FLORIDA REAL ESTATE 63 HOUR PRACTICE TEST
A 10-foot river runs along the border of Royce's property. What rights govern his use of this water? riparian rights
Yes, riparian rights govern the rights of people possessing land along flowing water, like rivers.
Which of these is a fee simple condition subsequent estate? Because the title automatically reverts, this is describing a fee simple DETERMINABLE estate. Remember that fee simple condition SUBSEQUENT estates require the person to sue to get the property back if the deed conditions are violated. Drew, with the gas lamp mansion, has the fee simple condition subsequent estate.
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Johan has a monthly income of $5,000. He also has a monthly student loan payment of $500. The mortgage he wants to take out limits the borrower's debt-to-income ratio to 43%. What is the highest monthly payment Johan will be allowed? It looks like you added the student loan payment of $500. 43% of $5,000 is equal to $2,150. If you subtract Johan's student loan debt from $2.150, you get the highest monthly payment Johan will be allowed, which is $1,650.
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Which answer describes something that: Does not have to conform to USPAP standards Is often utilized in the foreclosure process Is less costly than comparable options BPO
A BPO does not have to conform to USPAP standards, is often utilized in the foreclosure process, and is less costly than comparable options.
Savannah took out a $500,000, 30-year amortized loan. Her monthly payment is $2,500. How much will she end up paying in interest after the 30 years of paying the loan? Looks like you found the total loan cost instead of the total interest paid. Savannah will end up paying $400,000 in interest over the life of the loan. This is found by multiplying the monthly payment amount ($2,500) by the total number of payments made (360), and then subtracting the original loan principal ($500,000) from the total loan cost ($900,000).
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Hydra purchases a house for $300,000. A year later, she sells her house for $250,000. What is Hydra's percentage loss? You may have calculated the wrong part, let's check: First, find the amount lost on the sale. $300,000 - $250,000 = $50,000. Now, use Part ÷ Total = Percentage. This results in $50,000 ÷ $300,000 = 0.17, or 17% loss.
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Raul is buying a home that is part of an HOA. His lender wants to verify that there are no liens from the HOA on the property. What would they most likely request from the HOA? An assumption clause allows a buyer to take over a loan from a seller with the lender's permission. An estoppel certificate (or estoppel letter) is used to verify the loan amount in an assumption or verify that there are no liens from an HOA.
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Determine which of the following scenarios involves a use variance. This scenario is an example of a legal nonconforming use turning into an illegal nonconforming use. Lucinda getting permission to open her coffee shop in a residential zone involves a use variance
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Cathy, a non-license holder, works for a cemetery as a salesperson. In addition to her salary, she gets an annual bonus for every cemetery lot she sells. Is Cathy in violation of Chapter 475 F.S.? Why or why not? Being a salaried employee is not relevant. Cemetery lots are not considered real property in Florida, so Chapter 475 doesn't apply to Cathy.
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Fred wants to live in the guest room of Barney's flagstone townhouse. Barney verbally agrees to let Fred move in — even though there has been no discussion of what Barney gets out of this arrangement. Has a valid, legally binding contract been entered into? Oral contracts can be valid and legally binding. This is not a contract because there is no evidence of the exchange of consideration. Here's how it works: Even though Fred and Barney came to an agreement that Fred would move into Barney's guest room, we have no knowledge of any consideration being offered by Fred in exchange for this privilege. Without consideration, an agreement or contract is not legally binding. The legal philosophy behind this is that a person cannot do something of value without receiving something of value in turn. So, at this point, this arrangement does not constitute a valid contract.
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Which scenario would lead to a construction lien? A worker was not paid for work done on a property.
A construction lien is a type of involuntary, specific lien that can be imposed upon a property if the owner fails to pay a contractor for any work on the property.
Stevie receives an offer for his house. He takes part of that offer and adds new language. He sends it to the buyer. This revised offer: is a counteroffer and is considered a new offer
A counteroffer is considered a rejection of the original offer, meaning the original offer dies with the submission of a counteroffer. A counteroffer is basically a new offer!
When a lender forecloses on a property and the sale of the property is not enough to satisfy the loan balance, what can the lender do to recoup the rest of their money? seek a deficiency judgment
A deficiency judgment allows the lender to go after a borrower's personal property to repay part of the loan not covered by the foreclosed on home's sale.
Target marketing involves agents utilizing a farm area. Which of the following describes an agent utilizing a farm area? Gretta focuses on the south side of town where there are a lot of apartment buildings and condos.
A farm area is a specific area that a real estate associate chooses to specialize in and become an expert in. Farm areas can look different. Maybe it's a certain area of town, or maybe it's an area with only industrial properties.
What does a high vacancy rate indicate about a rental market? Supply is outpacing demand. Rent prices will be lower to attract renters.
