer if the mortgagee assigns the mortgage to another mortgagee

A mortgagee's title insurance policy:

Will transfer if the mortgagee assigns the mortgage to another mortgagee

Which alienation is voluntary? -Descent -Escheat -Eminent domain -Will

Will. Voluntary alienation includes transfer of property by means of deed or will.

Which action does NOT terminate a single agent brokerage relationship with the seller? -Fulfillment of the brokerage relationship's purpose -Death of a seller's broker -Bankruptcy of the principal -Withdrawal of an offer to purchase

Withdrawal of an offer to purchase. The brokerage relationship exists between the brokerage company and the seller. Therefore, withdrawal of an offer to purchase does not terminate the single agent relationship entered into with the seller.

A sales associate moved from Lake City, Florida to Key West, Florida. What action must the licensee take? -Submit the irrevocable consent to service agreement -Notify the FREC within 60 days of the change in residency -Within 10 days of moving, inform the DBPR in writing of the change of address -File a new application for licensure

Within 10 days of moving, inform the DBPR in writing of the change of address.

Which is not an acceptable method to resolve a disputed escrow deposit?

Writ of mandamus

What is the remedy for rescission on breach of contract?

Wronged party may sue for cancellation of the contract

What is the remedy for specific performance?

Wronged party may sue to get court to force other party to perform as stated in the contract

What is the remedy for compensatory damages?

Wronged party sued for an amount equal to the extent of the loss suffered

A developer advertises homes for sale with a total down payment of $2,000. A qualified buyer offers to pay the $2,000 down, but the developer states that the $2,000 down homes are all sold. Is this transaction covered under Truth in Lending Act?

Yes, because this is an example of bait-and-switch advertising, and it is illegal. TILA/Reg Z makes "Bait and Switch" advertising a federal offense.

A developer of a new residential subdivision hires a sales staff to sell homes. The sales staff receives a base salary plus 1 percent of the sale price of each home they sell. Are the people who sell these homes for the developer required to hold real estate licenses? -No, owner-developers are not regulated by the real estate law -No, the sales staff is paid a salary so they are not required to hold areal estate license -Yes, all individuals who sell real property for owner-developers must hold a real estate license regardless of the compensation structure -Yes, the sales staff must hold real estate licenses because they are partially compensated based on actual sales

Yes, the sales staff must hold real estate licenses because they are partially compensated based on actual sales. An owner-developer's staff must hold active real estate licenses in order to be paid a commission or other compensation based on actual sales (that is, on a transactional basis). The sales staff is exempt from real estate licensure if paid strictly on a salaried basis