Florida Real Estate Exam

Florida allows brokers to deposit personal funds into a sales escrow account. What is the allowed limit of personal funds?

$1000

Payments from the Real Estate Recovery Fund are limited for each broker to an aggregate

$150,000

Kevin purchased a property that is currently valued at $150,000 and expected to appreciate 5% a year for the next 5 years. What will the value be in 5 years?

$191,442 $150,000 is 100% of the current value to add 5% is is expressed as 1.05 150,000*1.05(5) = 191.442

Seller Gary needs to net $15,000 on the sale of his home. His loan payoff is $160,000, his closing costs are $5500, and commission is 7%. What is the lowest offer Gary can accept?

$194,086 15,000+160,000+5,500=180,500 180,500/0.93% (seller's portion after commission) = 194,086

Sharon purchased a home for $100,000 with an 6% annual interest rate. Her payments are $800 per month. How much of her first payment will go to principal?

$300 $100,000 * 6% = $6000 $6000/12months = $500 monthly interest 800-500=300

Karen recently sold a home for 6% commission. If her commission was $20,700, how much did the property sell for?

$345,000 $20,700/0.06=345000

Seller Jared owes property taxes on closing day since taxes are paid in arrears. The taxes are $1,300. What is the seller's share of taxes if closing is April 10th using the 365 day method and the seller owns the day of closing?

$356 $1,300/365 = $3.56 100 days * $3.56 = $356

Florida allows brokers to deposit personal funds into a property management escrow account. What is the allowed amount of personal funds in this type of account?

$5000

A new roof costs $7,500 and the economic life of the roof is 30 years. Using the straight line depreciation method, what would the value of the roof be after 5 years?

$6,250 7500/30 years = $250 $250 * 5 years = $1,250 total depreciation $7,500 - $1,250 = $6,250

Agent Amanda just closed on a home that sold for $525,000. Her commission rate was 5% with a 50/50 co-broker with the selling broker, and a 60% split with her broker. How much did Amanda receive?

$7,875 525,000*5%=26,250 26,250 split 50/50 = 13,125 13,125*60%=7,875

Which of the following best describes the legal concept of personal property?

Any item of property that is not definable as real property.

Which of the following must be licensed as a real estate broker, broker associate, or sales associate?

Anyone procuring purchasers of business opportunities

What might be the best way to conduct an ethical real estate practice?

Apply the Golden Rule

Larry listed his home for sale with an agent. The property was exposed to an open and free market and after a reasonable time the property sold to a buyer unrelated to Larry. This type of sale would be considered

Arm's length transaction

How many acres are in a lot that measures 250 x 325?

1.86 250 *325=81,250 sq ft 81,250/43,560 (sq ft in an acre) = 1.86

What portion of a section is ten acres?

1/64

Which type of property would not be classified as residential?

10 residential units in one building

Florida sales associate educational requirements include

14 hours of continuing education every 2 years

An apartment building that sold for $450,000 had monthly gross rent receipts of $3,000. What is its monthly gross rent multiplier?

150.0

A homeowner paid $200,000 for a house three years ago. The house sells today for $239,000. How much has the property appreciated?

19.5 %.

If Charlie submits an application for licensure, completes the educational requirements, but does not pass the licensing exam, when will Charlie's application expire?

2 years after it was received

To qualify for recovery funds, the complainant must file a claim within

2 years of discovering damaging act

A broker is required to immediately deposit any trust funds received. Under Florida real estate law, how is "immediately" defined?

3 business days

If an applicant omitted information on the license application, within what time frame must the applicant be notified to correct the error?

30 days

Violators of Florida antitrust laws can be sued for recovery of

3x amount of damage

What is the statute of limitation for filing any action in a claim for an antitrust law violation?

4 years

How many sq feet does one acre contain?

43,560 sq ft

What is the maximum imprisonment time allowed for a misdemeanor of the second degree?

60 days

A borrower of a $50,000 interest-only loan makes annual interest payments of $3750. What interest rate is the borrower paying?

7.5%.

Florida broker pre-license requirements include

72 hours of pre-licensing coursework.

Callie made an ofer on a home and is under contract for $250,000. She obtained a loan of $225,000 and the home appraised at $225,000. What is the loan to value ratio?

90% $225,000/$250,000 = 0.9

Which of the following is true of a contract for deed transaction?

At the end of the contract period, the vendor conveys legal title, provided the vendee has fulfilled all obligations.

To meet the continuing education requirements for either a sales associate or a broker, what can a licensee substitute for 3 classroom hours of coursework?

A Attendance at a legal agenda session of the Commission B An approved course on real estate issues relevant to the modern practice of real estate by a licensee C An approved course on technology used in the real estate industry D Any of the above

Which of the following would be considered a property improvement?

A chicken coop permanently attached to land.

Property Seller Sue believes she has a valid case against Broker Bob because Sue suffered monetary damages due to Bob's action as her real estate agent. Before Sue can seek recovery payment from the Florida Real Estate Recovery Fund, who must determine whether or not she suffered the damages?

A civil court

Which of the following contracts can be assigned to another party?

A contract for the sale of undeveloped land.

What is a tax deed?

A conveyance instrument for a property that is sold to enforce a tax lien.

Which of the following is true of a cooperative?

A cooperative may hold an owner liable for the unpaid operating expenses of other tenants.

A buyer will receive a water bill for an estimated $100 at the end of the month. At closing, the seller has used an estimated $43 in water. What should appear on the closing statement?

A debit to the seller and credit to the buyer for $43.

A seller received a rental payment of $900 in advance. At closing, the seller has earned only $320 of this rent. What should appear on the closing statement?

A debit to the seller and credit to the buyer for $580.

A property owner who is selling her land wants to control how it is used in the future. She might accomplish her aim by means of

A deed restriction

If the duration of an owner's rights in an estate is not determinable, the owner has

A freehold estate

Which of the following situations illustrates the principle of contribution?

A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.

Which of the following situations is most likely to represent an illegal nonconforming use?

A homeowner in a residential zone converts her residence to a private school.

Which of the following is true of a homestead?

A homestead interest cannot be conveyed by one spouse.

The Uniform Residential Landlord and Tenant Act generally does not apply to

A hotel

Which of the following is covered by the provisions of the Florida Residential Landlord and Tenant Act?

A leased condominium

When a tenant acquires a leasehold estate through a lease, what does the property owner acquire?

A leased fee estate.

Homestead estates are examples of

A legal life estate

A property owner gives Deanna permission to cross his property as a shortcut to her kindergarten school bus. One day the property owner dies. What right was Deanna granted originally, and will it survive the owner's death?

A license, which terminates upon the owner's death.

Which of the following is the most accurate definition of real estate broker?

A person who buys or sells real estate on behalf of others for compensation

Which of the following accurately describes the act of foreclosure?

A proceeding to enforce a lien by forcing the sale or transfer of a secured property.

Which of the following liens would take priority?

A property tax lien

The right to control land usage by zoning and eminent domain is an example of

A public interest

Which of the following contracts would be covered by Florida's Statute of Frauds?

A purchase contract on a property for $109,000

How much time does a seller have to accept a buyer's offer?

A reasonable time, or until the expiration date on the offer.

Which of the following is an executory contract?

A sale contract before closing.

Florida law prohibits a real estate agent from making deceptive representations related to the practice of real estate. Which of the following would be considered a deceptive representation of the practice?

A sales associate claiming her license allows her to open her own real estate firm.

What is a lien-theory state?

A state in which a mortgagee has equitable title to a secured property.

Which of the following entities can legally levy annual real property taxes?

A tax district.

Which of the following describes an encumbrance?

A third party's interest in a real property that limits the interests of the freehold property owner.

Which of the following best describes the documentary stamp tax?

A transfer tax based on the price of the property being conveyed.

What is the difference between a variance and a nonconforming use?

A variance is granted by the zoning board if the owner has a justifiable reason

Mark is not able to make his entire mortgage payment on time each month and has fallen behind on payments. Because of his failure to pay, his lender, ABC home loans, sent him notice that they are calling for the remaining mortgage balance to be paid in full in one lump sum immediately. This is an example of a(n)?

Acceleration clause This allows the lender to call for the note to be paid in full in one lump sum immediately when a borrower falls behind in payments.

Which of the following statements properly describes the central methodology of the cost approach to appraisal?

Add the estimated land value and cost of improvements and subtract the accrued depreciation of the improvements.

An agent is committing an act of discriminatory advertising by doing which of the following?

Advertising a property as available to individuals of a particular race.

The Federal Reserve's Regulation Z applies to which loans?

All loans secured by a residence.

Which of the following is an example of blockbusting?

An agent persuades a family to put their house on the market because ethnic minority families are beginning to move into the neighborhood.

Mr. King wants to offer 100 acres of his property for sale. Since the property is landlocked, he will have to put in a driveway to the road that will run across his remaining property. What kind of easement will he have to grant?

An easement appurtenant.

In a lien-theory state, what kind of interest does a mortgage lender have in the liened property?

An equitable interest.

An estate from period-to-period will continue as long as the tenant makes, and landlord accepts, regular rent payments.

An estate at will

A real property interest that includes the right to possess is considered

An estate in land

Which of the following must be disclosed regarding radon gas?

An explanation of what radon gas is

Which of the following real estate services can legally be offered by someone not licensed as a real estate broker, broker associate, or sales associate?

An individual renting properly licensed public lodging

Which of the following best describes a "fixture?"

An item of personal property that has been converted to real property.

Which of the following is an essential element of a valid contract for the sale of real estate?

An offer and acceptance.

Ned grants his sister Alice an estate for as long as she lives. Her descendants, however, cannot inherit the estate. What kind of estate is it?

An ordinary life estate

Which of the following circumstances is the most likely scenario for a ground lease?

An owner-developer wants to retain ownership of the land portion of the improved real property.

Andy's Arcade has been in business in the same location for 15 years. The city recently rezoned the area, no longer allowing commercial usage. Soon after the rezoning, Andy's suffered a devastating fire and the arcade was a total loss. What will Andy need to obtain from the city in order to rebuild the arcade in the same location?