A high vacancy rate means that supply is outpacing demand. Rent prices will be lower to attract renters.
When would a lis pendens note be used? when a lender is beginning the process of a judicial foreclosure
A lender who is beginning the process of a judicial foreclosure will file a lis pendens notice, creating constructive notice that a lawsuit is happening involving the property in default.
Henrietta sells a property, reinvests the proceeds in a brand new property, and defers all capital gain taxes. This is called a(n): like-kind exchange
A like-kind exchange lets an investor sell a property, reinvest the proceeds in a brand new property, and defer all capital gain taxes.
Odonis' client is concerned about the marketability of their title. Odonis advises that if they want their title to be marketable, they need to focus on clearing up all: significant encumbrances and liens
A marketable title is a title that is free from significant encumbrances or defects (such as liens) that might otherwise prevent a purchaser from enjoying or eventually selling the property.
A property that is being sold is exclusively identified on the sales contract as 24029 Wisteria St., Naples, FL 34101. Is this a valid legal description? This street address is not precise enough; a legal land description is needed.
A street address like this one does not count as a legal description for a property in official documents like contracts and deeds. Legal descriptions must be determined via metes and bounds, lot and block, or the government survey system.
Why would a buyer or seller be willing to enter a transaction broker relationship when it only affords limited representation, opposed to the full fiduciary level of representation afforded by a single agent relationship? It allows a residential in-house transaction to take place.
A transaction broker relationship is one of limited representation. The reason a party would consent to a limited representation rather than insist on the fiduciary level of representation afforded by a single agent relationship is that, oftentimes, the buyer and seller come together through the efforts of one brokerage. Florida takes the position that both parties to in-house residential transactions cannot truly be given full fiduciary representation since their goals at are odds with each other. Therefore, the limited representation of the transaction broker relationship removes that conflict of interests and puts the parties on even footing, facilitating the completion of the sale, which is what both parties want.
Which of the following is the BEST example of agency by ratification? A store manager honors a refund the assistant manager made the night before, even though the assistant manager did not have the authority to offer the refund.
Agency by ratification is created when an agent takes an unauthorized action on behalf of a party which is accepted after the fact by the party. The assistant store manager did not have the authority to offer a refund, but the store manager honored the refund after the fact anyway.
Builder Sanjay combined two adjoining parcels of land for his new building; the resulting lot is worth more than the two plots separately. What do assemblage and plottage mean in this situation? Assemblage is the act of combining parcels. Plottage is the resulting increase in value.
Assemblage is the act of combining parcels; plottage is the resulting increase in value.
Ace Bank makes a loan at 2.31% interest plus 4 points. What will their yield be on this loan? 2.81%
Each point increases yield by 1/8 of 1%, or 0.125%. Multiply 4 points by 0.125% to figure out the percentage increase: 0.125%. x 4 = 0.5% Add 0.5% to the original interest rate to get 2.81%. 2.31% + 0.5% = 2.81%
Dean owns a brokerage. His graphic designer tells him to put his name on the entrance sign and nothing else. However, Dean must include: the words "Licensed Real Estate Broker" or "Lic. Real Estate Broker"
Brokerage entrance signs must include the words "Licensed Real Estate Broker" or "Lic. Real Estate Broker."
Cammy takes out a fully-amortized, fixed-rate loan for her new vacation home on Lake Placid. When Cammy's mother asks her to fly to Singapore for their family vacation, Cammy tells her mother she doesn't know if she can afford it, as her loan payments could fluctuate. Analyze if Cammy is correct. Cammy is NOT correct; she has a fully-amortized, fixed-rate loan, so she knows exactly how much her monthly payments will be.
Cammy has a fully-amortized, fixed-rate loan, so she knows exactly how much her loan payments will be every month.
Hila wants to remove her kitchen cabinets so she can take them with her when she moves. If Hila does this, she will be performing the act of: severance
Yes, severance is the act of converting real property into personal property.
Chapter 61J2 of the Florida Administrative Code contains the FREC's regulations for license holders in Florida. These regulations are based on which portion of Florida's statutes? Chapter 475 is the law on which Chapter 61J2 of the F.A.C. is based. Remember that Chapter 475 is the law passed by the legislature, and Chapter 61J2 is the regulations created by the FREC from the law.
Chapter 120 deals with the procedural side of the application process for all licensees overseen by Florida agencies. Chapter 475 is the law on which Chapter 61J2 of the F.A.C. is based. Remember that Chapter 475 is the law passed by the legislature, and Chapter 61J2 is the regulations created by the FREC from the law.
A license holder does not disclose a house's history of flooding to a buyer. This is an example of: concealment
Concealment is withholding information or a material fact. In other words, it's when a license holder doesn't disclose something that they should disclose.
