Real Estate MCQ

12 What fee is charged by a lender for holding credit available for a borrower, often associated with a construction loan? 1) Take Out Commitment Fee 2) Loan Origination Fee 3) Discount Point 4) Buydown

1) Take Out Commitment Fee

16. Elisa and Bob purchased a property together after they were married. Which type of ownership would they automatically take? 1) Tenancy by the Entireties 2) Joint Tenancy 3) Tenancy in common 4) Estate in Severalty

1) Tenancy by the Entireties

23. Involuntary alienation includes all of the following except which one? 1) Transfer by Will 2) Transfer by Escheat 3) Transfer by Eminent Domain 4) Transfer by Adverse Possession

1) Transfer by Will

32. There are how many linear feet in one mile? 1) 36 2) 640 Submitted answer 3) 5,280 4) 43,560

3) 5,280

16 A 9 year old condominium was estimated by an appraiser to have a reproduction cost of $240,000. It has an effective age of 3 years and an economic life of 60 years. What is the accrued depreciation? 1) $12,000 2) $4,000 3) $36,000 4) $3,500

1) $12,000 $240,000 / 60 = $4,000 Annual depreciation $4,000 x 3= $12,000 Accrued depreciation

18 Terry is a widower who is permanently disabled. His homesteaded property has an assessed value of $260,000. What is his taxable value for school taxes? 1) $234,000 2) $259,000 3) $229,500 4) $0

1) $234,000 $260,000 - $25,000 regular exemptions - $500 widower exemption - $500 disability = $234,000

16 Carlyle managed an apartment building that has 10 units which rents at $1100 each per month. Last month he had combined vacancy and collection losses of $3,300. His insurance payment was $400, and the utility bills for the common area was $700. What was his effective gross income last month? 1) $7,700 2) $6,600 3) $9,900 4) $7,300

1) $7,700 Effective gross income (EGI) = PGI - losses + other income.

18 Patsy purchased an income residential property for $240,000. It cost her $7,200 in closing costs. $30,000 is the value of the land. What is the amount of the yearly depreciation for federal taxes? 1) $7,898.18 2) $5,569.23 3) $7,374.55 4) $8,727.27

1) $7,898.18 You subtract the value of the land from the depreciable basis and divide by 27.5 to get the yearly depreciation: $240,000 + $7,200 = $247,200- $30,000 = $217,200 w 27.5 = $7,898.18 allowable depreciation per year for federal taxes

5 You sell Johnny a rental list that was to only include pet friendly rentals. Johnny found the list to be inaccurate and requested a refund in writing. How much is he entitled to as a refund? 1) 100% 2) 75% 3) 25% 4) 0%

1) 100%

12 Jackson is buying a home for $500,000. His interest rate on the loan will be 5% for 15 years. He will have a down payment of $20,000. What is the LTV on the loan? 1) 96% 2) 4% 3) 95% 4) 9.50%

1) 96% Loan Amount / Price (or value) = LTV ratio Take $500,000 - $20,000 = $480,000; $480,000 / 500,000 = 96% LTV

18. Harry Hands, a broker of Honey Realty, set up a temporary shelter in a neighborhood so he and his agents could meet with customers to discuss model options of the homes being built. Which statement is correct regarding this situation? 1) A. The shelter does not need to be registered as a branch office as long as transactions are not closed there, and no salespersons are permanently assigned to work there. 2) Even though the location is temporary, it needs to be registered with the DBPR 3) Because it is for the purpose of selling a new subdivision, there are no conditions for which it would need to be registered with the DBPR 4) Unless it is on wheels it needs to be registered with the DBPR

1) A. The shelter does not need to be registered as a branch office as long as transactions are not closed there, and no salespersons are permanently assigned to work there.

22. A buyer and seller have what kind of relationship? 1) Arms length 2) Fiduciary 3) Transaction Brokerage 4) Intimate

1) Arms length Dealing at arm's lengthWhen dealing with another party at arm's length, the parties are said to be acting freely and independently of the other. Caveat EmptorLatin for "let the buyer beware." A doctrine that places the burden on buyers to reasonably examine property before the purchase and take responsibility for its condition after the purchase.

14 What is purchase money mortgage entered as? 1) Debit to the seller and credit to the buyer 2) Credit to the seller and debit to the buyer 3) Debit to the buyer only 4) Credit to the buyer only

1) Debit to the seller and credit to the buyer General Rule of Thumb Items debited to seller Items that the seller usually signs and pays for are charged to the seller including the broker commission, mortgage payoff, buyer second held by the seller, deed prep, seller attorney fees, doc stamps on deed, owner's title insurance, prorated taxes, interest rents and any security deposits held. •Broker's commission •Mortgage(s) paid off or held by seller (Purchase Money Mortgage) •Deed preparation •Seller's attorney fees •State documentary stamps on the deed •Owner's Title insurance •Prorated taxes, interest, advance rent •Security deposit