Andy will need to obtain a variance

A notice of noncompliance may be issued for a minor violation. Which of the following falls within the statutory guidelines of a "minor violation"?

Broker Hale failed to maintain a sign at his brokerage office

Where may trust funds not be deposited?

Broker's business account

Which of the following are methods used by the Federal Reserve System to regulate the money supply?

Buying securities, changing the discount rate, and controlling banking reserves.

Broker Chad received an under-the-table payment from Tom's Home Inspection Services for recommending Tom to a home buyer.

Chad must tell everyone involved in the same transaction about the payment.

Which statute established general provisions for the Department of Business and Professional Regulation?

Chapter 455

Which Florida statute establishes real estate licensees' legal rights and responsibilities?

Chapter 475

Which Florida statute or code covers the Commission's administrative rules that include detailed principles for real estate practice?

Chapter 61J2

Charlene, who is located in Michigan, is looking to purchase a home in Florida based solely on her broker's recommendations because she will not see the home prior to purchase. Her broker has told her that he found a beautiful home on a lake that is just what she is looking for. In actuality, the home is a fixer-upper at best, and the lake is infested with alligators and poisonous snakes. Which of the following statements is FALSE?

Charlene should file a citation against the broker.

The fair housing law that first protected people against discrimination in housing based on race was the

Civil Rights Act of 1866.

Agent Brook is preparing for a listing appointment and has gathered information to prepare a report of recent market data for the seller to review. The report agents reconcile to obtain a reasonable list price for a property based on current listings, recent sales, and expired's would be called

Comparative Market Analysis (CMA)

Jon's Tire Store is being built across the street from Big Bob's Tires. What appraisal principle describes this situation?

Competition The appraisal principle of Competition states that two similar businesses attract more customers when within close proximity than they would separately.

Which of the following is not required when filing a complaint against a licensee for a rule or regulation violation?

Complaint must include witnesses to the action.

Which of the following is also called "legal notice" and is the act of recording documents in the public records?

Constructive notice

Which of the following business entities may not register as a brokerage?

Corporate sole

What is the broker's monthly responsibility regarding all escrow accounts?

Create a written statement of liabilities and balances

Binder deposit shows up as what on closing statement?

Credit to buyer

Agent Anna has a home listed for sale and sows the home to the Quinns whom she does have a buyer's agency agreement with . The Quinns are

Cusomers

Assuming that the broker is a seller's agent, the sales commission would appear most commonly on the closing disclosure as a?

Debit to seller

Escrow agent Emily will use what legal instrument to transfer real property from the seller to the buyer on closing day?

Deed

Which of the following best describes the economic characteristics of land

Demand, utility, scarcity, transferability, situs

If a broker receives a kickback, what must he or she do?

Disclose it to all involved parties

Describing the property would be acceptable in advertising, however, describing the type of buyer desired would be considered

Discriminatory

Which of the following is not an option for the respondent to a filed complaint?

Dispute the allegations and be provided an informal hearing

Which of the following statements properly describes how to apply the income capitalization approach to appraisal?

Divide the income a property generates by a rate of return.

Marvin owns an easement to use the driveway of his neighbor Bob. Marvin's property is considered the

Dominant Estate The property that benefits from an easement to another parcel is called the Dominant Estate

On two adjacent properties, there is an easement that allows property A to use the driveway that belongs to property B. Here, property A is said to be which of the following in relation to property B?

Dominant tenement.

Which type of agency is illegal in Florida?

Dual

Which mortgage clause allows the mortgagee the right to demand the outstanding loan balance plus accrued interest in the event that the borrower sells or transfers any interest in the property without the lenders prior written consent?

Due-on-sale clause

In a real estate transaction, when someone is forced into a contract by intimidation or some other type of coercion it is called

Duress

Broker Ben has E&O Insurance and is selling an investment property that he owns. He has made a few false statements and misrepresentations, but her really needs to sell the property fast. What would happen is someone were to sue him for his false statement?

E&O Insurance will not cover negligence of a Broker selling property he owns.

Sharon made an offer on her dream home and to show the seller she was a serious buyer she offered a sum of money to be held in escrow that she will forfeit if she does not fulfill her end of the deal. What is the sum of money to be held in escrow as a good faith deposit called?

Earnest Money

When an easement allows the use of a neighboring property which automatically transfers upon the sale of either dominant or servient property, it is called what type of easement?

Easement Appurtenant Appurtenant means "runs with the land". An easement Appurtenant is an easement allowing the use of a neighboring property which automatically transfers upon the sale of either dominant or servient property.

Discrimination based on age is expressly prohibited in which of the following?

Employment

A fence that extends onto the land of another from a neighboring property is called an

Encroachment

Donnie's neighbor Paul has an easement to cross Donnie's property to get to his own. The easement is recorded and transfers with the land if either Donnie or Paul sell their property. When an easement is on a title it is an example of an

Encumbrance Encumbrance is a limitation placed on a title such as a lien, lease, or easement. Such encumbrance is important to identify as it may affect the value and or utility of the property

What kind of interest does the buyer acquire once a real estate sale contract is signed by the principal parties?

Equitable title.

Eric rents an apartment at only 17 years old. The lease agreement contract is voidable because Eric is not of legal age to en4ter a contract but who has the ability to void the agreement?

Eric

Mr. Thompson passed away. He had no heirs and left no will or instructions as to whom he wanted to leave his property to. In this situation, his property will revert back to the state under the doctrine of

Escheat

Which of the following types of leasehold estate lacks a specific term?

Estate at will.

Jon signs a six month lease on an apartment beginning Jan 1st and ending June 30th. His lease does not automatically renew and no notice is required on his part to vacate the expiration date. What type of lease did John sign?

Estate for years An estate for years is a lease for a fixed period of time, rather than month-to-month, that does not automatically renew and requires no notice to terminate at the end of the term.

A tenant without a lease has been sending the landlord monthly rent checks, and the landlord continues to accept the payments. What kind of leasehold estate exists?

Estate from period to period.

If an agent is accused of puffing, what does that mean?

Exaggeration

Once all terms of a contract have benn fulfilled and the transaction has closed the contract status is said to be fully

Executed

After the offer and acceptance, when the terms of a contract are in the process of being completed, and prior to closing, the contract is said to be

Executory

A listing agreement in writing creates which form of agency

Express Agency The agency relationship is expressed in writing

Sinkholes are common in Florida where there are limestone deposits. Which Florida agency would be most helpful to contact if a sinkhole develops on your property?

FL Department of Environmental Protection

Which of the following is not a basis for the granting of additional homestead ?

Familial status

The major organizations operating in the secondary mortgage market are

Fannie Mae, Freddie Mac, and Ginnie Mae.

What is the highest form of land ownership which includes the full and complete bundle of property rights

Fee Simple Absolute It is the highest level of property ownership giving the owner(s) the right of possession, control, exclusion, enjoyment, & disposition.

A landowner conveys a parcel of property with the provision that the land cannot be developed for retail purposes. The new owner immediately begins to develop a retail shopping outlet, the grantor finds out and takes the property back. What kind of estate did this landowner convey?

Fee simple defeasible

The Fair Housing Act pertains to certain groups as protected classes. Which of the following is not a protected class under Fair Housing? Felons Elderly Handicapped Single Mothers

Felons

Being compensated for practicing real estate without a license is a

Felony of the 3rd degree

What duty does an agent acting as a property manager owe a property owner?

Fiduciary Duties

Two people own a house, each having an undivided equal interest. Which of the following best describes what each party owns?

Fifty percent of the estate consisting of the indivisible whole of the real property.

Cecily Longstreet believes a real estate agent has kept her from seeing a certain property for rent because she is a woman. What actions should she take if she wants legal satisfaction for her complaint?

File a complaint with HUD and/or file suit against the offending parties in a state or federal court within the prescribed time period.

On Wednesday, Fred offers to sell his property to Jack for $275,000, with the offer to remain open until 5 p.m. the next day. On Thursday morning, Sally offers Fred $280,000 for the property and Fred accepts. At 1 p.m. on Thursday afternoon, Jack accepts. Which of the following is true of this situation?

Fred has entered into contracts with both Jack and Sally to sell the same property.

What is the status of a contract when all the terms have been fulfilled and the transaction has been closed?

Fully executed

The only clause that is actually required in a deed is the

Granting clause

If Broker Bob knowingly files a second and then third false complaint against Broker Tom, what can happen to Bob?

He may be barred from practicing real estate permanently.

Paul owns an older residential property in an area now zoned for commercial use. Paul decides to renovate the home into a laundry mat. The change in the properties functionality for Paul's financial gain is an example of what?

Highest and Best use

If Broker Bob knowingly files a false complaint against Broker Tom, what can happen to Bob?

His license may be suspended.

Under what conditions may a sales associate collect a commission for a real estate transaction?

If the sales associate has permission from his or her employer to collect the commission and collects it in the employer's name

Under what conditions can two individuals own a property as tenants by the entireties?

If they are married.

Of the following potential influences on a local real estate market, which one would be considered local, rather than regional, national, or global?

In- and out-migrations of major employers

Which of the following would be considered community property?

Income derived from community property

Public land use planning strives to balance which of the following potentially conflicting interests?

Individual property rights and the public's interest.

George Scott hires Shannon Lang to sell his house, with the condition that he will not be the first one in the neighborhood to sell to members of a certain ethnic group. What should Shannon do about this condition?

Inform Scott that the condition is illegal and that she cannot comply with it.

What is the best definition for "real estate"?

Interest in land, business enterprises, or business opportunities with some exceptions

Which of the following is NOT one of the four land use controls? Police Power Intestate Escheat Eminent Domain

Intestate The four public land use controls in real estate are Police Power, Escheat, Eminent Domain, and Taxation

In compliance with fair housing regulations any deed restriction or covenant that would prohibit the conveyance of the property to a member of a protected class is

Is not legal, considered void, and unenforceable

Revocation of a license

Is permanent

A seller contracts to sell a property that she does not own. The sale contract for this transaction

Is void

What is the purpose of an equalization factor in ad valorem taxation?