Which of these situations demonstrates the principle of anticipation? An investor buys a property at an above-market price because they know the area is rapidly increasing in value.
Correct! The principle of anticipation is the idea that the present value of a property is affected by the anticipated income or utility.
A real estate purchase contract has been signed. Both parties have obligations they need to fulfill before the closing, which happens in two weeks. In what status is the contract? executory
During the period between contract signing and the closing, the contract is executory, as parties have yet to fulfill their duties.
Bruce took out an amortized loan of $300,000 with a 5.2% interest rate. His monthly payment is $1,647.33. How much will he pay in interest on his first monthly payment? $1,300
First, find the annual interest payment by multiplying $300,000 by 5.2% to get $15,600. Divide $15,600 by 12 to give you the first monthly interest payment of $1,300.
Arnav is interested in a residential property because he loves the antique light fixtures installed in every room. Corey is the license holder helping Arnav find a property. What is Corey's responsibility regarding the light fixtures? Corey should specify in writing whether the light fixtures are the seller's personal property.
Fixtures can often be a source of confusion or contention in a real estate transaction. Corey should talk to the seller about the light fixtures. Then, if the seller agrees to leave them, he should get it in writing in the contract.
Kat's sales associate license ceases to be in force. What is the most likely cause for this license status? Kat changed her employing broker without notifying the FREC within 10 days.
If Kat changed her employing broker without notifying the FREC within 10 days, her license would cease to be in force. This license status applies specifically to such situations where license holders fail to notify the FREC of important changes.
A former client successfully sues Licensee Laurel. Since Laurel cannot satisfy the judgment, the claimant appeals to the Recovery Fund for reimbursement. The Recovery Fund reimburses the claimant. What automatically happens to Laurel? Her license is suspended.
If the Recovery Fund pays compensatory damages to a claimant, the offending licensee will automatically have their license suspended.
Farrah, a real estate agent, bought a condo. She did not act as a licensee during the transaction, but hired another licensee to represent her. During the course of the transaction, the agent representing her converted her funds. Farrah sued the agent and received a final judgment against him in civil court. He was unable to pay. Can Farrah make a claim to the Recovery Fund? Yes, Farrah can make a claim to the Fund, because she was not acting in her capacity as a licensee during that transaction.
If the real estate licensee was the buyer, seller, lessor, or lessee, they can make a claim to the Fund, as long as they weren't acting in their capacity as a real estate licensee at the time.
Buddy thinks one of Holly's marbles would be a great addition to his collection. As offeror, Buddy proposes a swap: two of his blue marbles for one of her green marbles. Holly listens to Buddy's offer and then counters with her own: one of her green marbles for two of Buddy's blue marbles AND one red marble. What are the roles played by each party to this marble negotiation? Buddy and Holly were both offerors and offerees at different times.
In a back-n-forth negotiation, the parties can change out roles from offeror (the person making an offer) to offeree (the person receiving the offer). That happens when the original offer is responded to by a counteroffer, which is a rejection of the original offer and a new offer all in one.
In lien-theory states like Florida, a borrower holds the deed to a property during the life of a traditional lender-financed loan. Carmen, however, only has equitable title to her Florida condo until she pays off her loan. What is the best explanation for this? In lien-theory states like Florida, borrowers of traditional lender-financed mortgages hold the deed during the life of the loan. This is not true, however, with seller-financed, installment sales contracts. (In an installment sales contract, the seller takes on the role of a lender, accepting a down payment on the purchase price of property with scheduled installment payments.) During the life of this type of loan, the buyer holds equitable title to the property, while the seller retains legal title in trust for the buyer until the loan is paid in full.
In lien-theory states like Florida, borrowers of traditional lender-financed mortgages hold the deed during the life of the loan. This is not true, however, with seller-financed, installment sales contracts. (In an installment sales contract, the seller takes on the role of a lender, accepting a down payment on the purchase price of property with scheduled installment payments.) During the life of this type of loan, the buyer holds equitable title to the property, while the seller retains legal title in trust for the buyer until the loan is paid in full.
Virginia leases a property through a percentage lease. Her base rent is $1,200. In June, her property earns $5,000. Last month her rent was $3,000. 3% of her monthly sales go towards rent. Her operating expenses are $450. How much did Virginia pay for rent in June? It looks like you multiplied the sales rate by the operating expenses before subtracting that total from the fixed rent. To calculate rent under a percentage lease, use the formula: Fixed Rent + (Overage x Sales rate) = Rent. $1,200 + ($5,000 x 0.03) = $1,350
It looks like you multiplied the sales rate by the operating expenses before subtracting that total from the fixed rent. To calculate rent under a percentage lease, use the formula: Fixed Rent + (Overage x Sales rate) = Rent. $1,200 + ($5,000 x 0.03) = $1,350
Jim and Broker Bob are lifelong friends. A year ago, Jim told Bob that he'd sure love to move into a bigger house, but he'd need to make more money. Today, during their weekly pickleball match, Jim informed Bob that he got a raise. Which of the following BEST explains why implied agency could arise from this scenario? Jim and Bob's lifelong friendship, coupled with Jim's announcement of his raise, are BOTH factors that could lead to an implied agency relationship.