19 The basic provisions of the national flood insurance program include all of the following except which one? 1) Development of standards that obstruct the natural flow of flood waters 2) Residential structures in the SFHA must have the first floor above the "Base Flood Elevation" 3) Non-residential structures must meet the residential requirement, or be water-tight below the Base Flood Elevation 4) Over 40 percent of purchasers of National Flood Insurance are in Florida

1) Development of standards that obstruct the natural flow of flood waters Flood zones A) National Flood Insurance Program (NFIP) 1) Can qualify for Federal Flood insurance program 2) "Special Flood Hazard Areas" are delineated according to NFIP criteria 3) Development within SFHAs must be restricted in a manner so as not to obstruct the natural flow of flood waters B) Residential structures in the SFHA must have the first floor above the "Base Flood Elevation" C) Non-residential structures must meet the residential requirement, or be water-tight below the Base Flood Elevation D) Over 40 percent of purchasers of National Flood Insurance are in Florida

8 When purchasing an existing condominium, which form is NOT required for the buyer receive? 1) Estimated operating budget 2) Frequently Asked Questions 3) Bylaws of the Association 4) Articles of incorporation of the association

1) Estimated operating budget

13 Which statement is false regarding the Government National Mortgage Market Association (GNMA)? 1) GNMA is part of the primary mortgage market 2) GNMA is a wholly owned government corporation under HUD. 3) The Mortgage-backed securities program provided by GNMA are Pass-Through Securities as GNMA acting as a GUARANTOR of these securities rather than the actual purchaser or creator of the securities. 4) GNMA provides the full faith and credit guarantee of the U.S. Government.

1) GNMA is part of the primary mortgage market

13 Geoff wants to buy a home with a conventional mortgage. The total PITI on the home he wants to buy will total $1,500. He is already paying $1000 in other long term debt obligations. Geoff's gross monthly income is $4,200. Which of the following statements is true? 1) Geoff doesn't qualify for a conventional loan because his TOR is above 36% 2) Geoff qualifies for a conventional loan. 3) Geoff doesn't qualify for a conventional loan because his HER is 36% 4) Geoff qualifies for the loan because his TOR is 24%

1) Geoff doesn't qualify for a conventional loan because his TOR is above 36% Total Monthly Obligations = $2500 / $4,200 = .5952 or 60%. TOR cannot exceed 36%: Doesn't qualify for a conventional loan. HER doesn't apply to conventional mortgages.

9 Which clause must be included for a deed to be valid? 1) Habendum Clause 2) Appurtenances Clause 3) Covenant of Seisin 4) Covenant of Warranty Forever

1) Habendum Clause

15 The fact that land is influenced by changes in the surrounding area describes? 1) Immobility of real estate 2) Indestructibility of land 3) Land is unique 4) Governmental controls through zoning, building codes, taxes, etc

1) Immobility of real estate Because land is immobile it is heavily influenced by changes in the surrounding area.

9 Which statement is not TRUE regarding a Lender's Title Policy? 1) Issued for purchase price 2) Protects the lender against title defects (not the owner) 3) Transferable (assignable to someone else buying the loan) 4) One-time premium paid at closing

1) Issued for purchase price

12 Which statement is false regarding a Blanket Mortgage? 1) It is a mortgage which creates a lien on multiple parcels combined with chattel 2) It is used by builders/develops that have more than one piece of real estate to finance and then sell. 3) The mortgage covers several parcels. 4) A partial release clause allows each property to be released as collateral from the mortgage as each property is sold

1) It is a mortgage which creates a lien on multiple parcels combined with chattel

Practice 1. Broker Justin Tune had conflicting demands from a buyer and a seller regarding an escrow deposit held by the brokerage. Per his contract with the parties, Justin believed he was entitled to keep 50% of the deposit for himself. What action with the court could Justin request? 1) Request a declaratory judgment 2) Request an interpleader 3) Request a stipulation 4) Request a recommended order

1) Request a declaratory judgment

7. The Broker's Disclosure Act requirements would pertain to which real estate transaction? 1) Sale of a beach house 2) Sale of a 15 unit apartment building 3) Lease of a house 4) 15 acre Horse farm

1) Sale of a beach house This rule that the disclosure must be made applies to residential sales only. This means that if a broker is working in the capacity of a property manager, the disclosure does NOT need to be made.Disclosures do have to be made for residential sale as defined as being an improved residential property of four units or fewer, or the sale of unimproved residential property intended for use of four units or fewer, or the sale of agricultural property of 10 acres or fewer.

