Ch 20 - Practice Exam -QaA

84 of 100 - The buyer purchased a home for $325,000. He obtains an 80% loan at an interest rate of 8% for 30 years. The buyer's closing is set for June 8. How much interest adjustment will the buyer need to pay? $0 $455.89 $1,310.68 $20,800

$1,310.68 Interest adjustment: loan balance x interest = annual interest / 365 = daily interest * days=adjustment

72 of 100 - The broker is charged with the responsibility of keeping his trust account balanced and reconciled. He receives a bank statement on June 5 with the ending balance showing a positive balance of $114,600. Since that time, he has outstanding deposits of Elliot-Jones, $5,000; Carlos-Johnson, $6,000; and McKay Ewing, $5,000. He has withdrawals of Love-Jamison, $6,000; Smith-Todd, $1,000; and Burns-Kaufman, $2,000. What is his trust liability at this time? $114,000 $121,600 $130,000 $150,000

$121,600

63 of 100 - An investor owns a building that generates $750,000 each year in revenue. It has a vacancy rate of 5% and operating expenses of 45%. The annual debt service is $254,700. How much is the investor's before-tax cash flow on this building? $40,000.00 $78,000.00 $137,175.00 $227,567.00

$137,175.00 750,000*.95=712,500*.55=391,875-254,700=137,175.00 PGI-VAC(loss)=EGI-op.exp=NOI-debt serv=b4tax cash flow (reserves can be deducted from EGI to get NOI, or deducted from NOI to get cash flow, BUT must be added to net income for tax calculation)

65 of 100 - The appraiser was using the cost approach to valuing an old library. He determined that the land was valued at $42,000. The site had improvements, such as driveways, walks, etc., of $9,000. The building is an older building and the appraiser figured the replacement cost at $75.00 per square foot and the building is 2100 square feet. The appraiser subtracted for physical depreciation, such as painting, $5000; tuck pointing, $1000; new roof, $2500; and structural, $4000. He subtracted for functional obsolescence in old windows, $2,500. What is the total value of the property? $51,000 $142,500 $157,000 $193,500

$193,500

50 of 100 - The buyer has a loan of $185,000 for 25 years for 8% and a factor of 7.72. How much will the buyer pay in interest if the full 25-year term is used? $78,000 $185,000 $243,460 $428,460

$243,460 monthly payment = multiply the factor times the loan amount,divide by 1,000: 185000 x 7.72/1000=1428.2 1428.2 x 25 x 12=428,460 428,460 - 185,000 = 243,460

50 of 100 - The buyer has a loan of $185,000 for 25 years for 8% and a factor of 7.72. How much will the buyer pay in interest if the full 25-year term is used? $78,000 $185,000 $243,460 $428,460

$243,460 monthly payment = multiply the factor times the loan amount,divide by 1,000: 185000*7.72/1000=1428.2 1428.2*25*12=428,460 428,460 - 185,000 = 243,460

43 of 100 - A monthly payment necessary to amortize a 30-year home loan for $154,000 at 8% is$1,130. How much interest will the mortgagor pay over the 30-year term? $125,000 $154,000 $252,800 $406,800

$252,800 monthly payment times total number of months paid minus amount of loan 1130 x 30 x 12=406,800 - 154,00=252,800

19 of 100 - David owned a building worth $1,500,000. He has debt service of $7,500 per month, of which 90% is interest. He has a potential rental income of $900,000 and a vacancy rate of 7%. His operating expenses are 40% of the Effective Gross income. In addition to his operating expenses, he has reserves of $30,000, depreciation of $50,000 and an income tax bracket of 28%. What will David's after-tax cash flow on this building be? $371,200 $382,200 $278,264 $567,903

$278,264

58 of 100 - The buyer purchased a home for $175,000. She obtained a 75% loan at 7% interest for 30 years and three discount points. She paid $5,000 as an earnest money deposit. The taxes on the property are $2500, and taxes are paid in arrears. The closing date is April 12. The buyer will owe for a title policy, $430; a preparation of deed, $30; recording, $27; tax on the promissory note; tax on the mortgage; and attorney fees of $150. She will have interest adjustment to the end of the month. What will the buyer need to bring to closing in a cashier's check, figured on the 365-day method of calculation? $25,789.23 $43,832.84 $136,941.74 $181,430.87

$43,832.84 Interest adjustment: loan balance x interest = annual interest / 365 = daily interest * days =adjustment : 131,250 x .07 = 9187.5 / 365 = 25.17 * 19 = $478.25 tax reimburse: tax / 365 = * days = from seller = 2,500 / 365 = 6.849 * 101 = $691.78 Note tax / 100 (round up) * .35c = $459.55 Mortg Tax *.002 = $262.5

27 of 100 - A property manager broker is responsible for several security deposits of his tenants in the building. He keeps careful records of all the tenants' money and reconciles the accounts monthly. How much of his own money is he allowed to keep in the property management account to make sure it has money for fees? $1,000 $2,000 $3,000 $5,000

$5,000 depositing 75 percent of such amount, when collected, in a trust account misdemeanor of the first degree, shall furnish each principal a verified copy of such accountings at the end of each calendar quarter,

8 of 100 - In a tax-differed exchange, which of the following is taxable? Like-kind property Boot Insurance value Liquid value

...