Jim and Bob's lifelong friendship, coupled with Jim's announcement of his raise, are both factors that could lead to an implied agency relationship.
If Manuel is part of an LLP and Shay is part of an unincorporated association, which of them is eligible to register their business entity as a brokerage? Manuel
LLPs, or limited liability partnerships, are legally able to register as a real estate brokerage entity. Unincorporated associations are NOT allowed to register as a brokerage. Therefore, only Manuel may register his business entity as a brokerage.
Ariel plans to move to a different city to be closer to her family. She loves her beautiful, beachfront property, though. She wishes she could take her current real estate with her to the new city, but she can't. Which characteristic of land is this? immobility
Land cannot be moved. This is an example of immobility, one of the physical characteristics of land.
Maddy works in the real estate finance industry. She connects buyers with different mortgage options and tries to make real estate deals happen. She knows the various lending options out there for buyers. What does Maddy work for? a finder's fee
Maddy is a mortgage broker who works for a finder's fee. Mortgage brokers do not work for lenders. They are middlemen (middlepeople) who are paid a finder's fee (usually paid by the lender) for connecting the buyer to different financing options.
A sales associate needs to direct their client to a few sources of third-party financing. You tell the sales associate to look into: commercial banks, savings associations, and credit unions
Many clients will need third-party financing, which can come from commercial banks, savings associations, credit unions, and mortgage brokerage companies.
Monique is a developer working on a new event center for the city. Who does she need to approve the site plans? city planning board
Monique will need to get the site plan approved by the city planning board.
Mutual agreement, revocation, renunciation, and breach of agreement are all causes for termination of agency due to: acts of the parties
Mutual agreement, revocation, renunciation, and breach of agreement are all causes for termination of agency due to what are known as acts of the parties.
Michelle wants to buy property insurance for a parcel of undeveloped land that she purchased. Can she do this? No. Insurance covers structures, not land, because land is considered indestructible.
No, Michelle can't insure her undeveloped land. Insurance covers structures, not land, because land is considered indestructible.
A shopping mall was built in 1997. Does the mall need to be accessible to people with disabilities? Yes. The ADA requires that public accommodations and commercial facilities that are newly constructed (built after 1993) be accessible.
The Americans with Disabilities Act (ADA) requires that public accommodations and commercial facilities that are newly constructed (built after 1993) be accessible.
Which of these would be considered a tangible asset of a business? personal property
Personal property is a tangible asset, while the others are intangible.
Carina has a non-amortizing loan balance of $225,000. Her interest rate is 4.25%. How much will she owe next month? $796.88
Principal x Interest rate = Annual interest. $225,000 x 0.0425 = $9.562.50. This is her annual interest. Divide by 12 to get the monthly payment. $9,562.50 ÷ 12 = $796.88
A friend and potential client comes to you for advice on investing in real estate. They want to know what the pros and cons are. Which of these statements accurately reflects one of the advantages of real estate as an investment? The rate of return is historically one of the highest, compared with other investment vehicles.
Real estate does have a high rate of return, but it is not cheap to obtain and maintain compared to other investments, and it is not very liquid.
Todd buys an office building for $700,000 and puts $100,000 worth of work into it. His closing costs when he buys it are $9,000. Todd rents it out to tenants for six years, claiming $16,500 per year in depreciation. Six years on, Todd sells it for $2,200,000. It costs him $75,000 to sell it. What is his capital gain? $1,415,000
Realized gain - Adjusted basis = Capital gain. Start with Basis + Cost of improvements + Qualified closing costs - Realized depreciation = Adjusted basis (investment property). That is, $700,000 + $100,000 + $9,000 - 99,000(because it's $16,500 x 6 years) = $710,000. Sales price - Selling costs = Realized gain, so $2,200,000 - $75,000 = $2,125,000. Back to the Capital gain formula: $2,125,000 - $710,000 = $1,415,000
Rhoda has a sales associate license in Mississippi. She has been living in a hotel in Florida for two months. Evaluate whether or not she would be eligible for mutual recognition. Yes, because she is licensed in a mutual recognition state and has not lived in Florida for four months.
Remember, it takes four months of living anywhere in Florida (including a hotel!) to be considered a resident. Because Mississippi is a mutual recognition state and she has only been living in Florida for two months, she still qualifies (for another two months).