It adjusts assessments in a locality to make them more consistent with an average level for the state or other higher level jurisdiction.

If a broker's license has become void during a period of economic hardship, when can his license be reinstated?

It can be reinstated within 6 months.

If a sales associate terminates his employment with one broker and becomes employed with another broker, what happens to the associate's license?

It ceases to be in force.

Which of the following is true of an eminent domain proceeding?

It conveys legal title to the acquiring entity.

How does the secondary mortgage market aid borrowers seeking a mortgage loan?

It cycles funds back to primary lenders so they can make more loans.

What is the function of recording a deed?

It gives constructive notice of ownership.

What is the role of the Veteran's Administration in the mortgage lending market?

It guarantees loans made by approved lenders.

Broker John changed his business address and did not notify the Commission during the required time period. What is the status of John's license?

It has ceased to be in force.

What is the role of the Federal Housing Authority in the mortgage lending market?

It insures loans made by approved lenders.

What distinguishes a lien from other types of encumbrance?

It involves a monetary claim against the value of a property.

Sam Gough wants to rent out his home, but wants to exclude families with children because of his belief that they cause damage. Under what conditions would federal fair housing laws allow Gough to rent on these terms?

It is a single-family house, and the owner owns only one other rental home in addition to his own residence.

Which of the following is true regarding the assignability of an option?

It is always assignable unless the contract prohibits assignment.

What is the function of a note in a mortgage or trust deed financing arrangement?

It is evidence of the borrower's debt to the lender.

Which of the following defines constructive notice?

It is knowledge one could have or should have obtained.

Which of the following defines actual notice?

It is knowledge received or imparted through direct experience.

Harold filed his application for sales associate licensure 31 days ago. To date he has not heard if his application has been approved or not. What is the status of Harold's application?

It is still pending approval until 90 days have passed.

When a tenant in common dies, what happens to the tenant's interest in the estate?

It passes by probate to the deceased tenant's heirs.

When a joint tenant dies, what happens to the tenant's interest in the estate?

It passes to the surviving joint tenants.

What is the role of Fannie Mae in the secondary mortgage market?

It purchases FHA-backed and VA-backed loans.

How does Planned Unit Development zoning vary from ordinary zoning?

It requires that multiple tracts of land be developed according to a single design.

If an owner of real property dies intestate and has no legal heirs, what will happen to the property?

It will escheat to the state or county.

Why is real estate traditionally considered a relatively illiquid economic product?

Its physical form is fixed.

There are various ways to take ownership of real property. Which type of ownership includes the right of survivorship?

Joint Tenancy. Right of Survivorship is a feature of Joint Tenancy. Upon the death of a joint tenant, their interest in the property passes on to the remaining joint tenant(s)

Sales associate Ken wants to sell Susan's property and earn a commission for doing so. How may Ken legally sell the property and earn the commission?

Ken would need to act under his registered employer and collect the commission in his employer's name.

Listing Broker Doug took a buyer to see Drew's home. They buyer says he wants to think it over and 2 weeks later the listing agreement with Doug expires. Upon expiration of the listing agreement, Drew lists the property with Listing Agent LaDawn from another brokerage. A few days after that the buyer that Doug introduced to the home, knocks on Drew's door and wants to make an offer to purchase the home. When the home sells to this buyer, who get the commission instance/

LaDawn, Doug is no longer entitled to a commission because the protection clause is void once the property is listed with another agent. A protection clause can entitle an agent to commission after the listing agreement has expired during a pre-specified time frame but only if the home is not relisted with another agent which voids the remaining protection clause term

accretion

Land created by lowering water level

How is real estate defined

Land including, water, air, and improvements

New agent Matt is listing a home for sale which was built in 1965. What disclosure should Matt have the seller complete due to the age of the home?

Lead based paint disclosure Properties constructed prior to 1978 fall under the Federal requirement to provide buyers with a Lead Based Paint Disclosure

Which of the following life estates is created by operation of law rather than by the owner?

Legal life estate.

Which of the following is true about leverage?

Leverage is the use of borrowed funds to purchase assets.

Which of the following is not an administrative penalty for law or rules violations?

License cancelation

Which of the following is a duty of a transaction broker but not a duty of a single agent?

Limited confidentiality

LeAnn entered into a contract that called for $1000 in monetary damages if the contract was breached. The $1000 in the contract is referred to as

Liquidated damages When a contract calls for a specified amount of monetary compensation (earnest money) to be paid to one party of the contract upon a breach of contract this is referred to as liquidated damages.

In platted subdivision, the legal description most often used is?

Lot and block

What duty requires an agent to place the clients best interest above all others?

Loyalty

Which of the following statements properly describes the central concept of the sales comparison approach?

Make dollar adjustments to the sale prices of comparable properties to account for competitive differences with the subject.

What is the difference between market value and market price, if any?

Market value is an estimate; market price is the price at which a property sold.

When may a sales associate be registered as a general partner in a brokerage firm?

May not under Florida statutes regarding registration of general partners

A certain legal description contains the phrase, "...northwesterly along Erie Road to the POB...". What kind of description is this?

Meets and bounds

What is a kickback?

Monies paid to a broker for using a particular service provider during a real estate transaction

Liens on a title may be voluntary or involuntary. Which of the following is an example of a voluntary lien? Mortgage Judgement Child support lien Tax lien

Mortgage

Which of the following expenses associated with a principal residence are deductible for income tax purposes?

Mortgage interest and property taxes

Which of the following information is not required as part of the minimum information to be included in an escrow account statement-reconciliation?

Names of depositors

Littoral rights apply to which of the following?

Navigable lakes, seas, and oceans.

Ben listed his home with agent Carrie; he told her he wanted a minimum of $225,000 and anything over and above that amount she could keep as commission. This type of compensation arrangement is called

Net listing While not actually a listing type, Net Listings occur when a seller sets a min net proceeds amount and the agent may keep any amount over that as commission making it a commission agreement rather than a listing type. Net Listing which are illegal in most states.

Under what circumstance may a property listed for sale with a brokerage be advertised without identifying the broker?

Never.

Chuck is selling a duplex he owns. He has asked Broker Terrance to simply show the property for him. What type of broker relationship do these two men have?

No brokerage relationship

Lisa is a full-time graduate student in an appraising degree program at the University of South Florida. All of Lisa's appraisal activities are being supervised by Ken who is a licensed real estate broker. What type of license must Lisa have to perform the appraisal activities she is involved in?

No license

In what they believed was a smart business decision, Roy's Realty and Wescott brokerages have created a monopoly for real estate services in their small town of Bakersville. Was this indeed a smart business decision? Why or why not?

No, because they have violated antitrust laws

Landry owns a duplex and personally occupies one of the units. He ahs one unit for rent and refuses to rent it to anyone with small children because kids are loud. If he refuses applicants with children has he committed a violation or any discriminatory acts?

No, he is exempt from Fair Housing Regulations b/c he owns a dwelling with 4 or less units and personally occupies one of the units. Fair Housing Act allows a landlord that owns a dwelling w/ 4 or less units and personally occupies one of the units to be exempt as long as the property owner odes not use an agent to lease the property and makes no discriminatory advertisements.

Homeowner Paul is selling his home without a real estate agent. He places an advertisement stating "owner financing 3% down payment" is Paul's advertisement in violation of the Truth in Lending Act?

No, property owners are not regulated by TRIL advertising requirements

Mary and Mark are buying their first home, which was built just 3 years ago. After touring the property which seems to be in good repair, they waive their right to a home inspection not anticipating any issues. After closing, and moving in they find that some of the duct work in the crawl space has fallen and is no longer attached causing all the air to be released under the home. They are upset that the seller did not mention the issue, and when asked the seller states they had no idea that had happened. Is the seller at fault for not disclosing this issue to the buyers?

No, the seller had no knowledge of the issue

Which of the following business entities is generally prohibited from brokering real estate?

Non-profit corporation.

Which of the following is not a requirement for a contract to be valid and enforceable? Competent parties authority notarization valuable consideration

Notarization The required components of a valid contract include competent Parties, Legal Purpose, Voluntary Good Faith, Mutual Consent, and Valuable Consideration

If an escrow account's record shows a negative balance, what must the broker do?

Note the cause and corrective action taken

Ted is a licensed real estate broker in Florida, but he is moving to North Dakota to live. What should Ted do about his Florida broker license?

Notify the Commission of his change of residency and comply with nonresident requirements

What is the status of a sales associate's license if he does not complete the required 45-hour post license course before the first expiration of his license?

Null and void

What duty requires a licensee to follow the principal's orders and requests as long as they are not unethical or illegal

Obedience

Which of the following activities is a licensed sales associate allowed to engage in?

Offer a property for lease on behalf of the employing broker

Tenancy in Severalty is best described as

One property owner 'Severing all other owners'

Which of the following may associate his or her name or title with the term "Realtor®"?

Only members of the National Association of Realtors®.

What is co-brokerage?

Outside brokers assist a listing agent in procuring a buyer.

Which of the following is true of an amortizing loan?

Part of each periodic payment is applied to repayment of the loan balance in advance and part is applied to payment of interest in arrears.

The "four unities" required to create a joint tenancy include which of the following conditions?

Parties must acquire respective interests at the same time.

A title search revealed a lien on a property which creates a cloud on the title. How may the landowner go about resolving this title issue?

Paying the debt and filing a stratification of judgement

How is a lien terminated?

Payment of the debt that is the subject of the lien and recording of the satisfaction.

Zoning, building codes, and environmental restrictions are forms of local land use control known as

Police power

Juan shows a customer a property that is listed by another brokerage firm. He obtains an offer that is $5,000 less than the listing price. How should Juan deal with this offer?

Present the offer to the seller at the earliest possible moment.

The city of Stevensville has declared a moratorium on new construction. If demand is increasing, what will be the likely effect on real estate prices in the area?

Prices rise.

Mortgages that are escrowed break down the monthly payment four ways. Each payment pays a portion toward PITI which stands for

Principal, interest, taxes, insurance

Tania has just received her sales associate license. When must she complete her post-license education requirements?