40 of 100 - What are the penalties for a broker who misappropriates advance fee accounts? 2nd degree felony 1st degree misdemeanor 1st degree felony 3rd degree misdemeanor

1st degree misdemeanor up to one year jail and $1000 fine (2. deg 60days/$500)

36 of 100 - Jane has a loan of $73,000 at 7% with a factor of 6.66 for 30 years. How much will she be able to use as principal on her next monthly payment? $25.00 $60.35 $486.18 $5,110.00

60.35 monthly payment = factor * loan amount / 1,000 $73,000* 6.66 = 486,180 /1000 486.18 monthly payment 73,000*0.07 5,110 /12 425.83 interest /mon 486.18 - 425.83 = 60.35

6 of 100 - The annual sales of a building are $500,000. The property is valued at $4,250,000. What is the gross income multiplier? 7.3 8.5 1.12 780

8.5 Gross income multiplier = Sale Price / Annual gross income Annual gross income times the gross income multiplier = sale price.

67 of 100 - A commercial broker charges advance fees for a shopping mall he manages to handle advertising and signage. Which of the following statements is True regarding Advance Fees? A broker handling advance fees must maintain the fees in a separate trust account from any other account as well as keep separate records. A broker must keep records of advance fees and report once a year. A broker must take his own operating expenses out of the advance fees as soon as they occur. A broker with an advance fee account must keep all the funds that are left at the end of the contract period.

A broker handling advance fees must maintain the fees in a separate trust account from any other account as well as keep separate records. (75% of advanced fees into trust account / Quarterly accounting / Written adv. notice of expend funds) Penalties: $1000, 1 yr Jail or treble amount of damages or all together) (DOES NOT APPLY TO AUCTIONS)

32 of 100 - What is the mortgage document which gives a third party a nonpossessory naked title to the property? A deed of trust A mortgage A promissory note A junior mortgage

A deed of trust

92 of 100 - Who creates deed restrictions on a property? A grantee A vendee A grantor A vendor

A grantor

69 of 100 - The lender has a loan that is in a second position in priority to another loan. What type of mortgage is this? A graduated mortgage A fully amortized mortgage A junior mortgage A partially amortized loan

A junior mortgage

12 of 100 - Which type of relationship is an agency relationship? A seller and a buyer A landlord and a tenant A landlord and a property manager An optionee and an optionor

A landlord and a property manager

55 of 100 - The Uniform Land Sales Act 498 refers to a person who owns any interest in subdivided land or is engaged in the disposition of subdivided land either directly or indirectly or through the services of an employee, agent or independent contractor. What is this person called? A developer A builder A subdivider A subdivision planner

A subdivider "Subdivider" means a person who owns any interest in subdivided lands or is engaged in the disposition of subdivided lands either directly, indirectly, or through the services of an employee, agent, or independent contractor. The act regulates disposition of any interest in subdivided lands, including financial operations entered into by companies and persons to prevent fraudulent / misleading methods / unsound financing techniques

59 of 100 - A tenant will not move out of the apartment after the landlord has given the appropriate notice. The landlord sends him a letter asking him to vacate the building, but he still refuses to move. What is this type of tenant called? A holdover tenant A tenant at sufferance A lifetime tenant A joint tenant

A tenant at sufferance A holdover tenant: remains in a property after expiration of lease. If landlord continues to accept rent payments, the tenant can continue to legally occupy the property.

52 of 100 - The settlement agent from a title company gives the buyer and seller a statement of conditions to be met. If the seller agrees that the property has no new encumbrances since the initial title search and that his existing loan will be paid off. the title company promises to insure for the amount of the buyer's new loan. This written commitment is called: A closing statement A title binder A title policy A indemnification sheet

A title binder A title binder, also known as an interim binder, is not a title insurance policy, but is, instead, a commitment to issue a title policy. The title commitment comes before closing; the title policy is issued after closing. The commitment says that a title company is willing to issue title insurance under certain conditions and if the seller fixes certain problems. The policy provides coverage for the property.

88 of 100 - Which of the commercial leases is based in part of the cost of the Consumer Price Index? A Percentage Lease. A Gross Lease A Step-up Lease An Index Lease

An Index Lease Step-up: price increases at specific times Gross Lease: tenant pays a flat amount, landlord all property expenses Percentage lease:tenant pays base rent plus a percentage of revenue.

22 of 100 - All of the following must be present in a listing contract to satisfy the Statute of Frauds EXCEPT: A proper identification of the property. A signature of the owner. The price, terms and conditions of selling the property. An automatic extension of the listing expiration date.

An automatic extension of the listing expiration date.

26 of 100 - When does the disclosure for radon gas have to be given to a prospective purchaser in Florida? At the time of the listing contract. At the time the good faith estimate of settlement costs is given to the purchaser. At the time of executing a sale contract or a rental agreement. At the closing table.

At the time of executing a sale contract or a rental agreement. Law case Johnson v. Davis, 1986 Florida Supreme Court latent defects must be disclosed to the buyer prior to the seller entering into a real estate sales contract for residential property. Sellers Real Property Disclosure Lead Based Paint Disclosure Disclosure of ad valorem taxes Florida HOA Disclosures Condominium and HOA Disclosure Declaration of the Condominium Articles of Incorporation A set of the Condominium Association Documents & Bylaws. • A copy of the Condominium Association Budget. • A list of frequently asked questions - The FAQ's. • A list of Rules and Regulations. • A copy of the Application to Join the Condominium Association. • Condominium Governance Form.