Robert is a Florida broker operating as a fiduciary for Mia in a real estate transaction. When introducing Mia to others, Robert should refer to her as his: client or principal
Robert is a Florida broker operating as a fiduciary for Mia in a real estate transaction. When introducing Mia to others, Robert should refer to her as his client or principal. In Florida, agents operating as agents have customers, while agents operating as fiduciaries have clients, also known as principals.
An appraiser is putting a value on a business. To do so, she uses the business's cap rate to take the present value of a business's assets and the income it produces to predict a future value. What valuation method is she most likely using? income analysis
She is most likely using an income analysis, because she's using the current income to predict future value.
Alana is 28, a Canadian citizen with the legal right to work in the U.S., a Florida resident, and has a G.E.D. Evaluate whether she meets the qualifications for a Florida sales associate license. Yes, she meets the qualifications: she is at least 18, can work in the U.S., and has a high school diploma or the equivalent.
She meets the qualifications: at least 18, can work in the U.S., has a high school diploma or the equivalent (a G.E.D. is acceptable). One does not need to be a Florida resident to apply.
When Buyer Joey expresses interest in looking at a particular property, Sales Associate Bill told Joey that if he wanted Bill to continue to represent him, they would need to transition from a single agent relationship to a transaction broker relationship. What is the most likely reason Bill said this? The seller is represented by Bill's brokerage; therefore, this would have to be handled as an in-house transaction.
Since Bill used the term "represent," there are only two authorized brokerage relationships he could have been talking about: transaction broker or single agent. (No brokerage relationships are relationships of nonrepresentation.) And since Bill said he would "need" to operate as a transaction broker, that meant that a single agent relationship was not possible with respect to that particular property. From all of this, you can deduce that the seller is represented by Bill's brokerage and this must be handled as an in-house transaction. If both parties are to an in-house transaction are to be represented, they will be in transaction broker relationships.
Realtor Dani just acquired a listing for a luxury South Beach condo that appears to tick every box on the wish list of a buyer that she's been working with for the past couple of weeks. It's much nicer than anything that has come up on the MLS in months. What should Dani do next? Dani should list the property on the MLS, per her obligations, but make arrangements to show the property to her buyer as soon as possible.
Since Dani is a Realtor and member of a local MLS, Dani should honor the listing rules of the MLS and, at the same time, set up a showing for her client as soon as possible.
According to Florida statute, a party identified as a customer "may or may not be represented by a real estate licensee in an authorized brokerage relationship." What is a licensee's role when representing a customer? agent
Since the party is referred to as a customer, if they are represented by the licensee in an authorized brokerage relationship, that licensee is operating as an agent and NOT a fiduciary. Only clients get represented by fiduciaries.
Single agent Carl brought a buyer client to the transaction for the purchase of a Daytona, Florida townhouse. He was compensated indirectly by Seller Susan according to the commission split described in the listing agent's MLS listing. Who did single agent Carl represent in the transaction? the buyer
Single agent Carl represented his buyer client's interest in this transaction. His loyalty and obligation to the buyer client was not affected by the fact that the seller and listing agent provided Carl's compensation.
Kate doesn't fill out all of her license renewal application. What is the likely consequence? The FREC will deny the license application but allow Kate to apply again.
Sometimes a license application is denied for, well, sloppiness. A license application can be denied by the FREC if the applicant fails to fill out the application completely. In these cases, as long as the applicant corrects the errors, they can reapply.
Which statement most accurately differentiates between the Department of Business and Professional Regulation and the Florida Real Estate Commission? The FREC consists of seven members, whereas the DBPR is a much larger, multi-division agency.
The FREC consists of seven members, whereas the DBPR is a much larger, multi-division agency. The DBPR regulates real estate licensing, but also regulates several other professions as well.
The Fair Housing Amendment Act of 1988 amended the Fair Housing Act to add these protected classes: disability and family status
The Fair Housing Amendment Act of 1988 amended the Fair Housing Act to add disability and family status to the protected classes.
A property is sold for $350,000. The buyer has paid $12,000 in earnest money and is obtaining a 70% loan. Based on the information provided, how much additional cash will the buyer have to bring to the closing day? $93,000
The buyer will need to bring an additional $93,000 to the closing. First, calculate the loan amount using the formula for solving for part: Total x Percentage = Part. ($350,000 x 0.70 = $245,000). Then, subtract the earnest money and the loan amount from the purchase price: $350,000 - $12,000 - $245,000 = $93,000
A new home was sold for $1,200,000 in Miami-Dade County. The buyer took out a mortgage for $1,000,000 and paid the rest in cash. The buyer agrees to pay for all three state transfer taxes (documentary stamp on the deed, promissory note, and the intangible tax on the new mortgage). How much will the buyer owe in state transfer taxes? $12,700
The buyer will owe $7,200 for the deed tax ($1,200,000 x .006 = $7,200), $3,500 for the promissory note tax ($1,000,000 x .0035 = $3,500), and $2,000 for the new mortgage intangible tax ($1,000,000 x .002 = $2,000). Together, these taxes amount to $12,700.