19 City planners strive to reach all of the following goals except which one? 1) Savings of tax money by encouraging sprawl 2) Adequate provision of services 3) Providing for road right-of-way and Controlling Setbacks 4) Protection against costly drainage, flooding or environmental problems

1) Savings of tax money by encouraging sprawl Savings of tax money by preventing sprawl

9. When the judge ruled that the seller had to sell the house to the buyer this is an example of what? 1) Specific Performance 2) Liquidated Damages 3) Rescission 4) Compensatory Damages

1) Specific Performance

10 How would a township located five township tiers north of the baseline and eight range lines west of the principal meridian be written as? 1) T5N, R8W 2) R8W, T5N 3) T8N, R5W 4) R5W, T8W

1) T5N, R8W

7 Broker Rafael received a formal and signed complaint from HUD's investigator by mail. What should Rafael do next? 1) Within 10 days of receiving the notice, the Respondent must submit to HUD an answer to the complaint. 2) Within 15 days of receiving the notice, the Respondent must submit to HUD an answer to the complaint. 3) Within 30 days of receiving the notice, the Respondent must submit to HUD an answer to the complaint. 4) Within 60 days of receiving the notice, the Respondent must submit to HUD an answer to the complaint.

1) Within 10 days of receiving the notice, the Respondent must submit to HUD an answer to the complaint.

13. Owen Money and Lowden Clear worked together to develop and sell several properties. They never formed a legal relationship but when Owen Money was charged with fraud Lowden Clear was also found guilty because their relationship appeared to be a legal partnership. What is this an example of? 1) ostensible partnership 2) sole proprietorship 3) corporation sole 4) limited partnership

1) ostensible partnership

14 Sandra is buying a home and the closing date is set for March 10th. The annual property taxes are $2,325.00 and have not yet been paid. How will this be handled on the closing disclosure? 1) $433.15 as a debit to the buyer and credit to the seller 2) $ 433.15 as a credit to the buyer and debit to the seller 3) $439.52 as a debit to the buyer and credit to the seller 4) $439.52 as a credit to the buyer and debit to the seller

2) $ 433.15 as a credit to the buyer and debit to the seller Step 1: Seller will credit buyer from January through midnight the day before closing. Calculate the exact number of days; January 31 + February 28 + March 9 = 68 days that the seller owes the buyer. Step 2: Find the daily rate; property taxes for the year $2,325.00 / 365 days = $6.3698630137 x 68 = Step 3: Multiply the daily rate x Number of days = $433.15

18 Rhonda was charged for paving in front of her house. She owned 100 linear feet which was being charged at $28 a linear foot. The city agreed to pay the first 25% of the cost. How much was Rhonda charged as a special assessment? 1) $2,100 2) $1,050 3) $2,800 4) $350

2) $1,050 $28 x 100= $2800 x .75= $2,100 /2 = $1,050 The city pays 30% so multiply $6,750 x .70 (owners share) which brings the total to $4,725. BUT -Since a neighbor lives across the street (always assume this!), the cost of the road will be split between the two owners (one living on each side), so $4,725 ÷2 = $2,362.50 which is the amount billed to each property owner -and the answer to the problem.

14 Eagle Top Realty listed a ranch for $1,500,000. The listing calls for 6% commission to be paid on a sale price of up to $1,000,000 and 7% for anything above $1,000,000. When the property sold for $1,700,000 by Eagle Top Realty, what is the commission paid using the concept of a graduated commission scale? 1) $49,000 2) $109,000 3) $60,000 4) $119,000

2) $109,000 Calculate the first $1,000,000 x 6% = $60,000. The other $700,000 x 7% = $49,000; $60,000 + $49,000 = $109,000 in total commission paid.

19. A subject property has a fifth bedroom and a garage. A comparable property sold for $315,000 with only 3 bedrooms and no garage. The appraiser attributes a $4,000 difference for each bedroom and $12,000 for the garage. What is the adjusted value? 1) $330,000 2) $335,000 3) $331,000 4) $295,000

2) $335,000

18 Frank and Mary own a homesteaded home together with an assessed tax value of $515,000. Frank was in an accident and lost both his legs. How much will their exemption be for county tax? 1) $515,000 2) $50,500 3) $51,000 4) $55,500

2) $50,500 $50,000+$500= $50,500 $500 Additional Exemptions: •Surviving spouse-widows and widowers •Non-veterans who are totally and permanently disabled •Legally blind*

29. In internet advertising, where must the brokerage name appear? 1) In the website address Submitted answer 2) Adjacent to or immediately above/below point of contact information. 3) Anytime a sales associate's name is listed 4) It doesn't have to be included

2) Adjacent to or immediately above/below point of contact information.

20. When the Clarion Development Group wanted to build a condominium, what type of right would be transferred to the second and third level owners for the unit itself? 1) Limited 2) Air 3) Stacked 4) Land

2) Air

11 Broker Apple Daily didn't know that her agent Biff Begley was acting in a way that would cause harm to the client. Which of the following statements is not true? 1) Broker Apply Daily could be charged with Culpable Negligence 2) Biff Begley cannot be charged with Culpable Negligence since the client actually belongs to Broker Apple Daily 3) Both Broker Apple Daily and Biff Begley could be charged as a misdemeanor of the second degree 4) It is unethical for Real estate agents to engage in culpable negligence

2) Biff Begley cannot be charged with Culpable Negligence since the client actually belongs to Broker Apple Daily

17 Risks associated with general business conditions include all except which one? 1) Business risk 2) Capital risk 3) Purchasing-power risk 4) Interest-rate risk