Prior to the first renewal of her license

Buyer Sam purchased a run down residential home in a neighborhood with many nice well kept properties. Sam intends to renovate the home and resell it for a profit. Considering the nicer homes in the neighborhood help raise his property value, what appraisal principle is Sam leveraging?

Progression Progression is the appraisal principle that a dilapidated property will gain value when the surrounding properties are well kept. Nicer homes surrounding a property that is run down will only raise the subject properties value.

In the practice of real estate, what is the common term used if a licensee brags that a property located near a large park is "in the best part of town"?

Puffing

A person wishes to convey any and all interests in a property to another without assurance of the property's marketability. This party would most likely use which of the following types of deed?

Quitclaim deed

A hispanic man called a landlord regarding a home for rent online. The landlord tells him the property is already rented. His white friend then called the landlord to inquire about the property and he arranged an appointment to show him the home. This is discrimination based on

Race

A real estate tax lien, a federal income tax lien, a judgment lien, and a mortgage lien are recorded against a property. Which lien will be paid first when the property is sold?

Real estate tax lien.

Fair housing regulations apply not only to real estate agents but also lenders. When a lender denies a mortgage application solely based on the racial demographics of the neighborhood the property is located in the lender is guilt of

Redlining

If a broker conducts business at a location other than the principal brokerage office, what is the broker required to do?

Register the second location as a branch office

Donnie leaves his home to his third wife Trish with the clause that after her passing the home goes to his first son Logan. What type of interest does Logan have in the property?

Remainder Man A remainder man is a third party interest in a property that will revert to them at the time a life tenant passes away

What kind of real estate users are most concerned with neighborhood quality, access to services, property amenities, and quality of life in their demand for real estate?

Residential

Disclosure law specifics vary by state, however, in which type of transaction would the seller's property disclosure generally NOT be required?

Residential foreclosure

Linda purchased a fee simple interest for the private use of a residential property for one week every single year. What did Linda purchase?

Resort Timeshare Vacation Timeshare Resorts sell a fee simple form of ownership to a buyer for the private and exclusive use of a unit for one week a year. There is title work, a closing, and the buyer is conveyed a deed.

If there is a dispute involving the amount of the broker's commission, what may the broker do regarding the trust funds in the associated escrow account?

Retain the commission amount in the account until the dispute is resolved

What kind of rights are associated with water flowing through your property?

Riparian rights

Broker Sal sold Owner John's home and is not being paid his commission. What type of lien rights does Sal have for the unpaid commission?

Sal has no lien rights for the unpaid commission.

Mary Carboy buys a house from Jim Schmidt and at the same time obtains an option to purchase the adjoining vacant lot for $10,000 within one year. A few months later, Carboy informs Schmidt that she is ready to exercise her option, but finds that Schmidt has received an offer of $12,000 from another party. Schmidt states that he will accept the offer unless Carboy is willing to match the $12,000 offer. Which of the following is true of this situation?

Schmidt must sell to Carboy for $10,000

Agent Terry convinces an owner to list his property way under market value. Terry sells the property to his brother Mark without disclosing the relationship to the buyer in writing. Mark turns around and sells the property for a profit to split with Terry. This is an example of

Self dealing This is intentional misrepresentation of an agent's relationship and interest in a transaction

Davis is a subagent of listing agent Luke. Who does Davis work for?

Seller

Part of agent Connie's listing packet includes a form for the seller to complete that covers the components of the home for sale and the seller's knowledge of the condition of such items. This form is referred to as

Seller's Disclosure

Surface Rights, Air Rights, and Subsurface Rights are all rights that can be sold by a property owner while still retaining the property itself. These rights are known as

Severable Rights

Steve tells the listing agent Shelly his basement leaks but ONLY when it rains hard for long periods of time so no need to mention it to buyers. He insists it's really no big deal. Which of the following is true? Shelly must be obedient and not mention it. Shelly should trust her client, it's no big deal Shelly cannot withhold known material facts Shelly should only mention it if the buyer asks

Shelly cannot withhold known material facts

When agents get together and have a discussion regarding setting a fixed commission rate so that they are all charging the same rate, this conversation violates what act?

Sherman AntiTrust Act

A property management contract should include all of the following: Signatures of the property owner and licensee Duration of the agreement Signature of the tenant Management fee

Signature of the tenant The property management agreement is an employment contract between the property owner and the agent licensee. A tenant will sign a lease, but not the property management agreement.

In the Rectangular Survey System, what are the dimensions of a township?

Six miles by six miles, or 6 miles square.

Which of the following is a requirement of the general licensing provisions?

Social Security number

To be enforceable real estate contracts must be in writing according to the

Statute of Frauds

Only showing homes in a certain part of town to people of a certain nationality is called?

Steering

When the DRE attorneys and the licensee and his/her attorneys come to an agreement regarding the statement of facts and the imposed penalty associated with a complaint, this is known as

Stipulation

During the appraisal process the appraiser will NEVER adjust the price of the

Subject property During the appraisal process the appraiser always adjusts the value of the comparables accordingly but never the value of the subject property.

A tenant transfers a portion of the leasehold interest to another party. The instrument that accomplishes this transfer is a(n)

Sublease

While working on an appraisal report, appraiser Jake finds that the comparable property is superior to the subject property with more amenities. How will Jake make adjustments to arrive at a value of the subject property?

Subtract value from comparable

Melissa went on a listing appointment and the sellers were asking legal questions. Questions she felt certain she knew the answers to, what should Melissa do?

Suggest they seek legal counsel

If a licensee is suspended prior to any hearing for a complaint of a serious law violation, this action is known as a

Summary Suspension Order

When the market for an item has achieved market equilibrium, which of the following statements is true?

Supply and demand are equal, and price and value are equal.

Which of the following is a duty or power of the Department of Business and Professional Regulation?

Suspend the license of a broker who is not in compliance with a support order

The city of Brownwood plans to build a new water treatment facility but the land that is required to privately owned. Eminent domain allows the city to

Take possession of the land against the owner's wishes, yet the owner must be compensated

What type of ownership would allow two or more owners to have various unequal percentages of ownership?

Tenancy in Common It grants owners to have an equal, undivided interest in a property, but also allows for owners to have varying percentages of unequal ownership as well.

When someone passes away with a valid will in plae it is referred to as

Testate

Florida's real estate disclosure requirements apply in which of the following situations?

The 3-residential-unit property is being rented with an option to buy.

In a community property state, John marries Patricia. Prior to the marriage John owned an SUV. During the marriage, John bought a Buick, John and Patricia bought a second property with money earned from Patricia's job, and each individual received a motorcycle from Patricia's uncle as a gift. What property is community property in this marriage?

The Buick and the second property.

Which of the following is true regarding the Florida Real Estate Commission?

The Commission is responsible for fostering the education of brokers in the principles that should govern their conduct.

Which laws or regulations prevent mortgage lenders from discriminating in extending credit to potential borrowers?

The Equal Credit Opportunity Act

The act that required federally-related appraisals to be conducted by a certified appraiser is known as

The Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

The practice of redlining is specifically prohibited by

The Home Mortgage Disclosure Act.

How does the position of an independent contractor licensee (IC) differ from that of an employee licensee?

The IC is responsible for his or her own taxes; the broker does not withhold.

What is rescission?

The act of declaring that a contract is no longer in effect for a given party.

If an applicant makes an error on the license application, the license may be denied if the error is not corrected. What is the exception to this rule?

The applicant was not notified of the error within the designated time period.

The intensity of land usage generally refers to what?

The area of a commercial or industrial facility in relation to the size of the site.

An owner completes a sales contract on her property with a buyer. Before closing, the seller runs into financial trouble and assigns the contract to her principal creditor. The buyer cries foul, fearing the property will be lost. Which of the following is true?

The assignor has completed a legal action.

When real property is held in a land trust, who controls the property?

The beneficiary

Louis owned a boat and a house before marrying Barbara. While she was single, Barbara owned a new car. The two got married and bought a second home. As a wedding present, Barbara's father bought Louis a motorcycle. Under the law of community property, what property can Louis sell without his wife's consent or signature?

The boat, house, and motorcycle.

Which of the following correctly describes the flow of money and documents in a mortgage loan transaction?

The borrower gives the lender a note and a mortgage in exchange for loan funds.

Regarding escrow accounts, which of the following is true?

The broker has 30 days to correct any account errors

A broker receives an earnest money deposit from a buyer and signs the check over to the listing agent as a partial commission advance. What is wrong with this procedure?

The broker has illegally converted security funds for business use.

A licensed broker in Georgia moved to Florida 6 months ago and now wants to apply for a Florida broker's license under the mutual recognition agreement between Florida and Georgia. What must the broker do to obtain the Florida license under this agreement?

The broker is not eligible for a Florida license under the mutual recognition agreement.

A homeseller signs a listing agreement with a broker then subsequently revokes the listing. Which of the following is true?

The broker may have a claim for marketing expenses expended during the listing term.

If a broker's registered office is located outside Florida, which of the following is correct?

The broker must personally appear at any office of the FREC if requested in relation to an investigation.

Which of the following happens when a leased property is sold?

The buyer acquires title subject to the lease, which remains in effect.

Which of the following describes a purchase money mortgage financing arrangement?

The buyer gives the seller a mortgage and note as part of the purchase price of the property.

A seller immediately accepts a buyer's offer but waits ten days before returning the accepted document to the buyer. Meanwhile, the offer has expired. Which of the following is true?

The buyer has no obligations to the seller whatsoever.

A clause in a sale contract stipulates that the seller must provide evidence that the property is free of active termite infestation. On the day of closing, the buyer learns that inspection service did not provide the required written documentation. The buyer then proceeds to declare that the sale is off. Which of the following is true of this situation?

The buyer may be able to have the contract canceled.

A buyer submits an offer to a seller and then dies in a car accident. Before learning of the buyer's death, the seller accepts the offer. Which of the following is true?

The buyer's death terminated the offer.

A buyer has signed a contract to purchase a property, but is uncertain of the condition of the title. Which of the following parties is legally responsible for knowing the condition of the title?