81 of 100 - A fiduciary relationship between a licensee and a client is created when a: Seller speaks with a sales person about listing a property. Buyer enters into a buyer representation agreement with a sales associate. Broker shows a buyer a property. Property manager shows a prospective tenant a property in the rental inventory.

Buyer enters into a buyer representation agreement with a sales associate.

38 of 100 - The Federal Fair Housing Act prohibits discrimination in all EXCEPT: Houses The Elks Club Residential lots Commercial office suites

Commercial office suites

30 of 100 - The person who does not have representation in a transaction broker relationship is called: Buyer. Seller. Client. Customer.

Customer.

94 of 100 - A seller sold her home and the closing will be November 10. Her taxes are $3,250, in arrears, and the closer will use the 365-day method of calculating the figure and will figure until midnight the day before closing. How will the tax proration appear on the closing statement? Credit the seller $473.91 and debit the buyer $2,776.08. Debit the seller $2,776.08 and credit the buyer $2,776.08. Debit the seller $473.91 and credit the buyer $2,776.08. Debit the seller $473.91 and debit the buyer $473.91.

Debit the seller $2,776.08 and credit the buyer $2,776.08.

78 of 100 - The EPA is concerned with hazardous waste clean-up by the Potentially Responsible Parties. In order to prove an innocent landowner defense, a landowner must do all of the following EXCEPT: Provide legally required notices. Take reasonable steps to prevent continuing release or threatened future releases. Deposit a surety bond with the EPA in the amount of $500,000 or the amount of the claim, whichever is less. Conduct all appropriate inquiries.

Deposit a surety bond with the EPA in the amount of $500,000 or the amount of the claim, whichever is less.

95 of 100 - Curtis has a commercial property valued at $650,000. He has a loan on the property for $400,000 for 20 years. The difference between the value and the loan is called? Leverage Liquidity Equity Capitalization

Equity

47 of 100 - Susan gave a listing agreement to her broker to sell her home. Her best friend, Katherine, decided to buy it and Susan did not want to pay the broker his commission. The broker responded that he was to be paid no matter who the buyer was. What type of listing did Susan have? Exclusive Agency Listing Open Listing Exclusive Right To Sell Net Listing

Exclusive Right To Sell

39 of 100 - The Federal Fair Housing Act of 1988 added which of the protected classes to Federal Fair Housing? National Origin Status Marital Status Age Status Familial Status and Handicapped Status

Familial Status and Handicapped Status

97 of 100 - A broker uses his office in his home exclusively for business. He has a sign and all the requirements under license law and he wants to deduct his home office as a business expense. What IRS form would he use to do this? Form 1099 Form W-2 Form A Form C

Form C

23 of 100 - All of the following are requirements to be licensed as a Community Association Manager EXCEPT: Being of good moral character with a history of honesty and fairness. Being 18 years of age or older. Having completed a 30-hour course successfully. Having completed the appropriate application and paid the appropriate fee.

Having completed a 30-hour course successfully. CAM requirements: 18 hours education within 12 months prior be at least 18 years old Pass exam within 12 months of course completion Be of good moral character as evidenced by fingerprints and application information NOTE: Florida residency is not required.

46 of 100 - Charles has a mortgage on his property and he has to pay income tax. The accountant tells him to bring in the papers on the loan, that he may have a tax deduction. He has a new loan of $125,000 with an interest rate of 8% over 30 years and a monthly payment of $917.21. What could the buyer take as a deduction on his income tax? He could take off the whole amount of his monthly payments: $11,006.52 for the first year. He could take off the interest on the loan of approximately $10,000. He can't take off any payments or interest, only the closing costs. He must pay tax on the loan he received for buying the house.

He could take off the interest on the loan of approximately $10,000. $125,000 x 0.08 = 10,000

20 of 100 - The application for licensure for a real estate broker requires that the broker must disclose if he has ever done all EXCEPT: He must disclose if he has ever been denied a license in any other regulated profession. He must disclose if he has ever been called by another name or done business under another name. He must disclose if he did not pass the broker's exam on the first attempt. He must disclose if he is currently a patient at a mental health facility.

He must disclose if he did not pass the broker's exam on the first attempt.

99 of 100 - The sales associate completes a sales contract for a buyer on a Sunday afternoon. The contract is accepted on Sunday night. When does the sales associate have to get the earnest money check to the broker? Monday by 5:00 p.m. Tuesday by 12:00 p.m. Wednesday by 5:00 p.m. Immediately

Immediately

2 of 100 - In which of the following would the income approach as a means of determining value be the most useful? In pricing an old church for insurance. In pricing a condominium for a buyer's new loan. In pricing a farm for an investor. In pricing an apartment complex for an investor.

In pricing an apartment complex for an investor.

91 of 100 - Broker Bill took money out of his trust account in order to pay some of his utility bills that were due immediately. He reasoned that he would get his commission soon; so the money would be his anyway and why not pay his bills now? The FREC did not agree with that position and charged him with a violation of license law. What did Bill do? In the act of taking money out of the trust fund, Broker Bill was guilty of commingling the funds. In the act of taking money from his trust account, which was not his, to pay his bills, Broker Bill committed conversion of the trust fund. In the act of taking money from the trust account, Broker Bill was guilty of concurrency. Bill did nothing wrong because the money was going to be his anyway. Once the FREC sees the records, Bill will be fine.

