RE 2021 exam
What is the largest amount you can be fined by the Department of Business and Professional Regulation for a serious violation? $10,000 $100,000 $5,000 $50,000
$5,000
If a property's income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate? 20% 25% 40% 5%
20%. To calculate cap rate, divide the income by the property value. The formula for this is rate = income / value.
Your client Joseph has a commercial income-producing property. How long does he depreciate this property? 27.5 years 39 years Indefinitely Zero years (commercial properties cannot be depreciated)
39 years
Kurt promised his grandmother he'd pay her $200 a month to live in the room above her garage, and she never asked him to put that agreement in writing. He lived there a few months without paying a dime and then disappeared one night after trashing the place. How long does Grandma have to sue Kurt? Five years Four years One year Two years
4 - Poor Grandma! If she does seek damages from Kurt, she needs to do so within four years, according to the Florida statute of limitations for oral agreements. If they had put the agreement in writing, the limit would have been five years.
How many of the seven members of the FREC must hold active real estate licenses? Five Four One Seven
5 - Four of the members must have had active real estate licenses for five years before appointment and another one member must have had an active license for at least two years before appointment.
Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them? A conventional loan combined with a seller carry back. A conventional loan using the admiral's retirement money as a down payment. An FHA 203(k) loan to fix their new home up. A VA loan, which requires no down payment.
A VA loan, which requires no down payment. Current and former members of the military may be eligible for a VA loan. Although the FHA 203K loan allows for renovation financing, VA loans require no down payment.
Which of these statements best represents what happens after a federal fair housing complaint is made? A fair housing specialist will review the complaint. An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case. FHEO will contact the alleged perpetrator to gather information. HUD will review the complaint to determine if it's valid.
A fair housing specialist will review the complaint. After an initial complaint is made, a fair housing specialist will review it to determine if a violation has occurred. If there's a potential violation, the specialist will help the consumer file an official complaint.
Which of the following is an example of a ground lease? A landowner allows another party to harvest crops on his property. A landowner gives oil and gas companies permission to explore on her land. A landowner leases undeveloped land to another party, who then builds on that land. A landowner temporarily provides another party mineral rights to a property.
A landowner leases undeveloped land to another party, who then builds on that land. With a ground lease, the landowner leases the land to the tenant, who builds on the property. Ground leases are written for long periods so the tenant can recoup expenses, because when the lease is up, the landowner gets land back plus improvements.
Which of the following defines the term 'lis pendens'? A legal notice that a lawsuit is pending that affects the title of a property A legal term that means "it depends" and requires a certain minimum sales price of the property. A notice that notifies potential buyers of a pending lease A public listing and notice of foreclosure of a property.
A legal notice that a lawsuit is pending that affects the title of a property
Which of the following is an example of self-dealing? A licensee lists his property with another firm and sells his home without informing buyers of his license status. A licensee purchases a listing through his cousin but does not inform the seller. A licensee purchases a property for personal profit. A licensee sells a property for personal profit.
A licensee purchases a listing through his cousin but does not inform the seller. Making a profit is not illegal. Illegal self-dealing is having an undisclosed personal interest in a transaction.
What is a bound? A line that runs east to west A line that runs north to south A physical feature that defines the boundaries of the land The direction and distance of a line forming the boundary of a property
A physical feature that defines the boundaries of the land Bounds (boundaries) are physical features that define the boundaries or borders of the land.
Which of these is an example of blockbusting? A lender withholds mortgage loans in areas considered demographically risky. A licensee doesn't tell her buyer client about a first-floor condo because she felt it wasn't safe for the client. A licensee focuses on showing properties in areas that are demographically similar to her buyer clients' ethnicity. A real estate agent approaches a homeowner as soon as a demographic shift starts to occur in her neighborhood and convinces her that she needs to sell now, or she'll never be able to sell.
A real estate agent approaches a homeowner as soon as a demographic shift starts to occur in her neighborhood and convinces her that she needs to sell now, or she'll never be able to sell. Any attempt to convince property owners that property values are set to decline or sales will be difficult because of a specific protected group moving into the area is considered blockbusting.
What is the starting point for any land surveyor who has been asked to perform a survey? A review of existing historical records Satellite photos The point of beginning Visiting the site
A review of the historical records Land surveyors almost always review existing historical records before performing their own observations or visiting the site.
Which of the following is an example of constructive eviction? A landlord locks a tenant out of her unit after she fails to pay her rent for three months. A tenant chooses not to renew a lease when the term expires and moves out. A tenant dies. A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater.
A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater. A constructive eviction occurs if a tenant vacates the property because the landlord has failed to uphold the warranty of habitability.
Which of these methods of terminating a purchase offer requires the offeree to accept the terms exactly as they are presented by the offeror? Acceptance Assignment Counter-offer Rejection
Acceptance When accepting an offer, the offeree is agreeing to the exact terms of the offer. If the offeree wishes to negotiate, this requires a counter-offer, which will kill the original offer.
In the rectangular government survey system, what is a base line? An east-west line used as a reference point A north-south line used as a reference point The center-most section identified The center-most township identified
An east-west line used as a reference point Base lines run east-west, and principal meridians run north-south. Both are used in the rectangular government survey system.