The buyer.

Which of the following best describes the physical boundaries of land?

The center of the earth and infinite space above the earth.

A buyer makes an offer to purchase a house, and the seller accepts the offer. However, before the salesperson can inform the buyer of the seller's decision, the buyer delivers a written notice that she is opting out and cancelling the agreement. At this point, which of the following is true?

The contract has been legitimately cancelled and is null and void.

If a sales associate has worked on a completed transaction that involved a listing agent, a selling agent, and several subagents for each of these, from whom will the sales associate receive any compensation that is due?

The employing broker.

What is a loan-to-value ratio?

The fraction of the appraised value of the property offered as collateral which the lender is willing to lend.

A certain item is to be prorated between a buyer and seller. If no outside party is concerned, which of the following statements is true?

The item must be prorated and recorded as a debit to one party and a credit to the other party for the same amount.

servient estate

The land that has the easement on it

Discount points are a way lenders are able to charge prepaid interest in order to lower the interest rate over the life of the loan. What is the cost of the discount points based on?

The loan amount Discount points charged on all loan types are figured as a percentage of the loan amount. One discount point is equal to 1% of the loan amount.

Which of the following is the type of method a surveyor would use to describe a property that is in a subdivision?

The lot and block method

What is "absorption?"

The number of available units that become occupied over a period of time.

What does "base employment" refer to in the context of real estate demand?

The number of persons employed in base industries in an area

A tenant has an option-to-purchase agreement with the landlord that expires on June 30. On July 1, the tenant frantically calls the landlord to exercise the option, offering the apology that she was busy with a death in the family. Which of the following is true?

The option is expired, and the tenant has no rightful claim to money paid for the option.

Which of the following is true of a sublease?

The original tenant retains primary responsibility for performance of the original lease contract.

Jake does not use any part of his principal residence as a home office. Which of the following is true of the tax treatment of this property?

The owner may be able to avoid capital gain tax when the property is sold.

If a municipality exerts its power of eminent domain against a certain property owner, what happens?

The owner must sell the property in exchange for market-value compensation.

Which of the following actions is allowed under federal fair housing laws?

The owner of a duplex who resides in one of the units refuses to rent the other unit to a non-Christian.

Which of the following is true of a tenancy in common?

The owners enjoy an indivisible interest.

Big Bear is experiencing a fast influx of new residents. There are few homes on the market and no new construction developments in the works. What will this do to the price of the existing homes in the area?

The prices will increase

The key consideration in granting a zoning exception known as a special exception is which of the following?

The public interest

Three students rent a house together, and all three sign a one-year lease. Six months later, two students move out. Which of the following is true of the remaining rent obligation?

The remaining tenant is responsible for the full rent obligation.

Katelyn rents an apartment for one year. What rights has she acquired under the leasehold?

The right to possess and use the premises.

On closing day who signs the deed to transfer the property from seller to buyer?

The seller

Agent Paula found a buyer for her listing, the seller accepted the buyer's offer, and both parties received copies of the contract documents. The seller decides one week prior to closing they no longer want to sell the home. What could happen?

The seller owes Paula Commission

Which of the following is true of a joint tenancy?

The tenants have an equal and indivisible ownership interest.

What is "vacancy" in real estate market economics?

The total existing space of a certain type that is unoccupied at a given time

When an estate is held in a trust, which party holds legal title?

The trustee

In a deed of trust transaction, which of the following occurs?

The trustor conveys title to a trustee in exchange for loan funds from the beneficiary.

Three leading agencies charge identical commission rates for brokering office properties in Phoenix. Based on this information alone, which of the following is true?

There is insufficient evidence of anything other than a normal business practice.

After five years of owner-occupancy, Simon Wilson sells his principal residence for a gain of $150,000, and the next month buys another principal residence that costs more than the adjusted sale price of the old home. Which of the following is true of the treatment of the tax on gain?

There is no taxable gain.

Which of the following is true of easements in general?

They involve the property that contains the easement and a non-owning party.

A waterfront homeowner has just died. What will become of the water rights the owner enjoyed while living in the home?

They transfer with the property when the property is sold.

In which of the following theories of mortgage lending does the borrower not retain ownership of the property during the loan period?

Title theory

In a brokerage relationship that involves designated sales associates, what is the role of the broker?

To advise and assist the sales associates

Why do communities require building permits?

To ensure that improvements comply with codes.

What is one of the purposes of a lawsuit to "quiet title"?

To have an encumbrance removed if the lienholder cannot prove its validity.

What is the purpose of the property tax disclosure?

To notify the buyer that future taxes may be different than the current taxes

What is the purpose of the Disciplinary Guidelines set forth by the FREC?

To outline penalties allowed for mitigating circumstances

What is the purpose of the Brokerage Relationship Disclosure Act?

To provide customers with a greater understanding of real estate transactions and broker relationships

What is the purpose of residential zoning?

To regulate the density of dwellings in the residential zone.

What is the general purpose for cities to require building permits?

To require a minimum level of construction standards. This maintains the safety and well being of the public.

Why do zoning authorities create different types of zones?

To separate land uses so that they do not interfere with each other.

Kevin is leasing a storefront to open a pizza parlor. Any items he attaches to the property which he will use to conduct his business would be

Trade fixtures Items and equipment used to conduct business, such as pizza ovens, walk-in coolers, and salad bars are considered trade fixtures and property of the tenant

Which laws or regulations require mortgage lenders to disclose financing costs and annual percentage rate to a borrower before funding a loan?

Truth-in-Lending laws and Regulation Z.

If a borrower obtains an interest-only loan of $200,000 at an annual interest rate of 6%, what is the monthly interest payment?

USD 1,000.

A lender is charging 2 points on a $60,000 loan. The borrower must therefore pay the lender an advance amount of

USD 1,200.

A loan applicant has an annual gross income of $72,000. How much will a lender allow the applicant to pay for monthly housing expense to qualify for a loan if the lender uses an income ratio of 28%?

USD 1,680.

Melissa is buying Raymond's house. Melissa's loan amount is $88,750. She has agreed to pay 2 points at closing. How much will Melissa pay for points?

USD 1,775.00. $88,750 x .02 = $1,775. Remember, one point = 1% of the loan amount.

If a borrower's monthly interest payment on an interest-only loan at an annual interest rate of 6% is $500, how much was the loan amount?

USD 100,000.

A property is being appraised by the cost approach. The appraiser estimates that the land is worth $30,000 and the replacement cost of the improvements is $95,000. Total depreciation from all causes is $10,000. What is the indicated value of the property?

USD 115,000.

Christie is buying John's house. The closing date (day belongs to seller) of the sale transaction is September 1 (day 244 of the year). Existing hazard insurance of $350 has been paid by John through December 31. Use the 365-day method for prorating. What is Christie's share of the existing hazard insurance already paid in full?

USD 116.03. The buyer's share is the unused portion, or (365 days - 244 days), or 121 days. The daily expense is ($350 ÷ 365), or $.9589. ($.9589 x 121) = $116.03. The seller receives this amount as a credit and the buyer a debit.

A homeowner bought a house five years ago for $150,000. Since then, the homeowner has spent $3,000 to pave the driveway and has added a central heating/airconditioning system at a cost of $4,000. What is the homeowner's adjusted basis if the house is sold today?

USD 157,000.

A sale transaction closes on July 4. The day of closing belongs to the seller. On January 1, the seller paid a hazard insurance premium of $375 for the calendar year. According to the 12-month/30-day method, what is the seller's share of the insurance premium?

USD 191.67. This method assumes all months are 30 days and the year is 360 days. The daily proration is therefore $375 ÷ 360, or $1.04. The closing occurs on the 184th day of the year. Thus, ($1.04 x 184) = $191.67. Note that if the day of closing is the buyer's, there would be 183 day's worth of prorated expense.

A house is being appraised using the sales comparison approach. The house has three bedrooms, two bathrooms, and a patio. The appraiser selects a comparable house that has three bedrooms, 3 bathrooms, and no patio. The comparable house just sold for $200,000. A bath is valued at $7,000, and a patio at $2,000. Assuming all else is equal, what is the adjusted value of the comparable?

USD 195,000. Since the comparable has an extra bath, it is adjusted downward to equalize with the subject. Conversely, since it has no patio, the appraiser adds value to the comparable. Thus, $200,000 minus $7,000 plus $2,000 equals $195,000.

A school district's tax rate is 10 mills. The school district's required revenue from real estate taxes is $20,000,000. What is the tax base of the area?

USD 2,000,000,000.

Maria borrows $100,000 and pays two points for the loan. How much does she pay in points?

USD 2,000.

Elmo Gilmore owns a small retail property that he inherited from his father. There are no mortgages or interest expenses connected with the property. Elmo takes an annual cost recovery expense of $5,000. The property has a monthly gross income of $1,500 and monthly operating expenses of $500. Elmo's taxable income from this property will be taxed at a rate of 30%. What is the tax liability for the year?

USD 2,100. Annual gross operating income ($1,500 x 12 = $18,000) - annual operating expenses ($500 x 12 = $6,000) = annual net operating income ( $12,000); annual net operating income ($12,000) - cost recovery expense ($5,000) = taxable income ($7,000); taxable income ($7,000) x tax rate (30%) = tax liability ($2,100).

Lynne just bought a house. She paid $187,500, for it, even though it had been listed at $195,000. An adjoining property owner, Ken, had tried to buy the property for $185,000, but had been refused. He now offers Lynne $190,000 for the house. Lynne is interested, so she hires an appraiser. The appraiser returns an estimate of value of $200,000. Which of these numbers can be called the market value?

USD 200,000. Market value is an opinion of the price that a willing seller and willing buyer would probably agree on for a property at a given time if: the transaction is for cash; the property is exposed on the open market for a reasonable period; buyer and seller have full information about market conditions ; there is no abnormal pressure on either party; it is an "arm's length" transaction; title is marketable; and the price does not include hidden influences such as special financing deals. The amount Lynne actually paid is the market price. The previous listing price and Ken's offer might be interesting data for the appraiser, but the appraisal must also consider other market data, such as comparable sales.