In the act of taking money from his trust account, which was not his, to pay his bills, Broker Bill committed conversion of the trust fund. First degree misdemeanor violation of Florida Statute 475 Up to one year jail and $1000 fine

79 of 100 - The Department is authorized by Florida law to do all of the following EXCEPT: Inspect a brokerage firm for an office entrance sign. Inspect a real estate office to review all licenses to see if all continuing education requirements have been met. Inspect a real estate office during any hour to inspect monthly reconciliation statements, bank statements and ledger books. Inspect a real estate office to inspect all property management contracts, agreements and leases.

Inspect a real estate office during any hour to inspect monthly reconciliation statements, bank statements and ledger books.

83 of 100 - The recording of liens on a property is important because: It makes one lien more valuable than another. It gives leases priority over the mortgage liens. It gives a mechanic's lien a priority over 1st mortgage. It gives each of the liens a priority, an order after the 1st mortgage.

It gives each of the liens a priority, an order after the 1st mortgage.

57 of 100 - What is the MLS (Multiple Listing Service)? It is a collection of owners selling their property online. It is a collection of only residential housing. It is a collection of listings marketed by the member brokers to other members. It is a listing of multi-family properties for sale.

It is a collection of listings marketed by the member brokers to other members.

66 of 100 - What is a contingency when it is used with a contract? It is a financial plan. It is some type of condition that must be met before the contract is fulfilled. It is a type of legal language for identifying the legal description. It is the names of the parties to satisfy the Statute of Frauds.

It is some type of condition that must be met before the contract is fulfilled.

18 of 100 - What is the purpose of the Irrevocable Consent to Service? It is to make sure resident brokers are in compliance with record-keeping responsibilities. It is to make sure that the sales associates are working for brokers. It is to make sure that nonresident brokers respond to investigatory demands of the Department and FREC. It is to make sure that all members of the FREC are entitled to serve.

It is to make sure that nonresident brokers respond to investigatory demands of the Department and FREC.

89 of 100 - Jackie has her broker's license and it is past due for renewal. She has moved in the last month and she forgot to inform the FREC of her new address. The Department sent her renewal notice to the old address and, with the move, Jackie didn't even think about renewing her license. She realized what happened about two weeks after the renewal date. Can Jackie get her license now? Jackie has lost her license. She had better not do any real estate activities until she has completed the broker course again. Jackie can appeal to the FREC. Because she didn't get her renewal notice, she should get an extension of the renewal date. Jackie's license is currently involuntarily inactive. Since she has already taken her continuing education classes, she will need to pay the appropriate fees to re-instate her license. Jackie cannot renew her license as a broker. She will need to take the sales associate class before she can go on to be a broker.

Jackie's license is currently involuntarily inactive. Since she has already taken her continuing education classes, she will need to pay the appropriate fees to re-instate her license.

82 of 100 - A sales associate was asked by an Asian couple to show them homes located in areas where families were also Asian. The couple felt they would be more at home with other Asian families. How should the agent respond? Asian areas are great areas to live in. Licensees don't collect demographic data; that information is not available, but I will be happy to show you property in your price range in any area Most of the families in Brooklyn Heights are Asian; there are a variety of Thai, Japanese and Vietnamese families. I will be glad to show you home in Brooklyn Heights. Because I only speak English, I cannot communicate with the Asian families, but I will find someone to help you.

Licensees don't collect demographic data; that information is not available, but I will be happy to show you property in your price range in any area

49 of 100 - A licensee who is working as a transaction broker for the seller and buyer in a real estate transaction is responsible for the use of limited confidentially to both parties. What does this mean? Limited confidentiality is telling all things financial about the buyer to the seller. Limited confidentiality is telling all things financial about the seller to the buyer. Limited confidentiality means that disclosures, such as the seller is willing to take less or the buyer will pay more, will not occur. Limited confidentiality is telling nothing about either party to the other.

Limited confidentiality means that disclosures, such as the seller is willing to take less or the buyer will pay more, will not occur.

14 of 100 - Lyle is a partner in a small manufacturing business. He helps with the day-to-day operations of the manufacturing side of the plant. Despite their best efforts, the company is losing money. Lyle's attorney tells him to take off the losses on his income tax. What allows Lyle to be able to do that? Lyle is an active participant in the business and, as such, can deduct losses from the business. Lyle is considered a passive participant in the business; so he can deduct his losses. Lyle is considered a sole proprietor; so he can deduct his losses. Lyle is considered an employee of the company; so he can take off the loss.

Lyle is an active participant in the business and, as such, can deduct losses from the business.

68 of 100 - A Growth Management Plan is part of the requirement under the Growth Management Act of 1985 for Florida developers. The elements included in the plan are all EXCEPT: Traffic circulation. Intergovernmental coordination. Conservation of natural resources. Malls and shopping centers.

Malls and shopping centers. Certain elements must be coordinated with the plans of surrounding areas. These provide for: Future land use Traffic circulation Water, sanitary, and storm sewers and solid waste Conservation of natural resources Recreation Housing Coastal zone protection, where relevant Intergovernmental coordination Utilities

76 of 100 - Jack makes his living renting mobile home lots to the snow birds who come to Florida. Does Jack need a license? Yes. Because the lot is real estate, Jack needs a license. Yes. Because a lot has real estate taxes on it, Jack is considered a real estate sales person. No. Agents who rent mobile home lots do not need licenses in Florida. No. The agents who rent to transient individuals do not need real estate licenses.

No. Agents who rent mobile home lots do not need licenses in Florida.

15 of 100 - To depreciate property that is used in business, certain guidelines must be followed. Which of these would the IRS disallow? Property that is used in business. Property that is owned by the business. Property that has a determinable useful life. Property that will last no more than one year.