Which of these people is least likely to end up in an implied agency relationship with Sales Associate Leslie? The courts have been known to rule that family, friends, and even former customers and clients enjoy a presumed implied agency relationship because of previous or ongoing relationships with a licensee. Matt is the only one who had no previous connection to Leslie, so he is least likely to end up in an implied agency relationship.
The courts have been known to rule that family, friends, and even former customers and clients enjoy a presumed implied agency relationship because of previous or ongoing relationships with a licensee. Matt is the only one who had no previous connection to Leslie, so he is least likely to end up in an implied agency relationship.
The day before Jacob was to close on a new home, a telecommunications satellite unexpectedly fell from the sky, landing right on the place. Where once was a charming three-bedroom split-level, is now a scorched-earth crater. Not surprisingly, Jacob got out of the contract. How would you classify the discharge of Jacob's contract? Destruction of improvements to the land (the structure) affects the "possibility to complete." The contract would discharge due to operation of law.
The destruction of the improvements to the subject property would be cause for contract termination due to the inability to complete the transaction as planned. Inability to complete falls under the classification of discharge due to operation of law.
Hank buys a home for $350,000. He took out a $280,000 mortgage to pay for the home. What is his LTV ratio? 80%
The formula for LTV is the loan amount divided by the property value. $280,000 divided by $350,000 equals 0.80, which means the loan has an LTV ratio of 80%.
Graciela is leaving Atlas Realty and moving to another brokerage. She can't wait to tell her new brokerage all the details about her most recent transaction at her old brokerage. Graciela should remember: She must keep confidential information confidential even after her employment terminates.
The obligation of confidentiality does not terminate when employment terminates.
Comp 1 is 3,000 sq. ft. and was sold for $300,000. The subject property is 2,800 sq. ft. If that was the only difference in the properties, using the sales comparison approach, what would the value of the subject property be? $280,000
The price per square foot is $100. So, 200 fewer square feet in a property would mean $20,000 less in value. So, the subject property is valued at $280,000.
Yolanda is a homeowner with a mortgage. She paid it off. What is the clause that requires the lender to remove the lien from her property, now that she's repaid her debt? satisfaction of mortgage clause
The satisfaction of mortgage clause requires the lender to remove the lien and record the satisfaction of the mortgage once it has been fully paid off.
Ella is buying a condo from the current owner. Which of these documents must the owner give her? a condominium declaration
There are four documents that MUST be given to all condo buyers, whether they are the first purchaser of the unit or a subsequent buyer. They're known as the "condominium documents," and they outline all the important information about the condo buildings and condo association. They are the declaration, the articles of incorporation, the bylaws, and Frequently Asked Questions (FAQs). Resale condos require a condo declaration but not a prospectus.
Broker Casey entered into a single agent relationship with Jane to sell her 13-acre ranch. He did not provide her with a written brokerage relationship disclosure. Was that an error on his part? Casey was correct in not using a disclosure form because Jane's ranch qualified as nonresidential.
There is no disclosure requirement for a single agent relationship in a nonresidential transaction. Agricultural property in excess of 10 acres is considered nonresidential. Therefore, Broker Casey acted appropriately in not using the disclosure form.
Buyer Pete insists that, in multiple conversations, the seller agreed to leave all kitchen appliances in the house. The seller doesn't recall it that way, and the contract makes no mention of this. Which of the following legal concepts will likely come into play here if this dispute becomes a lawsuit? Instead it has to do with the four corners rule, which refers to the legal concept that when a court interprets a contract, it will only consider that which is contained within the "four corners" of the document.
This has nothing to do with "seller beware." Instead it has to do with the four corners rule, which refers to the legal concept that when a court interprets a contract, it will only consider that which is contained within the "four corners" of the document.
A Florida landlord places all of the security deposits he collects into his business account. He posts a surety bond which covers the total amount of deposits. This is: a legal practice under the Florida Residential Landlord and Tenant Act
This is a legal practice under the Florida Residential Landlord and Tenant Act.
Roy has a piece of land that Tom wants to develop into a mixed-use retail and residential building. Roy offers Tom a ground lease for 70 years. At the end of that 70 years, if the lease is not renewed, what happens to Tom's buildings? They revert to Roy, along with the land.
This is correct because at the end of a ground lease, all buildings revert to the land's owner.
A tenant is considering a triple net lease but they don't fully understand what it entails. You tell them they'll be responsible for several fees, such as: rent, taxes, insurance, maintenance costs
This is correct. A triple-net lease means rent and three property expenses, which can include taxes, insurance, maintenance, and sometimes even interest on the lessor's loan.