A rental house has monthly gross income of $1,200. A suitable gross income multiplier derived from market data is 14.1. What estimated sale price (to the nearest $1,000) is indicated?

USD 203,000.

A house sold for $250,000. The seller paid a brokerage commission of six percent, legal fees of $600, and had other closing costs of $1,500. What are net proceeds from the sale?

USD 232,900. The figure for net proceeds from sale is expressed by the formula: sale price - costs of sale = net proceeds. Thus $250,000 - (6% x 250,000) - 600 - 1,500 = $232,900.

A homeowner sold her house and realized a net proceeds amount of $210,000. Her adjusted basis in the home was $176,000. She immediately bought another house for $200,000. What was her capital gain?

USD 34,000.

A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $60,000, vacancy and credit losses of $3,000, and operating expenses of $20,000. Using a capitalization rate of ten percent, what is the indicated value (to the nearest $1,000)?

USD 370,000.

A real estate sales associate finds a buyer to a For Sale By Owner property. The home sells for $245,000, and the seller agrees to pay a commission of 3%. The sales associate is on a 65% commission schedule with her broker, who pays her 65% minus office expenses of $500. How much will the sales associate receive from this transaction?

USD 4,278.

A property has sold for $380,000. The listing agreement calls for a commission of 6.5%. The listing broker and selling broker agree to share the commission equally. What will the listing agent receive if the agent is scheduled to get a 40% share?

USD 4,940.

A homeowner receives a tax bill that includes an amount for the library district, taxed at $1.00 per $1,000, and the fire protection district, taxed at $2.00 per $1,000. How much does the taxpayer have to pay for these two items if the property's taxable value is $147,000?

USD 441. The library tax is ($1.00 x 147) and the fire district tax is ($2.00 x 147). Thus the tax is $441.

A town is replacing a sidewalk that serves five homes. The length of the sidewalk is 200 feet. Mary's property has 38 feet of front footage. If the cost of the project to be paid by a special assessment is $30,000, what will Mary's assessment be?

USD 5,700.

Julie is buying Florence's house. The closing date (day belongs to seller) of the sale transaction is September 1 (day 244 of the year). The buyer's loan amount is $78,750 (90%; 30 years @ 8%). The monthly payment on this loan is $577.84, with $525 going to interest in the first month. At closing, Julie must pre-pay interest for the period of Sept. 2-Sept. 30. Use the 365-day method for prorating. What is Julie's prepaid interest amount?

USD 525.00. If the buyer pays $525 interest for 30 days, the daily expense is ($525 ÷ 30), or $17.50. If there are 29 days of pre-paid expense, the buyer's charge is ($17.50 x 29), or $507.50.

A sale transaction closes on April 1, the ninety-first day of the tax year. The day of closing belongs to the seller. Real estate taxes for the year, not yet billed, are expected to be $2,190. According to the 365-day method, what is the seller's share of the tax bill?

USD 546.00. The daily tax expense, first, is ($2,190 ÷ 365) or $6.00. Since the buyer will pay the taxes after closing, the seller will owe the buyer his or her portion of the tax bill, which is the 91 days from the beginning of the year through closing. Therefore, credit the buyer and debit the seller ($6.00 x 91), or $546.00.

Waldo is buying Marianne's house. The closing date (day belongs to seller) of the sale transaction is September 1 (day 244 of the year). Current Year real estate taxes are $1,100 (will be billed to buyer next year). Use the 365-day method for prorating. What is Marianne's share of the real estate taxes?

USD 735.34. Assuming a 365 day year, the daily tax expense is ($1,100 ÷ 365), or $3.013. As taxes are paid in arrears, the buyer will be paying the annual bill. Thus, he will be owed a credit for the seller's share of the bill, which is $3.013 x 244 days, or $735.34.

Betzy is working with buyers under a written buyer's agency agreement. The buyers decide they want to purchase a home that Betzy has listed.If Betzy does not obtain permission in writing from all parties to represent both parties she would create

Undisclosed dual agency

Two parties enter into a contract. The agreement fulfills all the requirements for a valid contract, with no disqualifying circumstances. Given this situation, it is still possible that the contract may be

Unenforceable

An option contract is a?

Unilateral contract

Shane is offering an open listing on his home to all local brokers. Shane has offered to pay a 3% commission to the broker that brings him a ready, willing and able buyer. What type of contract did Shane offer?

Unilateral contract

4 Unities

Unity of Possession (joint ownership and control); Unity of Interest (the interests in the account must be identical); Unity of Title (the interests must have originated in the same instrument); Unity of Time (the interests must have commenced simultaneously)

A buyer signs an earnest money agreement and gives it to the broker who showed her the property she is buying. After leaving the broker's office, she reconsiders and decides she prefers a different property. How long does she have to take back her offer?

Until the seller communicates acceptance of the offer.

Johnny's home is under contract and the prospective buyers had a home inspection. The inspection noted some roof issues which Johnny was not previously aware of. They buyers provided Johnny with a copy of the inspection and an inspection notice terminating the sales contract. What should Johnny do going forward?

Update the seller's disclosure to include the roof issues

A broker-associate may be a business entity officer, director, or partner if he/she

Upgrades to an active broker

In assisting a buyer or seller to complete an offer to purchase, what should an agent do to reduce the risk of committing an unauthorized practice of law?

Use a standard contract promulgated by a state agency or a real estate board.

There is a lot of new construction going on in the town of Florence. Which of the following would most likely be the immediate effect on the real estate market?

Vacancy rises and prices fall.

A construction contractor executes a contract with a buyer. In the agreement, the contractor promises to complete construction by November 20. This promise can be construed as

Valuable consideration

A contract that does not have all the necessary elements of a contract is

Void

What type of title bears the most protection for the property owner?

Warranty deed A warranty deed provides the most protection for a property owner and includes the guarantee of seisin, encumbrances, right to quest enjoyment, further assurance, and warranty forever.

Which of the following would be defined as real estate as opposed to real property?

Wells, driveways, and signs on a parcel of land.

When may escrow account funds be disbursed?

When transaction closes

Sally wants to transfer the title of her property to her granddaughter. Which of the following are ways to voluntarily transfer title to a property: Sales contract, will, seisin Will, grant, deed Title certificate, escheat, deed Escheat, will, grant

Will, grant, deed

Leslie is showing her listing to some prospective buyer customers. Leslie grew up just down the road and knows this property was once used as a dumpsite many years ago. Does Leslie have to make the prospective buyers aware of this information since they are customers and not clients?

Yes, the agent must disclose Agents owe clients and customers alike the disclosure of any possible environmental hazards

A homeowner is very upset over a drone that a neighbor flies over his house. He takes his case to court to end this possible violation of rights. Does he have a case, and on what basis?

Yes. The drones infringe on his air rights.

A borrower obtains a 30-year, fully amortizing mortgage loan of $50,000 at 8%. What is the principal balance at the end of the loan term?

Zero.

Which of the following is true regarding master planning and zoning?

Zoning ordinances are a primary means of keeping land use in harmony with the master plan.

A contract between two parties both giving a promise for a promise is called

a bilateral contract

A break in the chain of title to a property results in

a clouded title.

A contingency in a sale contract is

a condition that, if unmet, renders the contract unenforceable.

A prospective homebuyer submits a signed offer with the condition that the seller pay for the inspection at closing. The seller disagrees, crosses out the provision, then signs and returns the document to the buyer. At this point, assuming all other contract validity items are in order, the original offer is now

a counteroffer.

The primary tax benefit in owning a non-income property such as a residence is

a deduction for mortgage interest.

In accordance with the statute of frauds,

a five-year lease must be in writing to be enforceable.

Six investors purchase a shopping center. One investor manages the tenants and another handles the marketing and leasing. Two investors manage accounting and finance, and the remaining two run the management office. This is a possible example of

a general partnership.

In order for a contract to convey ownership in a property transaction the contract must include

a legal description In order for a contract to convey ownership in a property the contract must include a legal description that describes the property so that its geographic location is identifiable

A property that conformed with zoning ordinances when it was developed but does not conform to new ordinances is said to be

a legal nonconforming use.

Compared to a stock portfolio, a real estate investment would be considered

a more management-intensive investment.

The approval process for development of multiple properties in an area includes submission of

a plat of subdivision

subdivision

a plot of land is divided into two or more parcels

The principle underlying depreciation from physical deterioration is that

a property loses the same increment of value each year over the economic life of the property.

A licensed sales associate may work only for

a single employing broker who has an active broker's license.

A non-profit organization wants to erect an urgent care facility in a residential zone. Given other favorable circumstances, the local authorities may grant permission by allowing

a special exception.

If a property owner has the right to redeem his or her property after a tax sale, the owner has

a statutory right of redemption.

In executing a condominium lease, a tenant has acquired

a temporary possessory interest.

Under the Uniform Residential Landlord and Tenant Act, if a lease does not state a clear expiration date, the lease is regarded as

a tenancy from period-to-period

A court might grant an easement by prescription if

a trespasser has been using an owner's property for a certain period with the owner's knowledge but without permission.

What is accumulation of land caused by the natural flow of water called

accretion

A legal description of a property is one which

accurately identifies the boundaries of the property as distinct from all other properties.

In making dollar adjustments in the sales comparison approach, the appraiser

adds value to a comparable that is inferior to the subject property.

AMC Bank discovers, in considering buyer Bob's application for a mortgage loan, that Bob has borrowed the down payment from an uncle and has to repay that loan. Bob should expect that AMC Bank will

adjust the applicant's debt ratio calculation and lower the loan amount.

Among the items that normally must be disclosed in a sale contract or its addenda is/are the

agency relationships and property condition.

A real estate sale contract is an executory contract until

all the obligations and promises are performed and the transaction is closed.

The difference between a balloon loan and an amortized loan is

an amortized loan is paid off over the loan period.

In addition to income, credit, and employment data, a mortgage lender requires additional documentation, usually including

an appraisal report.

A tenant continues to occupy an apartment after lease expiration without the consent of the landlord. This type of estate is called

an estate at sufferance.