Property that will last no more than one year.

80 of 100 - The substance that is colorless, odorless and hazardous to humans as well as the second leading cause of lung cancer is: Asbestos. Formaldehyde. Lead paint. Radon.

Radon.

75 of 100 - Ramon is representing the seller in a single agency relationship. The seller has indicated to Ramon that he does not want a sign placed in the yard because his wife has Alzheimer's and it makes her cry to see the sign. What should Ramón do? Ramon should be obedient and follow the wishes of his seller. Ramon should practice disclosure and make sure the seller understands that yard signs bring in more sales than newspaper ads. Ramon should follow the direction of his broker and not listen to the seller. Ramon should consult the FREC for advice.

Ramon should be obedient and follow the wishes of his seller.

71 of 100 - The seller is determined that he will not sell his home to anyone of the Chinese race. When the sales associate meets with him and tells him that such a distinction is discriminatory, the seller continues to maintain his position on selling to the people of Chinese descent. What can the sales associate do? Take the listing and hope the seller doesn't get a listing from Chinese people. Take the listing but talk to the broker about how to handle the situation. Refuse to take the listing. Refer the listing to another broker who is willing to take the listing for a referral fee.

Refuse to take the listing.

54 of 100 - Which of the following regulates the advertisement of credit terms available for the sale of a home? Equal Credit Opportunity Act RESPA Federal Fair Housing Regulation Z

Regulation Z The Truth in Lending Act (TILA) is implemented by the Board's Regulation Z (12 CFR Part 226).promote informed use of consumer credit, requiring disclosures about its terms and cost.(Trigger Terms)protections. Federal Fair Housing Act (Title VIII / Civil Rights Act of 1968) outlaws: refusal to sell or rent a dwelling because of race, color, disability, religion, sex, familial status, or national origin. The Equal Credit Opportunity Act (ECOA) outlaws discriminate against any applicant / credit transaction, on the basis of race, color, religion, national origin, sex, marital status, or age, applicant's income derives from a public assistance program or has exercised any right under the Consumer Credit Protection Act

73 of 100 - The Brokers' Relationship Act applies to: Nonresidential transactions. Auctions. Appraisals. Residential sales.

Residential sales. Does not apply to: nonresidential transactions; auctions; appraisals; and dispositions of any interest in business enterprises or business opportunities, the rental or leasing of real property, (unless option to purchase and 4 or less ...); a bona fide "open house" or model home showing (no eliciting confidential information and such; unanticipated casual conversations between a licensee and a seller or buyer (no "like above); responding general factual questions; providing general factual information, oral or written, about the qualifications, background, and services of the licensee or the licensee's brokerage firm;

28 of 100 - Recruitment of new sales associates is important. To recruit successfully, a broker must do all EXCEPT: Setting recruitment goals that managers understand. Determine if new sales associates are needed in the brokerage company. Determine if experienced sales associates are needed. Setting recruiting goals that match the racial makeup of the neighborhood.

Setting recruiting goals that match the racial makeup of the neighborhood.

60 of 100 - Becky is a single agent representing the seller in a transaction. The seller has AIDS and discloses that fact to Becky. Becky does not tell the other agent nor is it disclosed by either the seller or Becky to the buyer. The buyer sues Becky for nondisclosure of a material fact. Does the buyer have a case? She may have a case, but she probably won't win because Florida Law 689.25 clearly states that AIDS is not a material fact. She may have a case, since this is clearly a physically-impacted property. She may have a case, since this is a psychologically impacted property. This property is stigmatized and the broker should have disclosed it even if the seller did not.

She may have a case, but she probably won't win because Florida Law 689.25 clearly states that AIDS is not a material fact.

17 of 100 - The borrower's right to reclaim ownership of his property after foreclosure is called: Estoppel Escalation Equitable redemption Statutory redemption

Statutory redemption

62 of 100 - What law requires that the closer must use the Closing Disclosure form for any closing related to federally-related mortgage loans? The Equal Credit Opportunity Act TILA/RESPA Integrated Disclosure (TRID) Rule Regulation Z Federal Fair Housing Acts

TILA/RESPA Integrated Disclosure (TRID) Rule

77 of 100 - The State of Florida and the Federal Government are concerned about clean water. Under the Clean Water Act, Section 404, who can issue permits to allow dredging or fill material in navigable waters in Florida? The FREC The Army Corps of Engineers The EPA The Divisions

The Army Corps of Engineers

44 of 100 - The seller refuses to sell his property to a mixed race couple--white and African American. What is the best legal recourse the couple has against the seller? The Federal Fair Housing Act of 1968 The Americans With Disabilities Act of 1991 The Civil Rights Act of 1866 The Federal Fair Housing Act of 1988

The Civil Rights Act of 1866 In 1866, Congress passed the Civil Rights Act of 1866. essentially prohibits discrimination in the purchase, sale, lease or conveyance of real property on the basis of race or color. The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) introduced meaningful federal enforcement mechanisms. It outlaws: Refusal to sell or rent a dwelling to any person because of race, color, disability, religion, sex, familial status, or national origin.

9 of 100 - What does the phrase "legally sufficient" in regard to real estate mean? The complaint must be true and justified. The complaint must allege that a violation of real estate law has occurred. The complaint may be an issue of one broker owing another broker money. There must be a logical series of events that can make a complaint be true.

The complaint must allege that a violation of real estate law has occurred.