Aurora has no formal training in urban planning, but she volunteers her time to represent her community and make decisions about its future growth. Aurora is most likely a member of the: local planning board
This is correct. Aurora is most likely a member of the local planning board. This group is made up of appointed volunteers who are not required to be professional city planners.
Which of these is the requirement that certain infrastructure, such as potable water or waste treatment facilities, be in place before any new development is permitted? concurrency
This is correct. Concurrency is a provision from Florida's Growth Policy Act requiring that certain infrastructure (sanitary sewers, potable water, and waste treatment facilities) be in place before any new development is permitted.
Seth has filed a certiorari proceeding. This means that: Seth has filed a lawsuit against the county property appraiser and tax collector in order to protest the assessment amount of his property.
This is correct. Here's how the tax appeal procedure works. The property assessment is used to dictate the amount of property taxes. First, the owner receives their assessment in the mail. Then several other things happen: a miffed property owner can seek an adjustment. If the appraiser rejects the property owner's request for adjustment, the owner can then file an appeal with the Value Adjustment Board. If the Value Adjustment Board rejects the owner's request for a lower property assessment, the property owner needs to pay the property taxes under protest and file a certiorari proceeding. This is a lawsuit against the county property appraiser and tax collector. The court cannot assign a new assessment value, but they can require the appraiser to follow certain procedures in a re-assessment. If the court still finds in favor of the appraiser, the homeowner is out of luck, unless they want to file an appeal.
Kae is a broker. She asks her sales associate to collect evidence of title for the property they are working with. They bring Kae evidence of title in the form of: A Torrens certificate An opinion of title A certificate of title Title insurance Rank the types of evidence of title the sales associate brought Kae from the best to the worst. Torrens certificate, title insurance, opinion of title, certificate of title
This is correct. If a state uses it, a Torrens certificate is the absolute BEST form of title evidence. If a Torrens certificate cannot be obtained for a property, then title insurance serves as the second best evidence of title. These are followed by an opinion and certificate of title.
Some sales associates will need to have expert knowledge of the economic challenges some farms may have. These sales associates likely specialize in what type of real estate? agricultural
This is correct. Licensees who specialize in agricultural real estate will need to stay on top of the challenges associated with farm ownership.
Ivan is buying a furnished condo. What type of loan will he need? Package Mortgage
This is incorrect. A blanket mortgage is a loan for which more than one collateral property acts as security. A package mortgage is most often used when there is additional personal property to convey with the real estate. A furnished condo is one such example.
Choose the survey method that would result in this legal description: "Beginning at the intersection of the north boundary of Jolie Dr. and the east boundary of Midnight Rd.; then proceed due north along the east line of Midnight Rd. 120 ft. to its intersection with the center line of Deep River; then proceeding northeasterly 70 degrees along the center line of Deep River 400 ft. to the oak tree; then due south 300 ft. to the benchmark; then proceeding due west along the northern boundary of Jolie Dr. 300 feet, returning to the point of beginning." metes and bounds
This legal description is an example of the metes and bounds survey method. Telltale signs are that it starts and ends with a point of beginning, references landmarks and benchmarks, and gives directions and distances to outline the perimeter of the property.
A ceiling fan, still in its original packaging and NOT attached to the ceiling, is an example of: personal property
Yes, a ceiling fan still in the box is personal property. Personal property (or personalty or chattel) is an unattached, moveable asset not considered real estate. Once it's attached, it becomes real property.
While drinking at the waterfront bar & grill, John and Barry came to a verbal agreement regarding the launch of a fishing lure business as a side hustle to their day jobs. John will produce the lures, Barry will sell them, and they'll split the money, 50-50. Is this an enforceable agreement?
To be enforceable all contracts must possess the essential elements of offer & acceptance, legally competent parties, consideration, and lawful objective. As long as neither John nor Barry was under the influence of alcohol when entering into the agreement, their business contract is valid.
What is 0.546 in percentage form? 54.6%
To convert a decimal to a percentage, you need to move the decimal place two places to the right. Then slap on the percent sign (%). 0.546 in percent form is 54.6%.
An agent made $15,000 on a $400,000 sale of a home. What was their commission rate? 3.75%
To find the commission rate, we need to use the formula Part ÷ Total = Percentage. So, divide $15,000 by $400,000. This equals 0.0375. Convert this to a percentage, which is 3.75%.
Sarah's living room is 28' x 15'. About how many square feet of carpet will it take to cover the living room floor? 420
To find the square footage of an area, use Length x Width = Sq. ft. 28 ft. x 15 ft. = 420 sq. ft.
Omar's property measures 300' x 217'. Knowing this, how many acres is the lot? 1.49
To solve a problem like this, first identify the square footage of the land (Length x Width = Sq. ft.). Then divide that square footage by 43,560 sq. ft./acre: 300 ft. x 217 ft. = 65,100 sq. ft. So, 65,100 sq. ft. ÷ 43,560 sq. ft./acre = 1.49 acres. The lot is 1.49 acres.