2) Capital risk Business, Financial, Purchasing power and interest rate

6 Broker Teddy Bear was given a notice of noncompliance. What does he need to do? 1) Negotiate a stipulation order with the lawyer of the DRE 2) Correct the minor infraction with 15 days 3) Cut up his wall and wallet license and send to the DBPR 4) Wait for the recommended order that will come in the mail

2) Correct the minor infraction with 15 days

15 Market Indicators include all of the following except which one? 1) Vacancy rates 2) Depreciation 3) Price/sales information 4) Building permits

2) Depreciation

9 Donald claimed Jake's property through adverse possession. To have done so successfully, Donald would have to have done all of the following EXCEPT which one? 1) Take actual possession of the property 2) Hide the fact that he was living there 3) Do so for a continuous period of 7 Years 4) Paid taxes for the entire period

2) Hide the fact that he was living there

33. What is a disadvantage of investing in real estate? 1) Leverage Submitted answer 2) Illiquidity 3) Capital gains 4) Basis

2) Illiquidity

13 Which of the following statements are false regarding The Real Estate Settlement Procedures Act (RESPA)? 1) Giving a kickback in exchange for referring a settlement service business to another person is prohibited. 2) Kickbacks are said to harm consumers by driving down the cost of transactions. 3) Mortgage brokers can only pay other mortgage brokers a referral fee. 4) Real Estate Licensees can only pay other real estate licensees a referral fee.

2) Kickbacks are said to harm consumers by driving down the cost of transactions. Kickbacks are said to harm consumers by driving up the cost of transactions.

19 A policy that allows businesses, trades, and individuals to operate with very little interference from the government is called what? 1) Urban sprawl 2) Laissez faire 3) City Planning 4) Caveat Emptor

2) Laissez faire Prior to zoning ordinances, the philosophy of laissez fair ruled. •It is a policy that allows businesses, trades, and individuals to operate with very little interference from the government. •It opposes governmental interference beyond the minimum necessary for the maintenance of peace and property rights. The bottom line is that if it was good for the individual property owner--it happened, regardless of how it affected anyone else.

12. Mory was arrested for the murder of a co-worker and needs to get $300,000 quickly to pay his defense attorney. What type of value would he likely take to have it sold in a week? 1) Salvage value 2) Liquidation value 3) Insurance value 4) Investment value

2) Liquidation value

4. What is the fee called that is charged as a one-time upfront fee for preparing loan docs, administrative needs, etc.? 1) Take Out Commitment Fee 2) Loan Origination Fee 3) Discount Point 4) Buydown

2) Loan Origination Fee

31. Michael leases property for his jewelry store. Michael pays the landlord $2900.00 a month. Furthermore, Michael pays 5% of his gross sales. This is an example of what type of lease? 1) Net 2) Percentage 3) Variable 4) Gross

2) Percentage

19 Jones Montana once owned an industrial property that was later found to be contaminated with toxic waste. Which of the following statements is true? 1) Retroactive Liability under CERCLA means that Jones Montana has no responsibility since he no longer owns the property. 2) Retroactive Liability under CERCLA means that Jones Montana can be held liable and responsible since he used to own the property. 3) Several Liability under CERCLA means that Jones Montana can be held liable and responsible since he used to own the property. 4) Several Liability under CERCLA means that Jones Montana has no responsibility since he no longer owns the property.

2) Retroactive Liability under CERCLA means that Jones Montana can be held liable and responsible since he used to own the property. Retroactive Liability under CERCLA means:Prior owners of contaminated property can be held liable and responsible•Just because you sold the property doesn't mean that you're off the hook!

5. Which is NOT true about who pays for title insurance? 1) Seller may pay for owner's policy and buyer may pay for lender's policy 2) The lender pays for the lenders policy 3) The buyer can negotiate that the seller pays for both policies 4) None of the above

2) The lender pays for the lenders policy

12 Which statement is FALSE regarding lien priority? 1) Becomes important when there is not enough money to cover all debts against the property 2) The mortgage that is closed first is paid before other mortgages 3) Junior liens are paid after superior liens 4) A subordination agreement can change the order of who is paid first

2) The mortgage that is closed first is paid before other mortgages

30. The Federal Reserve System conducts monetary policy through all of the following ways except which one? 1) Open-market operations Submitted answer 2) Tighten lending criteria 3) Discount rate 4) Setting reserve requirements

2) Tighten lending criteria

5 On Friday, Rosie Peach, a sales associate, gets a contract and earnest money check for her deal. The Seller accepts the offer that same day but Monday is a holiday. What is the last day Rosie Peach can give the check to her Broker? 1) Monday 2) Tuesday 3) Wednesday 4) Thursday

2) Tuesday

11 For a contract to be valid it must meet all but which of the following standards? 1) Contractual Capacity of the Parties 2) Written offer and acceptance 3) Legality of object 4) Consideration

2) Written offer and acceptance

2. The Fair Housing Act of 1968 (with amendments) prohibits discrimination based on what? 1) based on a couples marital status. 2) based on a couple having children. 3) based on behavioral characteristics. 4) all of the above

2) based on a couple having children.