4 of 100 - Jake, a broker from Indiana, is under investigation by the Indiana Real Estate Commission for commingling his trust account. He decides to leave Indiana and become a Florida resident and a broker in Florida. He does not disclose that he is currently under investigation in Indiana. What will likely happen to Jake's application for licensure? The Department will investigate Jake by contacting the Indiana Commission. A Florida license cannot be issued to Jake while he is under investigation in another state. The Department will accept Jake's application, since he is from a mutual recognition state, and pass it on with no problem. Jake will have to wait until his investigation is cleared up and he can get a license automatically. Jake will have to become a sales associate first, since he is from a mutual recognition state.

The Department will investigate Jake by contacting the Indiana Commission. A Florida license cannot be issued to Jake while he is under investigation in another state.

74 of 100 - The appraiser has been asked to appraise an apartment complex for an investment buyer. Which form of estimating value would be the most beneficial to the investor? The Income Approach The Summation Approach The Market Data Approach The Gross Income Multiplier

The Income Approach Gross income multiplier (GIM) rough measure of value of an investment property (property's sale price divided by gross annual rental income) Sales comparison (market data) approach: aaluing single-family homes and land. An estimate of value by comparing a property with recently sold properties with similar characteristics. "summation approach." old for "cost approach" = cost to build an equivalent building. Market price for property = cost of land plus cost of construction, less depreciation.

100 of 100 - SARA calls for which action? A book called "Settlement Costs and You" A book on the Energy Efficiency Rating The National Priorities List A book on lead-based paint in the home

The National Priorities List

3 of 100 - What law requires that a buyer and seller sign a sales contract? The Federal Fair Housing Act RESPA The Equal Credit Opportunity Act The Statute of Frauds

The Statute of Frauds

41 of 100 - Jones is told by his accountant that his portfolio income is quite large and he may want to consider a tax shelter to reduce his tax burden. What does the accountant mean by portfolio income? The accountant means money from wages and salaries. The accountant means money from stock, bonds and royalties. The accountant means money gained from loaning money. The accountant means money he has set aside for college education and funeral expenses for his parents.

The accountant means money from stock, bonds and royalties.

41 of 100 - Jones is told by his accountant that his portfolio income is quite large and he may want to consider a tax shelter to reduce his tax burden. What does the accountant mean by portfolio income? The accountant means money from wages and salaries. The accountant means money from stock, bonds and royalties. The accountant means money gained from loaning money. The accountant means money he has set aside for college education and funeral expenses for his parents.

The accountant means money from stock, bonds and royalties. A tax shelter is a vehicle used by taxpayers to minimize or decrease their taxable incomes and, therefore, tax liabilities 401(k), 403(b), IRA, charitable contributions, student loan interest deduction, mortgage interest deduction, deduction for certain medical expenses, etc.

5 of 100 - The seller and buyer have agreed: The buyer will purchase the seller's home for $225,000. The buyer will assume the seller's loan of $150,000, beginning at the time of closing. What will the entries into the closing statement be for document taxes for Florida? The closer will debit the seller $1,575 for the deed tax. The closer will debit the buyer $30 for the mortgage tax. The closer will debit the seller $1,575 for the deed tax and the buyer $525.00 for the promissory note and $30 for the mortgage tax. The closer will debit the seller $1,575.00 for the deed tax, and the buyer $525.00 for the promissory note.

The closer will debit the seller $1,575.00 for the deed tax, and the buyer $525.00 for the promissory note.

37 of 100 - Annualized debt service on an investment piece of property most nearly means: The amount of the monthly principal and interest, annualized. The amount the investor owes for his liabilities. The amount of money needed for a down payment. The amount of money used in effective gross income.

The amount of the monthly principal and interest, annualized.

35 of 100 - The property management agreement between a landlord and a broker is similar to the relationship between: The broker and a tenant. The broker and another broker. The broker and a seller. The broker and a customer.

The broker and a seller.

93 of 100 - A broker handles the sales of existing condos for sellers in a large building. A prospective buyer came in and looked at a two-bedroom condo, liked it and put down earnest money to go with the offer. The seller accepted the offer and it was considered a contract. Within three days of the date on the contract, the prospective buyer notified the broker that she was canceling the contract and that she wanted her earnest money back. What can the broker do? The broker will need to get a release from the seller before releasing the earnest money to the purchaser. The broker cannot give the money back to the purchaser. She has purchased a condo and she needs to finish the sale. The broker can give the earnest money back to the purchaser without the seller's written consent if it is within the three-day limit. There is a three- day right of recession on the sale of existing condos in Florida. The broker cannot get in the middle of this transaction. He must consult his attorney or the FREC to decide what to do next.

The broker can give the earnest money back to the purchaser without the seller's written consent if it is within the three-day limit. There is a three- day right of recession on the sale of existing condos in Florida.

31 of 100 - The broker prepares the sales contract for the buyer and brings it to the broker working for the seller. In the wording of financing, where the earnest money deposit is to be listed, the words "not applicable" appear. Why would this appear on a sales contract? The broker forgot to fill it in and put the wrong words in the wrong place. The broker did not feel that an earnest money deposit was essential to the contract. The broker knew that the buyer was a VA buyer and that an earnest money deposit was not required. The broker knew that the buyer was good for the loan; so he didn't feel it was necessary.

The broker knew that the buyer was a VA buyer and that an earnest money deposit was not required.