Ella's house assessed for $91,000. The tax rate for city, county, and school taxes was 9.1 mills each. How much did she save in property taxes this year? $1,137.50
Total exemptions x Tax rate = Property tax savings. If a home has an assessed value above $75,000, the owner gets the base $25,000 exemption plus an additional $25,000 exemption on city and county taxes only. So, let's do school taxes first: $25,000 x 0.0091 = $227.50. For city and county, add the mills first to get 18.2 mills. $50,000 x 0.0182 = $910. $227.50 + $910 = $1,137.50
Tenant Tiffany receives an eviction notice from her landlord. However, she refuses to leave. What is the NEXT step the landlord should take? The landlord should file a complaint for eviction in the court of the county where the dwelling is located. Typically, the sheriff's department delivers the complaint to the tenant.
Under the Florida Residential Landlord and Tenant Act, here are the steps for eviction: 1. The landlord delivers notice to the tenant of their eviction. 2. If the tenant doesn't leave in the allotted time, the landlord must file a complaint for eviction in the court of the county where the dwelling is located. Typically, the sheriff's department delivers the complaint to the tenant. 3. The tenant has five days to file a response in defense. The tenant can try to defend for their continued possession, in which case the courts will have to render a judgment. 4. If the tenant doesn't answer the complaint but stays on the premises, the landlord must get a final judgment from the court. 5. If the judgment is in favor of the landlord, the landlord can gain possession after a 24-hour notice is posted on the dwelling. 6. At the time the sheriff executes the writ of possession or at any time after, the landlord or their agent may remove any personal property found on the premises to or near the property line. The landlord may request the sheriff to stand by to keep the peace while the landlord changes the locks and removes the personal property from the premises.
Toni and Karl own a home. It's their primary residence, and they have homesteaded it. They have two kids. If Karl dies, who owns the home? Toni would have a life estate, and the kids would be the remaindermen.
Yes, if a married couple with kids homesteads their property and one of them dies, the other inherits the property as a life estate, and the kids are remaindermen.
A tenant has to leave the country to take care of an ill parent and is out of town for almost three weeks. She tells her landlord about the absence and pays her rent on time while she is gone. While she is absent, the landlord enters the premise without her consent because he thinks it's a good time to make sure she takes adequate care of the unit. Are the landlord's actions legal? No, if the rent is current and the tenant notifies the landlord of an intended absence, then the landlord may enter only with the consent of the tenant or for the protection or preservation of the premises.
Under the Florida Residential Landlord and Tenant Act, if the rent is current and the tenant notifies the landlord of an intended absence, then the landlord may enter only with the consent of the tenant or for the protection or preservation of the premises.
A property owner decides to use a new property management company to manage the apartment complex she owns. What needs to happen? The current property management company needs to transfer the tenants' security deposits and advance funds to the new property management company, along with an accounting of how much should be credited to each tenant.
Under the Florida Residential Landlord and Tenant Act, the tenants' security deposits and advance funds need to be transferred to the new property management company, along with an accounting of how much should be credited to each tenant.
Camila bought a home. The purchase price was $850,000. Her loan amount was $730,000. Calculate her LTV ratio, rounded to the nearest percent. 86%
Use the formula for loan-to-value ratio: Loan amount ÷ Purchase price = Loan-to-value ratio. $730,000 ÷ $850,000 = 0.859 or 86%
When an agent enters into an agency relationship, despite the fact that no compensation is offered or paid, they are providing: gratuitous agency
When an agent enters into an agency relationship, despite the fact that no compensation is offered or paid, they are providing gratuitous agency.
What is the loan-to-value ratio of a loan of $144,000 on a property sold for $180,000? 80%
When you see the word "to" in loan-to-value, think "divide." To find the loan-to-value ratio, divide the loan amount by the property value. $144,000 divided by $180,000 equals 80%.
Which of these scenarios best illustrates business risk? While this predicament isn't great for the investor, remember that business risk is when a business's profits aren't as high as predicted. The bakery example is the correct answer.
While this predicament isn't great for the investor, remember that business risk is when a business's profits aren't as high as predicted. The bakery example is the correct answer.
You want to enter into a partnership with four business partners in which you share an equal amount of personal responsibility for the financial liabilities and obligations of the business as all the other partners. Which type of partnership would you enter into? general partnership
With general partnerships, each member equally assumes unlimited personal responsibility for the financial liabilities and obligations of the business.
How is real estate different from real property? Real estate is land and improvements. Real property is land, improvements, and the bundle of rights.
You got it: Real estate is land and improvements. Real property is land, improvements, and the bundle of rights.