19 What does the regulation of the details of structures for minimum standards for safety, health, and general welfare fall under? 1) zoning ordinances 2) building codes 3) health ordinances 4) CERCLA

2) building codes

9 Faith died intestate. After an extensive search, a brother was found. How would Faith's property pass to her brother? 1) escheat 2) descent 3) devise 4) demise.

2) descent

26. Broker Rick O'Shea sold a rental list that was full of errors. When the client demanded a refund, in writing and with two weeks of having bought the list, Rock O'Shea refused to refund the money. What could he be charged with? 1) third-degree Felony 2) first-degree Misdemeanor 3) second-degree Misdemeanor 4) third-degree Misdemeanor

2) first-degree Misdemeanor

9 What is actual notice? 1) something printed in a newspaper 2) something you have learned by reading, seeing or hearing 3) recording something with the clerk of the court 4) the same as constructive notice

2) something you have learned by reading, seeing or hearing

6. A buyer purchased a rental property that is closing on July 6th. The seller has already collected rent for the month of July in the amount of $1800.00. The buyer gets the day of closing. The seller will owe the buyer how much of the rent at closing? 1) $1,567.74 2) $1,572.25 3) $1,509.68 4) $1,560.00

3) $1,509.68

18 Garth decided to move out of a small homesteaded home and into a larger more expensive one. The market value of his old home at the time of sale was $250,000, but his assessed value after applying his SOH benefit was only $175,000 . The just value of the new home was $325,000. Using the Portability provision of the Save Our Home Benefit, what would be the taxable value of the new home for city taxes? 1) $250,000 2) $225,000 3) $200,000 4) $275,000

3) $200,000 $250,000 (Market Value of old home) - $175,000 (assessed value of old home)= $75,000 Save Our Homes Benefit. $325,000 (Assessed value of new home) - $75,000 = $250,000 adjusted assessed value of the new home. $250,000 - $50,000 (homestead exemptions for city)= $200,000 taxable value for city taxes. "Moving Up" Story Problem Harriet decided to move out of her little cottage on the Gulf. She bought a property with a market (just) value of $340,000. Because her property had been homesteaded, she can bring the value of her assessment caps with her to apply to the new home. The market value of her old home at the time of sale was $294,510. Her assessed value was only $184,481. To determine the assessed value of the new home, take the assessed value of the new home and subtract the SOH benefit (amount of assessed value not taxed) and subtract applicable homestead exemptions. $294,510 -$184,481=$110,029 (This line calculates the SOH Benefit) $340,000-$110,029=$229,971 $229,971 -$50,000 (Homestead Exemptions) = $179,971 Taxable Value of New Home for City and County. $229,971 -$25,000 Taxable Value of New Home for School taxes.

16 Kevin knows that rental property in the area averages a Gross Income Multiplier (GIM) of 7.5. If the property is producing annual rental income of $55,000 plus additional income of $20,000, how much should he offer for the property? 1) $412,500 2) $150,000 3) $562,500 4) $262,500

3) $562,500 ($55,000 + $20,000) $75,000 x 7.5 = $562,500 Value

18 Heathcliff owns a property that was assessed to have a just value of $350,000. He is homesteaded with no other exemptions. The county tax is 6 mills, the city tax is 6.5 mills, and the school tax is 7 mills. How much would Heathcliff owe in property taxes? 1) $3,750 2) $2,275 3) $6,025 4) $5,850

3) $6,025 To solve this problem you total The county tax and city tax mills together. 6 mills + 6.5 mills = 12.5 mills. Convert into a decimal: .0125. Take $350,000 applicable homestead exemptions of $50,000 = $300,000 x .0125 = $3,750 taxes due for county and city. Then take $350,000 and subtract school applicable exemptions of $25,000 = $325,000 x .007 (7 mills converted to decimals) = $2,275 taxes due for school. Add $3,750 + $2,275 = $6,025 Total Tax Due

3. Investor Allen owns a property that was assessed to have a just value of $350,000. Allen does not receive any exemptions for this property. The county tax is 7.5 mills, the city tax is 6.75 mills, and the school tax is 5 mills. How much would Allen owe in property taxes? 1) $67,375.00 2) $673.75 3) $6,737.50 4) $67.38

3) $6,737.50

17 Samantha purchased a property 5 years ago for $525,000. At the time, it cost her $9,500 in closing costs. She also invested $70,000 in capital improvements in the property. She recently sold it for $730,000. It cost her $55,000 to sell it. What is her adjusted basis for the property? 1) $675,000 2) $70,500 3) $604,500 4) $515,500

3) $604,500 Purchase Price + Cost to Purchase + Capital Improvements = Adjusted Basis: $525,000+9500+70,000=$604500

14 David assumed seller Sarah's existing mortgage of $50,125 at closing. Plus, David took out a new mortgage of $125,000. How much are the promissory note doc stamps? 1) $250.00 2) $437.50 3) $613.20 4) $612.94

3) $613.20 $50,125+$125,000=$175,125 / 100= $1751.25 rounded up to $1752 x .35 = $613.20

18 Homes in Audrey's neighborhood increased in value by 5% last year while the consumer price index only increased by 4 percent. What's the most that Audrey's home assessed value can increase if her home was homesteaded? 1) 5% 2) 4% 3) 3% 4) Whatever the property assessor decides.