70 of 100 - A broker may do all of the following without violating license law EXCEPT: The broker may list and sell property. The broker may give opinions of title. The broker may complete standardized forms. The broker may hold money in trust accounts for buyers, sellers, tenants and landlords.

The broker may give opinions of title. Frec may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $5,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing,

85 of 100 - What type of disclosure is required for ad valorem taxes to the buyer? There is no disclosure required. It is up to the buyer to find out for himself. The buyer should have a statement either in the contract or on a separate document that the buyer should not rely on the seller's current taxes as the amount the buyer will have to pay. The taxes the buyer has to pay will be much higher after the closing on the property; so it doesn't have to be disclosed at closing. No disclosure is required under Florida law for the current taxes of the seller.

The buyer should have a statement either in the contract or on a separate document that the buyer should not rely on the seller's current taxes as the amount the buyer will have to pay

48 of 100 - Jim made an offer on a property that he liked in a small city. The offer was accepted by the seller and they agreed on a closing date. The sale contract called for a title search, but when the title company searched for the property, they found it did not exist in the courthouse records because the city had changed the streets and plat map. What can Jim do with this situation? The incorrect legal description means that the property is not for sale. The incorrect legal description is grounds for Jim to rescind the contract. The incorrect legal description will not affect the sale. The incorrect legal description is not important if the right street address is listed.

The incorrect legal description is grounds for Jim to rescind the contract.

96 of 100 - When a loan is fully amortized, how does the payment work to pay off the note? The principal is more at the beginning and interest is lower, but the payment remains the same. The interest is higher at the beginning and principal is lower, but the payment remains the same. The payment increases as the loan balance goes down. The payment decreases as the loan balance goes down until there is no balance left.

The interest is higher at the beginning and principal is lower, but the payment remains the same.

86 of 100 - The sellers of 123 Mulberry Lane were killed in a car crash yesterday. What will happen to their listing of their home? The children of the sellers will be responsible to carry on the listing. The FREC will name someone to help the children sell the property. The listing is cancelled upon the death of the sellers. After the funeral the broker will need to find out who the real owner is and get him to sign the listing.

The listing is cancelled upon the death of the sellers. Termination of Agency: Fulfillment Time limit Breach or cancellation renunciation by the broker ("I quit") or revocation by the principal ("You're fired"). Mutual consent Death or incapacitation (either party) Destruction of property or change (zoning.condemnation) Bankruptcy (either party) or foreclosure of the property occurs.

56 of 100 - The appraiser has given the property a high market value based on the maximizing use of land value. Which of the principles of value is he using to obtain this value? The principle of competition The principle of highest and best use The principle of contribution The principle of change

The principle of highest and best use principle of contribution: worth of an improvement is what it adds (or contributes) to the market value of the entire property, not what it cost to add the improvement. principle of change realizes the economic and social forces that affect value."Is this community experiencing growth, stability, decline, or restoration?" Principle of Competition: Excess profit breeds ruinous competition. Revenue/profits/value drop. Competition generally benefit to the real estate trade. It produces increased efficiency in developing and operating properties, economic rents, and realistic prices.

64 of 100 - Susie has been found guilty by the FREC and has been issued a Probation Order. How long will the probation last and when will it begin? The probation is for 30 days and will begin as soon as the FREC meets. The probation is for 90 days and will begin 30 days after the filing of the final order. The probation is for 120 days and begins 60 days after the filing of the final order. The probation is for five years and will begin as soon as all appeals have been heard.

The probation is for 90 days and will begin 30 days after the filing of the final order.

33 of 100 - Liens that have the highest priority are: The liens that are recorded first. The real estate tax liens. The judgment liens. The mortgage liens.

The real estate tax liens. Lien Priority: First in Time, First in Right Exceptions : Certain liens,property tax liens, special assessment taxes, some HOA and COA assessment liens (called "super liens"), and mechanic's liens can have priority over previously recorded liens.

90 of 100 - Barbara thinks she wants to become a real estate broker. She has no prior real estate experience nor has she taken the sales associate exam. She is 20 years old and ready to begin. To be a broker, she should consider all the following EXCEPT: The education requirements for a sales associate and a broker. The experience requirements for a broker. The legal requirements to be a broker. The requirement to post a surety bond.

The requirement to post a surety bond.

10 of 100 - The reasons for doing a CMA as a sales associate or broker are many. All of the following are reasons for completing a CMA EXCEPT: The sales associate gains knowledge of the property and the area. The sales associate gathers accurate, current information about houses that have sold which are similar to the subject house. The sales associate can share information from a CMA with a buyer if he represents the buyer in order to help the buyer make a buying decision. The sales associate can determine the market value for a lender.

The sales associate can determine the market value for a lender.

24 of 100 - The IRS allows deductions for an additional home called the Second Home Tax Advantage. Which is a true statement regarding this law? A second home that is rented out at fair market value does not have to be used by the owner at all. The second home must be used if it is not rented out throughout the whole year. The second home is allowed to take off the property taxes and the interest under certain circumstances, as is a primary home. Points on the loan of a second house are deductible, just as they are on a primary home.

The second home is allowed to take off the property taxes and the interest under certain circumstances, as is a primary home. RS requires points paid on a mortgage for a second home to be spread out over the mortgage loan's life. Second home can be rented to another party for up to two weeks (14 nights) each year without that income begin reported to the IRS.