If Okapi, Inc., a company that markets its sports clothing worldwide, moves into Stevensville and hires 100 employees, it is reasonable to expect that the town will experience

an increase in demand for all types of real estate.

An encroachment is

an unauthorized physical intrusion of one property into another.

In Florida, it is presumed that all licensees are operating as transaction brokers unless

another type of relationship is established in writing.

Bill Parsons paid $150,000 for a house to operate as a rental property, figuring that he could rent it out at a rate of $900 a month. In paying a price based on the property's ability to generate a desired future income, Parsons was motivated by the economic principle known as

anticipation.

A due-on-sale clause in a sale contract puts parties on notice that

any conveyance may trigger an acceleration of any loans secured by the property.

A joint venture may generally broker real estate if the co-venturers

are properly licensed.

Under the Equal Credit Opportunity Act, a lender, or a real estate agent who assists a seller in qualifying a potential buyer, may not

ask the buyer/borrower about his/her religion or national origin.

When a property owner combines two adjacent properties to create a single property with a higher value than the sum of the values of the two separate properties, the applicable principle of value is called

assemblage.

An item is said to be paid in arrears if it is normally paid

at some time after the expense is incurred.

In obtaining offers from a buyer, an agent must be careful to

avoid disclosing what price the owner will accept.

A trade name must not

be used by a sales associate.

To be enforceable, a contract for the conveyance of real estate must

be written.

easement in gross

benefits a person or entity and not a parcel of land.

easement appurtenant

benefits one parcel of land to the detriment of another parcel of land.

A bilateral contract is one in which

both parties promise to do something in exchange for the other party's performance.

The difference between what a borrower has to pay to purchase a property and the amount a lender will lend on the property is the

buyer's down payment.

Unlike tenants in common, joint tenants

cannot will their interest to a party outside the tenancy.

A document certifying that a structure complies with building codes and is ready for use is referred to as a(n)

certificate of occupancy.

Under Florida Deceptive and Unfair Trade Practices, the penalty for willful unfair or fraudulent advertising is

civil penalty of not more than $10,000.

A broker associate's commission rate and structure is established by

competitive conditions.

A sales associate makes a listing presentation to a homeseller and obtains a signed listing agreement. The first thing the sales associate must now do is

complete the signing of the listing.

When a tenant rents an apartment, he or she is usually responsible for

compliance with the rules and regulations of the building.

The Equal Credit Opportunity Act (ECOA) requires lenders to

consider the income of a spouse in evaluating a family's creditworthiness.

A real estate sales contract, to be enforceable, must

contain a legal description of the property.

The debt ratio formula used to qualify borrowers is

debt payments divided by gross income.

A drifter secretly lives in an abandoned shack on a large ranch property. After twenty years, the person makes a claim of ownership to the shack and the land immediately surrounding it that he had cleared. This claim will likely be

declined because possession was secretive.

In deriving taxable income on an investment property, it is generally legal to

deduct interest payments from income.

The first step in the appraisal process, regardless of the appraisal method, is to

define the appraisal problem and the purpose of the appraisal

If the price of an item is increasing, one can usually assume that

demand for the item is increasing in relation to supply of the item.

In appraisal, loss of value in a property from any cause is referred to as

depreciation.

A customer must sign a disclosure showing his or her assets are $1 million or more when in a brokerage relationship with a

designated sales associate.

The price for any product is a function of four fundamental determinants of value. These are

desire, utility, scarcity, and purchasing power.

Ralph Roberts buys a small office building as an investment and participates actively in the management and operation of the building. This is an example of

direct investment.

To avoid violating the Real Estate Settlement Procedures Act, parties who are providing services to the buyer or seller in a transaction must

disclose in writing any business relationships they have with other parties involved in the transaction.

Following the client's recommendation, an agent conceals the availability of a property from an employed but pregnant and unmarried minority woman. This agent could be liable for

discriminatory misrepresentation by omission.

A broker who represents as a fiduciary both the buyer and seller in a real estate transaction is a

dual agent.

If property Alpha has a court-ordered easement across property Beta in order for Alpha to have access to a public road, the easement is a(n)

easement by necessity

A tenancy at will can usually be terminated by

either party giving proper notice.

The "bundle of rights" refers to a set of rights

enjoyed by the owner of a property

The Brokerage Relationship Disclosure Act

establishes brokerage representation disclosure requirements.

In the cost approach, after estimating the value of the land and the cost of the improvements, the appraiser

estimates depreciation, subtracts depreciation from cost, and adds back the land value.

Competing brokers in a county seat agree on a standard commission rate for principals within the county. This is a possible violation of

fair trade and anti-trust laws.

A property is secured by a mortgage that does not contain a "power of sale" clause. To foreclose, the lien holder will have to

file a foreclosure suit.

The FREC may suspend a license

for a period no longer than 10 years.

A landlord generally has the right to enter the leased premises

for specified reasonable purposes.

Involuntary alienation is the transfer of real estate by law and without the owner's consent. There are 4 methods by which this is accomplished:

foreclosure, eminent domain, adverse possession, and by escheat.

To be marketable, title must be

free of undisclosed defects and encumbrances.

An office building lacks fiber optic cabling to accommodate the latest communications equipment. This is an example of

functional obsolescence.

The type of deed that offers the grantee the fullest protection against claims to the title is the

general warranty deed.

An agency relationship is formed when a customer

gives a broker authority to act on his/her behalf.

Ownership of real estate can be transferred voluntarily or involuntarily. The three ways title can be transferred voluntarily are by

grant, deed, and will.

The formula for determining taxable income produced by an income property is

gross income minus expenses minus building depreciation.

A tenant obtains a full-service lease where the landlord agrees to pay all operating expenses in exchange for an additional $5.00 rent per square foot. Another term for this lease is a(n)

gross lease.

A construction boom in a market is an indication that prices

have been increasing.

A sales associate may collect a commission directly from the seller only when

his/her employer consents.

If an applicant for licensure has not successfully passed the licensure examination,

his/her license can be denied.

The purpose of a deed restriction is to enable an owner to specify

how a property may be used and what improvements may be built on it.

A VA certificate of eligibility determines

how much of a loan the VA will guarantee.

A homeowner borrows money from a lender and gives the lender a mortgage on the property as collateral for the loan. The homeowner retains title to the property. This is an example of

hypothecation.

As a component of real estate value, the principle of substitution states that

if two similar properties are for sale, a buyer will purchase the cheaper of the two.

A broker signs a listing agreement to sell a home for $200,000. An immigrant couple are interested in the house and ask the agent the price. The agent states the price as $210,000. According to the fair housing laws, such an action is

illegal, because the agent changed the terms of the sale to discourage this particular couple.

Two of the financial rewards that investments offer are

income and tax benefits.

Cost recovery is allowed as a federal tax deduction on

income properties.

A home is located in a neighborhood where homeowners on the block have failed to maintain their properties. This is an example of

incurable economic obsolescence.

Lenders use an income ratio in qualifying to

insure a borrower has the earning power to make the loan payments.

A judge rules in favor of the creditor in a court proceeding and places a judgment lien against all the debtor's assets, including his real property. This is an example of a(n)

involuntary general lien.

Highest and best use of a property is that use which

is physically and financially feasible, legal, and the most productive.

The guardian for a mentally incompetent party enters into an oral contract with another party to buy a trade fixture on behalf of the incompetent party. This contract

is possibly valid and enforceable.

One of the strengths of the cost approach is that it

is very accurate for a property with new improvements that represent the highest and best use.

A distinctive feature of a promissory note is that

it is a negotiable instrument.

One distinguishing feature of real estate as an economic product is

its susceptibility to swings in the local economy.

The assumability of an FHA-insured loan is

limited by when the loan was originated.

A moratorium on new construction is an example of

local government influencing the real estate market, regardless of demand.

One weakness of the cost approach for appraising market value is that

market value is not always the same as what the property cost.

An investment property seller pays $14,000 in closing costs. These costs

may be deducted from the sale price for gains tax purposes.

When the terms of the mortgage loan are satisfied, the mortgagee

may be required to execute a release of mortgage document.

A broker has not violated Florida antitrust laws if he/she

meets with another brokerage to compare listed properties.

Commingling is the practice of

mixing escrow funds with the broker's operating funds.

The borrower in a mortgage loan transaction is known as the

mortgagor.

A homeowner's total tax bill is derived by

multiplying each district's tax rate times the taxable value of the property.

The statute of limitations requires that parties to a contract who have been damaged or who question the contract's provisions

must act within a statutory period.

To avoid denial of licensure, an applicant

must not have been disbarred.

When an investor has to pay a lender more to finance the investment than the investment property generates in income, the investor suffers from

negative leverage.

The standard E & O policy covers damages resulting from

negligence, error or omission in carrying out professional services.

Real estate sales agents are legally authorized to

negotiate and execute contracts for sale on behalf of the client.

Vijay enters into a lease for his new store. The provisions of the lease require Vijay to pay the operating expenses of the premises such as janitorial and repair expenses. This is an example of a

net lease.

A conventional mortgage loan is one that is

not FHA-insured or VA-guaranteed.

When an owner leases her property, she temporarily relinquishes the right to

occupy the property.

An adverse possessor must be able to successfully demonstrate that he or she has been

openly possessing and claiming the property without the owner's consent.

Among other provisions, the Superfund Act (CERCLA) and Superfund Amendment and Reauthorization Act of 1986 provided that

parties responsible for improper disposal of hazardous waste could be charged for the cleanup costs.

Jennifer owns a one-half interest in a condominium as a tenant in common with her business partner. If Jennifer has several heirs and dies without a will, the property will

pass to the heirs by the laws of descent and distribution

A broker's post-license education requirement includes

passing end-of-course exam.

The right to encumber a property means that the owner can

pledge the property as collateral for debt.

For a loan that is not backed by the Federal Housing Administration or Veterans Administration, and for which the borrower is making a down payment of less than 20%, the lender is likely to require the borrower to obtain

private mortgage insurance.