3) 3% Assessment Limitations -Save Our Homes (SOH) What this means is that if a property assessed for $100,000 one year (and it is homesteaded which is a requirement for the Save Our Homes provision to kick in), then the next year's property assessed value cannot exceed $103,000. •Limits increase:• To qualify must be legally a permanent resident of Florida• Only one homestead can be claimed •Hold title to the property as of Jan. 1 •First year•Must be filed with the property appraiser before March 1 •Currently limits increase in tax to 3% per year or the CPI (Consumer Price Index), whichever is LESS •Homestead owner can transfer up to $500,000 to a new homestead

11. How many days does the state have from the receipt of an application to notify the applicant of any errors or omissions? 1) 10 2) 15 3) 30 4) 45

3) 30

10 Which describes a township? 1) 640 acres 2) 6 square miles 3) 6 mile square 4) 43,560 square feet

3) 6 mile square

19 A developer has 100 acres of land. He wants to preserve 30% of the land for another project while selling the rest immediately as separate lots. If zoning requires the lots to be at least 31,500 square feet, how many lots can he sell? 1) 37 2) 38 3) 96 4) 97

3) 96 Number of starting acres 100 x .70 land available for lots= 70; 70 acres x 43,560 sq ft per acre= 3,049,200 total sq ft available; 3,049,200 sq ft /31,500 sq ft per lot= 96.8 round to 96

13 Which statement does not apply to VA Entitlements? 1) It is possible to use up only part of an entitlement. 2) The amount that is used up is equal to the amount that is being guaranteed by an existing VA loan. 3) A Loan Commitment states the amount of entitlement available to the veteran or serviceman 4) The unused entitlement is still available.

3) A Loan Commitment states the amount of entitlement available to the veteran or serviceman

Which of the following situations is not an example of an illegal kickback? 1) A manager of an apartment complex paying a tenant a $100 referral fee 2) A broker paying an unlicensed person a referral fee 3) A broker sharing part of the commission with the buyer 4) A broker paying a licensed mortgage broker a referral fee

3) A broker sharing part of the commission with the buyer

7 Which law prohibits discrimination based on race in all real estate transactions without exception? 1) Civil Rights Act of 1964 2) Fair Housing Act of 1968 3) Civil Rights act of 1866 4) Florida Fair Housing Act

3) Civil Rights act of 1866

19 Reenie had been operating a coffee shop out of her place for years. When zoning changed disallowing anything but residential property in the area, Reenie was allowed to continue running her coffee shop under which provision? 1) Special exception 2) Variance 3) Legally nonconforming use 4) Immune use

3) Legally nonconforming use A legally non-conforming use is a use existing on the land that was lawful when the ordinance prohibiting that use was adopted. You can lose your status if you discontinue your use of the property in manner that no longer is in conflict. You can't stop and then restart your use of the property just because it used to be used that way. If a non-conforming use property is destroyed to the point where more than 50% of its value is lost, it may not be rebuilt in the same manner.

10. As tenants in common, Francois and Marcel bought a bakery. When Francois died unexpectedly, Marcel expected to own the property completely. But Francois had left his share of the restaurant to his children in his will. Who now owned the property? 1) Marcel alone 2) Francois children alone 3) Marcel and Francois children together 4) Francois wife

3) Marcel and Francois children together

17. FREC has the authority to sanction a licensee found guilty of violating the rules or laws of real estate by imposing which of the following penalties? 1) Imposing a fine up to $10,000 2) Sentencing them to jail 3) Revoking their license permanently 4) Suspending their license for 15 years

3) Revoking their license permanently

16 The Characteristics of Value includes all of the following except which one? 1) Demand 2) Utility 3) Supply 4) Transferability

3) Supply The correct word is Scarcity not Supply

21. A homeowner has multiple mortgages on his home. Which one will be considered the primary lien? 1) The loan closed on November 15th and recorded on Dec 5th, 2010 2) The loan closed on November 10th and recorded on December 7th, 20120 3) The loan closed on November 20th and recorded on Dec 4th, 2010 4) The loan closed on November 5th and recorded on Dec 5th, 2010

3) The loan closed on November 20th and recorded on Dec 4th, 2010

12 What is a promissory note? 1) The legal instrument that pledges the property as collateral 2) What releases the original borrower from obligation to the debt 3) What contains specific terms of the loan such as rate, length of term, payment, etc. 4) What allows the borrower to stay in the home

3) What contains specific terms of the loan such as rate, length of term, payment, etc.