24 of 100 - The IRS allows deductions for an additional home called the Second Home Tax Advantage. Which is a true statement regarding this law? A second home that is rented out at fair market value does not have to be used by the owner at all. The second home must be used if it is not rented out throughout the whole year. The second home is allowed to take off the property taxes and the interest under certain circumstances, as is a primary home. Points on the loan of a second house are deductible, just as they are on a primary home.

The second home is allowed to take off the property taxes and the interest under certain circumstances, as is a primary home. RS requires points paid on a mortgage for a second home to be spread out over the mortgage loan's life. Second home can be rented to another party for up to two weeks (14 nights) each year without that income being reported to the IRS.

45 of 100 - A seller charges the broker with cheating him of money on his home through a misrepresentation of the right price of the home, in addition to a violation of the law of agency. What can happen if the seller sues? The seller can file a civil suit and, if the suit alleges a violation of Chapter 475, he can seek a claim from the Real Estate Recovery Fund. The seller cannot sue, since the transaction is already closed. The seller will need to sue the buyer, not the broker. The seller cannot get a claim from the Real Estate Recovery Fund; only buyers and tenants can receive money from this fund.

The seller can file a civil suit and, if the suit alleges a violation of Chapter 475, he can seek a claim from the Real Estate Recovery Fund.

87 of 100 - Paul is reviewing papers with the seller in order to list the seller's home. The seller has a survey in all the papers he has and he asks the broker why the survey would be important to have. What should the broker say? The survey will tell the buyer how many square feet are in the home. The survey should show all the encroachments on the property. The survey will guarantee the title. The survey will tell the buyer how much the property is worth.

The survey should show all the encroachments on the property.

21 of 100 - A building has no apartments that are without tenants and the property manager is concerned because he feels that the rent may be too low. He says that when the property manager is making the budget, there is always a certain loss between the gross income and the effective gross income. What is this called? The vacancy rate The occupancy rate The operating income The net loss income

The vacancy rate

53 of 100 - A lease-purchase contract has several major risks involved; so brokers are advised to use great caution with this type of contract. What would not be a risk in a lease purchase? There is a liability risk if the prospective buyer moves into the home and breaks his leg while the title is still in the name of the seller. There is a risk that the seller will not know how to read a credit report or analyze it enough to know if the prospective buyer is a good risk. There is a risk that the seller could encumber the title during the time that the prospective buyer was renting the property. There is a risk that the seller will pay off the loan on the house.

There is a risk that the seller will pay off the loan on the house.

1 of 100 - Vickie is a little spacey as a real estate sales associate. She signs a single agency representation with a seller. Her broker has reminded her several times to be careful to lock up a home that she has on an open house on Sunday. Last Sunday, Vickie forgot to lock up again as she was in a hurry to get home. As a result, burglars came in and took all the electronic equipment in the home before the sellers got home. What is this an example of? This is an example of a lack of due care. This is an example of lack of loyalty. This is a lack of accounting. This is simply unprofessional.

This is an example of lack of loyalty.

61 of 100 - Judy is curious about the sales associate post-license course. She wants to know what subjects will be taught in the course that are required by law. All these subjects are required for the post-license course EXCEPT: Property Management Real Estate Finance Time Management for Sales Associates Agency Law

Time Management for Sales Associates

13 of 100 - Tony has a problem with his garage. He needs to add an addition on to the garage so that he can get his mother's wheelchair out of the car and on to the sidewalk. By building the garage to the sidewalk, it will be extended 2 inches on one corner beyond what the city allows for building. What can Tony do? Tony can ask for a special hardship variance. Tony can claim nonconforming use. Tony should talk to the Federal Fair Housing management. Tony should ignore the city and build it anyway. It can be spot zoning.

Tony can ask for a special hardship variance.

11 of 100 - A property manager has many important jobs to do, but the most important job is: Supervising the maintenance staff. Being able to understand and deal with ecological and environmental issues. Having a knowledge about lease space, including space planning, area design and building layout. Understanding that a property manager must provide the highest return on the building within the objectives of the owner.

Understanding that a property manager must provide the highest return on the building within the objectives of the owner.

16 of 100 - The use of borrowed money is called leverage. Which of these loans can have the most leverage for the buyer? Conventional 95% Conventional insured FHA 203B VA

VA (no down payment) FHA 203 (b) (most comon insured loan product by FHA, down up to 3.5% FHA 203(k) intended for homes needing significant rehabilitation Conventional: under 20% PMI required, from up to 5%

29 of 100 - When would a CMA be done? When a broker is assessing the value for an insurance company. When a broker is determining a range of values for a seller. When a broker is determining the market value for a lender. When the broker is determining the market value for an investor.

When a broker is determining a range of values for a seller.

98 of 100 - The rental broker sells a rental list to a prospective tenant. The tenant calls and goes to all the properties listed, only to discover that the property list was at least a month out of date and he was unable to find any housing. He calls the broker and demands his money back for an out-of-date list. Can the tenant do this? Yes. The broker was required to have the tenant sign a one-page contract that stated that if the list was not accurate, the tenant had the right to get a refund of 100% of his fee. Yes. The Board of Realtors® code of ethics requires that the broker return the money to the tenant as a matter of fair play. No. The tenant did not try hard enough to find a rental place. No. The broker's list was not a guarantee of being able to find a rental property. The tenant needs a single agency relationship with the broker to do this.

Yes. The broker was required to have the tenant sign a one-page contract that stated that if the list was not accurate, the tenant had the right to get a refund of 100% of his fee. Bad Rental Information 1.degree misdemeanor