Title VIII of the Civil Rights Act of 1968 applies to the sale of

privately owned single-family residences listed with a broker.

The court proceeding that generally settles a decedent's estate is called

probate.

Certain classes of property owner and types of property are exempted or immune from real property taxation in many areas. The protected categories usually include

properties owned by a government agency.

Any broker who provides a rental information list to a prospective tenant for a fee must

provide for the repayment of a percentage of the fee under certain conditions.

Under landlord-tenant laws, landlords must treat tenants fairly and honestly. In a residential leasehold, this requirement would include

providing required building support and services.

An agent does not like a particular minority buyer, and is very short with the person, refusing to engage in lengthy conversation or show him any properties. A second minority party visits the office the next day. The agent is very forthcoming, and shows the person five prospective properties. This agent could be liable for

providing unequal services.

The classes protected against discrimination by the Fair Housing Act of 1968 are

race, color, religion, and national origin.

One feature common to both real estate brokerage and business brokerage is

real property transactions.

To be valid, a local zoning ordinance must

reasonably promote community health, safety and welfare.

The essential elements of the metes and bounds system are

reference points, angles, and distances

To be valid, a valid contract must

reflect a mutual understanding or agreement.

The Equal Credit Opportunity Act prohibits a lender from

refusing a loan because the borrower does not match the lender's target market.

Because a real estate investment can take a long time to sell, real estate investments are considered to be

relatively illiquid.

The cost of constructing a functional equivalent of a subject property is known as

replacement cost.

The purpose of the statute of frauds is to

require certain conveyance-related contracts to be in writing.

Under federal fair housing laws, the owner of a ten-unit apartment building may legally

require families without children to pay the same security deposit that families with children must pay.

The best comparable property for use in the sales comparison approach is the one that

requires the fewest and smallest adjustments

The disclosure requirements for authorized brokerage relationships apply only to

residential property.

The disclosure requirements covered in the Brokerage Relationship Disclosure Act only apply to

residential sales.

The conditions of an escrow agreement cannot be met and the related transaction cannot be completed. In such a case, the escrow agent

returns funds to the buyer.

When vacancies are declining in a real estate market, it is common for the market to experience

rising prices.

The best definition of designated sales associates is

sales associates who are acting as single agents under certain conditions in the same transaction.

In the market data approach, an appraiser

selects comparable properties, adjusts the comparables, and estimates the value.

Carissa and Robert acquire a condominium as tenants in common. In this circumstance, Carissa can

sell her interest to a third party without the consent of Robert.

Tanya buys a 4-bedroom condominium. As the new owner, she has the right to

sell or mortgage the unit without impediment from individual owners of neighboring units.

A tenant in common can

sell or transfer his interest without the consent of the other tenants in common.

The Florida Real Estate Commission consists of

seven members, all appointed by the Governor.

By contrast to a condominium, the owner of a cooperative owns

shares in a corporation or association and a proprietary lease in a physical unit.

An unlicensed associate may not

sign a listing agreement.

A valid contract must contain valuable consideration which means

something clearly offered for something else in exchange A valid contract must contain a two-party exchange of valuable consideration and performance

The valuable consideration necessary to make a contract valid must be

something of value traded in exchange for something of value.

The basic intent of zoning ordinances is to

specify usage for every parcel within the zoning authority's jurisdiction

Wayne and Leota obtain an insurance policy that protects them from liabilities and losses resulting from title defects. The kind of policy they bought is a

standard owner's title insurance policy.

The Wallaces, a minority family, would like to buy a home in a certain price range. Agent Ambrose shows the family all available properties in a neighborhood of families with similar backgrounds. Ambrose does not mention a number of homes in the family's price range in other neighborhoods. This agent could be liable for

steering.

A homeowner defaults on his mortgage loan. In the subsequent foreclosure action, the lender takes title to the liened property directly instead of initiating a court-ordered public sale. This is an example of

strict foreclosure.

A lien holder can change the lien priority of a junior lien by agreeing to

subordinate the lien

One of the strengths of the sales comparison approach is that it

takes into account the competitive value of specific amenities of the subject property.

Six people have identical rights in a property and enjoy an indivisible interest. However any of the owners may sell or transfer his/her interest without consent of the others. This form of ownership is a

tenancy in common.

A fee or life estate is held by an individual. This form of estate is referred to as a(an)

tenancy in severalty.

An estate at will

terminates on the death of lessor or lessee.

The distinguishing feature of a leasehold estate is

that the estate is limited by a lease term.

Which of the following laws or rulings extended discrimination to include gender, handicapped status, and family status?

the Fair Housing Amendments Act of 1988.

Which laws or regulations require mortgage lenders to provide an estimate of closing costs to a borrower and forbid them to pay kickbacks for referrals?

the Real Estate Settlement and Procedures Act.

The three overriding considerations of a lender's mortgage loan decision are

the ability to re-pay, the value of the collateral, and the profitability of the loan.

If a particular loan falls under Regulation Z's right of rescission provision,

the borrower has a limited right to cancel the transaction within a certain period.

In a buydown,

the borrower pays additional interest at the onset in order to obtain a lower interest rate.

A sale contract stipulates that a buyer is to pay the seller's transfer tax expenses. This practice is not customary in the area. In this case,

the buyer must pay the expense.

In a cooperative, real property is owned only by

the corporate entity of the cooperative association.

Melinda purchases a house and finances it. The lender in turn places a lien on Melinda's title. The lien in this mortgage transaction is

the creditor's claim against the property as collateral security for the loan.

The formula for calculating capital gain tax is the taxpayer's tax bracket multiplied by

the difference between amount realized and adjusted basis.

What a buyer has to pay at closing is equal to

the excess of the buyer's debits over the buyer's credits.

The main difference between a single agent and a transaction agent is

the fiduciary representation to one customer.

A retired couple has just bought a retirement home with a pier on a large lake. In this case the retirees' water rights extend to

the high water mark of the body of water at the shoreline.

dominant estate

the land that benefits from the easement

If escrow funds are held by a title company,

the licensee must name the title company on the sales contract.

In a graduated payment mortgage loan,

the loan payments gradually increase.

If commercial real estate rental prices are falling in a market, it is likely that

the market is over-supplied.

If there is a significant undersupply of homes in a market, construction will tend to increase. This is an example of

the market tending toward equilibrium.

All investors desire their investments to increase in value. However,

the more the investor stands to gain, the greater the risk that the investor may lose.

Additional brokerage offices are deemed as branch offices if

the name of the broker is displayed on all the offices.

If a joint tenant sells his or her interest to an outside party,

the new owner becomes a tenant in common with the other owners, who continue to hold a joint tenancy with each other and a tenancy in common with the new owner.

An item may be considered personal property as opposed to real property provided that

the owner intended to remove it after a period of time.

An implied agency relationship may be deemed to exist if

the parties act is if there is a contract.

At the closing of a mortgage loan

the parties complete all loan origination documents and the loan is funded.

Several buyers are competing for the last available home in a desirable new subdivision. One buyer calls the owner-developer directly on the phone and offers $20,000 over and above the listed price. The developer accepts the offer. At this point,

the parties have completed a verbal, executory contract.

A person may be qualified to make a claim for recovery from the Real Estate Recovery Fund if

the person notified the FREC of the claim by certified mail.

In the sales comparison approach, an adjustment is warranted if

the seller offers below-market seller financing.

Two parties enter into a contract for deed agreement. In this form of agreement,

the seller retains legal title while the buyer makes partial payments until the contract is fully executed.

A certified appraiser is one who has received certification by

the state in which the appraiser operates

If a rental information list is provided for a fee, the tenant may be fully reimbursed for the fee unless

the tenant demanded the refund after 60 days of paying the fee.

While a one-year lease is in effect, the tenant dies of a sudden illness. In this situation,

the tenant's estate is still obligated under the lease.

The formula for deriving a municipal jurisdiction's ad valorem tax base is

the total of all assessed values of properties minus exemptions.

As an economic product, real estate is distinguished by

the uniqueness of every parcel.

A condominium owner's share of maintenance and operations expenses are based on

the unit's pro rata share of the property value as defined in the declaration.

progression

the value of a house increases when other, more valuable houses are built in the area

In contrast to a tenancy in common, in a joint tenancy

there is a single title to the property.

A notable weakness of the sales comparison approach to value is that

there may be no recent sale price data in the market.

The reason lenders consider the loan-to-value ratio important in underwriting is that

they want to ensure there is more than enough collateral to cover the loan amount.

A lender lends money to a homeowner and takes legal title to the property as collateral during the payoff period. They are in a

title-theory state.

The Florida Antitrust Act of 1980 was enacted

to complement the federal antitrust laws

A property owner leases 60 acres of agricultural land for a renewable period of 5 years. In the context of real estate rights, this lease represents a(n)

transfer of a portion of the bundle of rights

When homebuyer Henry pledges his newly purchased home as collateral for a mortgage loan, the evidence of the pledge is the

trust deed or mortgage.

In the Rectangular Survey System, a range is the area in between

two consecutive meridians.

assemblage

two or more adjacent parcels combined into one

In a time-share freehold, owners acquire

undivided interests in the property as tenants in common.

A strength of the income capitalization approach is that it

uses a method that is also used by investors to determine how much they should pay for an investment property.

A lender who charges a rate of interest in excess of legal limits is guilty of

usury.

To create an enforceable option-to-buy contract, there must be an exchange of

valuable consideration and a right to buy

An owner transfers title to a property to a buyer in exchange for a motorcycle. This is an example of

voluntary alienation.

In the final step of an appraisal, the appraiser reconciles the value estimates derived by the various appraisal approaches by

weighing the applicability of the approaches and considering the quality of data supporting each approach.

To complete the sales comparison approach, the appraiser

weights the comparables.

A town is rapidly growing, but all the buildable vacant lots in the most desirable area have already been occupied. In this case, it is likely that the price of existing homes in that area

will increase.

An aggrieved person must file a fair housing complaint with the FREC

within 1 year of discrimination allegation.

A licensee who has received a final order of guilty for a violation complaint may appeal the order

within 30 days after the final order.