8 Betty rented a property from Landlord Larry. While living there, Betty installed a hot tub on the terrace. While she was moving out, Larry showed up and prevented the movers from taking the hot tub. Upon going to court, which of the following is NOT a legal test a judge would use to determine whether the hot tub stays with the property? 1) Intent of the parties 2) Method or degree of attachment 3) Whether the item added value to the real estate 4) Adaptation of the item

3) Whether the item added value to the real estate

28. What does Florida statute define "immediately" as for the broker to deposit earnest monies that are turned over to him or her by an associate? 1) By the end of the week 2) Within 24 hours following receipt of the item to be deposited. Submitted answer 3) Within three business days following receipt of the item to be deposited. 4) Within one business day following receipt of the item to be deposited.

3) Within three business days following receipt of the item to be deposited.

18 The Waltens bought their home 50 years ago. For their anniversary, they decided to sell their home and travel the country in a motor home. They only had to pay out a total of $50,000 when they bought their home but were able to sell it for $500,000 (after closing costs). How much would they be taxed on as capital gains? 1) $250,000 2) $50,000 3) $200,000 4) $0

4) $0 Owners who sell a primary residence may be excluded from having to pay any tax on capital gain. When an individual sells a primary residence they do not have to pay capital gain on any gain up to $250,000. A married couple is excluded from capital gain for up to $500,000 (must be married filing jointly). To qualify for this exclusion, the home owner had to reside in the property as a primary residence for two out of the previous five years prior to the sale. The capital gain exclusion can be claimed repeatedly -after two years between sale.

13 Borrower Kathy has a starting balance of $150,000 at the beginning of January. She is being charged at 3.25% interest. Her total monthly payment for combined principal and interest is $640.50. How much of the first payment is the principal? 1) $640.50 2) $844.64 3) $406.25 4) $234.25

4) $234.25 $150,000 x .0325 = $4875 / 12 = $406.25 paid toward interest; $640.50 - $406.25 = $234.25 paid toward principal

10 How many square feet are in the legal description: The SE 1/4, NE 1/4 of Sec 3 and the SW1/4, NW1/4 of Sec 2 of T5S, R3W? 1) 2.5 2) 80 3) 108,900 4) 3,484,800

4) 3,484,800

14 What is the purchase price shown on the closing statement as? 1) A credit to the buyer only 2) A credit to the Seller only 3) A credit to the buyer and a debit to the seller 4) A credit to the seller and a debit to the buyer

4) A credit to the seller and a debit to the buyer General rule of thumb Items credited to seller The seller receives the purchase price and a 'rebate' on items that were prepaid such as home owner association fees. This is CREDITED to the seller at closing. •Total purchase price •Prepaid items •Home Owner Association Fees

14. The time period for seeking legal remedy per the statute of limitations is what? 1) Is 5 years for a written contract 2) Is 4 years for a verbal contract 3) Is 4 years for parol contracts 4) All of the above

4) All of the above

15. Which of the following people are EXEMPT from having a real estate license? 1) Any employee of an apartment community that works in an onsite rental office in a leasing capacity that is paid on a commission basis 2) Any person that works for an owner- developer and is paid a commission on a transactional basis. 3) Any person assisting someone to buy or sell real property for any type of compensation 4) Any person acting as an attorney in fact; Power of Attorney or a Court Appointed Individual for the purpose of the execution of contracts or conveyances only

4) Any person acting as an attorney in fact; Power of Attorney or a Court Appointed Individual for the purpose of the execution of contracts or conveyances only

19 The Planning Commission has authority over all of the following except what? 1) Plat Map Approval 2) Site Approval 3) Sign Control 4) Assessments

4) Assessments •Plat Map Approval •Site Approval •Sign Control

9 Which of the following is a deed often used by a bank to transfer a property that it had taken after foreclosure from the previous owner? 1) General Warranty Deed 2) Special Purpose Deed 3) Quitclaim Deed 4) Bargain and Sale Deed

4) Bargain and Sale Deed

19 The purpose of a Planned Unit Development (PUD) includes all of the following except what? 1) Provide a desirable environment 2) Economics in land development and maintenance 3) Usable attractive green spaces 4) Clustered development encouraging elimination of agricultural land

4) Clustered development encouraging elimination of agricultural land Purpose of PUD •Provide a desirable environment •Economics in land development and maintenance •Useable attractive green spaces •Clustered development preserving agricultural land

14 Brandy put $5,000 down as earnest money when she made the offer on a house. On the closing statement, what would this be shown as? 1) Debit to the buyer only 2) Credit to seller and debit to buyer 3) Debit to the seller and credit to the buyer 4) Credit to buyer only

4) Credit to buyer only General Rule of Thumb Items credited to buyer: * Any earnest money (down payment) * New or assumed mortgages * Prorated taxes * Advance rents and security deposits held by the seller. * Mortgages, new or assumed * Unpaid interest and paid rents * Security deposits held by seller

18 Brigg bought a house last year when he paid $5,000 in discount points. Over the past year he also paid $8,575 in mortgage interest, $6,200 in principal payments, $1,300 in property tax , $750 in mortgage insurance, $900 in property insurance, and $1,500 in maintenance. Which expenses are deductible from his federal taxes? 1) Homeowner's insurance of $900, discount points of $5,000 and property taxes of $1,300 2) Mortgage insurance of $750, Property Insurance of $900 and Mortgage interest of $8,575 3) Maintenance expenses of $1,500 and principle payments of $6,200 4) Discount Points paid of $5,000, mortgage interest of $8,575 and property taxes of $1,300

4) Discount Points paid of $5,000, mortgage interest of $8,575 and property taxes of $1,300

7 Per the Interstate Land Sales Full Disclosure Act (ILSA), which of the following is FALSE? 1) Developers of 25 or more lots must provide buyers with a property report 2) Developers must register subdivisions of 100 or more lots with the Bureau of Consumer Financial Protection 3) The Act was implemented to prevent fraudulent marketing schemes when land is sold without ever being seen by the buyer 4) Doesn't apply when sold to a Florida Resident even though the property isn't exempt from requirements

4) Doesn't apply when sold to a Florida Resident even though the property isn't exempt from requirements

8. When purchasing a new condominium, which form is NOT required for the buyer receive? 1) Estimated operating budget 2) Frequently Asked Questions 3) Bylaws of the Association 4) Governance Form

4) Governance Form

25. For a licensee to be found guilty of fraud, there are four elements that must be met. Which of the following statements is not correct? 1) There must be either a misstatement or a failure to disclose a material fact 2) The party must have relied on the misstatement 3) There must have been damage resulted to the party who relied on the statement 4) If the licensee didnt know about the defect they cannot be charged with fraud

4) If the licensee didnt know about the defect they cannot be charged with fraud

19 In regards to the planning commission, which statement is false? 1) Is responsible for the preparation of the comprehensive plan 2) Makes recommendations to the governing body regarding the adoption or amendment of a comprehensive plan 3) Monitors and oversees the effectiveness of the comprehensive plan 4) Requires expert knowledge to participate in the planning commission due to the extensiveness of the comprehensive plan

4) Requires expert knowledge to participate in the planning commission due to the extensiveness of the comprehensive plan The Planning Commission is: •Responsible for the preparation of the comprehensive plan or plan amendment and shall make recommendations to the governing body regarding the adoption or amendment of such plan. •Monitor and oversee the effectiveness and status of the comprehensive plan •Review proposed land development regulations, land development codes, or amendments thereto, and make recommendations to the governing body as to the consistency of the proposal with the adopted comprehensive plan

11 Which of the following statements is FALSE regarding The Residential Lead-based Paint Hazard Reduction Act? 1) A lead based paint disclosure must be made for residential property sold or rented that were built prior to 1978 2) Buyers and renters must be given an EPA booklet before the sale or lease 3) A contract to purchase must allow a 10 day inspection period which buyer can waive 4) The licensee representing the seller has no duty to the buyer or tenant regarding the disclosure

4) The licensee representing the seller has no duty to the buyer or tenant regarding the disclosure

24. In which situation must Broker Peter have his client sign an agency disclosure? 1) When Peter is working in a no brokerage capacity with a buyer 2) When Peter is working as a transaction brokerage with both a buyer and a seller 3) When Peter is working in a single agency capacity to help a buyer find a house 4) When Peter represented a seller as a single agent but wants to transition to a transaction agent so that Peter can also work with the buyer as a limited agent

4) When Peter represented a seller as a single agent but wants to transition to a transaction agent so that Peter can also work with the buyer as a limited agent

6 What is falsifying an application punishable as? 1) first-degree misdemeanor. 2) second-degree misdemeanor. 3) first-degree felony. 4) third-degree felony

4) third-degree felony

27. A contract that is voidable is described by all of the following statements except which one? Submitted answer 1) Its an invalid contract by law 2) Only binds one party 3) The unbound party is allowed to cancel the contract 4) The other party cannot void the contract

Its an invalid contract by law

14 Randall bought a property for $105,000. He sold it for $150,000. Calculate his percentage of profit. 1) 43% 2) 57% 3) 30% 4) 70%

Profit (Amount made on sale) ÷ Total cost = Percent Profit: $150,000 price - $105,000 cost = $45,000 profit: $45,000 profit / $105,000 cost = .428 or 43% profit

18 Carlotta decided to downsize from a property with a just value of $600,000 but had an assessed value of only 460,000. She bought a new home with a just value of $300,000. Using the Portability provision of the Save Our Home Benefit, what would be the taxable value of the new home for school taxes? 1) $205,000 2) $230,000 3) $180,000 4) $300,000

Take the market value (just value) of the new home and divide by the market value of the old home. Take the resulting percentage and multiply by the assessed value of the old home. $300,000/$600,000 = .5 x $460,000 = $230,000 (adjusted value)-$25,000 (additional school tax exemption)=$205,000