Which condominium document creates the homeowners association? Articles of incorporation Bylaws Declaration of condominium FAQs
Articles of Incorporation The articles of incorporation create the homeowners association, which is the corporate entity responsible for operating the developed property.
The amount of money that remains after debt service is subtracted from net operating income equals what? Bottom line Cash flow Effective gross income Net gross income
Cash Flow The amount of money that remains after debt service is subtracted from net operating income equals cash flow.
Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing? Civil Rights Act of 1866 Civil Rights Act of 1968 Equal Credit Opportunity Act of 1974 Housing and Community Development Act of 1974
Civil Rights Act of 1968 Title VIII of the Civil Rights Act of 1968 is also referred to as the Fair Housing Act of 1968, prohibits discrimination in the sale, rental, or financing of housing based on race, color, national origin, and religion.
What agency/act is designed to regulate pollutants, such as oil and other hazardous substances, discharged into U.S. waters? Clean Water Act Coastal Zone Management Act Department of Environmental Conservation Rivers and Harbors Act
Clean Water Act The Clean Water Act regulates pollutants, such as oil and other hazardous substances, discharged into U.S. waters.
Which of the following is true regarding cooperatives? A cooperative is an individual venture. Cooperative ownership is considered personal property. Cooperative shareholders don't have to pay maintenance fees. Cooperative shareholders own the land, building, rights, and interests to their units.
Cooperative ownership is considered personal property Cooperative ownership is considered personal property, where condominium ownership is real property.
What type of involuntary lien is placed on a person's estate after their death if there are unpaid debts to creditors? Deceased person's debt lien Estate/ inheritance tax lien Mechanic's lien Real property tax lien
Deceased person's debt lien A deceased person's debt lien is placed on a person's estate if there are unpaid debts to creditors.
You've just received a trio from a title company. It contains an assessor's map, property profile, and one other item. What is it? Deed Marketing report MLS listing Tax record
Deed A trio contains a property profile (which has ownership, parcel, and tax information), an assessor's map, and a deed, which shows the owner of record, how title is vested, and date of recording.
What's it called when a development will have substantial impact on an area that affects more than one county? Concurrent development Counter-comprehensive development Development of regional impact Subversive development
Development of regional impact
When presenting a CMA, if you take the time to explain the CMA process, help the prospective sellers understand what's behind the numbers, and ultimately leave the decision of the list price up to them, what characteristic have you demonstrated? Documentation Effective communication Law-abiding Precision
Effective Communication
When the government takes private land for public use, compensation is required. This taking process is known as __________. Deed restriction Eminent domain Escheat Police power
Eminent domain Police power is the government's authority to restrict use of private land for public safety, health, or welfare. No compensation is required. However, when private land is taken for public use (e.g., for a road widening), compensation is required.
Mark is a buyer who wants to know which words in a deed make it clear that the property is being conveyed with the full bundle of rights. What words should Mark look for? Absolute ownership Fee simple Grant and convey In habendum
Fee Simple The words, "fee simple," refer to the highest level of ownership—ownership of the full bundle of rights.
A pair of property owners applied for an exemption on their Florida homestead and it was denied. They do not agree with the decision. Which of the following should they do? File a suit against the county property appraiser and the county tax collector. Refuse to pay their taxes. Send the TRIM notice back with a letter stating their opinion. Submit an alternative proposal to the county appraiser.
File a suit against the county property appraiser and the county tax collector Property owners have the option to informally meet with the county appraiser, petition the value adjustment board (VAB), or file a suit against the appraiser and tax collector in order to protest the appraiser's assessment.
Which of the following statements related to 1031 tax-deferred exchanges is true? Foreign investors may not participate. Foreign investors may participate. Investors may not participate. Residential homeowners may participate.
Foreign investors may participate.
What's another term for a valuation that's an unbiased opinion of value? Assessment Comparative market analysis Evaluation Formal appraisal
Formal appraisal Another term for a valuation is a formal appraisal. This is a professional appraiser's unbiased opinion of value.
According to the NAR Code of Ethics, the following characteristics must not be used to discriminate: race, national origin, religion, color, familial status, disability, sex, sexual orientation, color and _________. Gender identity Military status Occupation Political affiliation
Gender Identity Local jurisdictions may identify additional protected classes.
What does the income approach to value rely on when valuing properties that are five or more units? Gross income multiplier Gross rent multiplier Monthly gross rent Sales comparison
Gross income multiplier for five or more units, the gross income multiplier (GIM) would be used for the appraised value.
In which of these situations does Florida licensee Marie have to present her client with an energy efficiency brochure? Her buyer client Millie says she only wants to look at "green" houses. Her buyer clients, the Henries, are about to sign a sales contract on a house. Her client Thom wants to have the state rate his condo as energy efficient before he sells it. Her landlord client is having major renovations done to 20 of his rental units.
Her buyer clients, the Henries, are about to sign a sales contract on a house. Florida requires that buyers receive a brochure, before or during the execution of a sales contract, that explains the option of getting an energy efficiency rating on the property they're purchasing.
In a mortgage, the property is used as collateral for the loan. What's the term for the process of pledging something as collateral? Hypercollateral Hyperinflation Hyperventilation Hypothecation
Hypothecation Using a property as collateral for a mortgage is known as hypothecation. If it helps, think "Hypothetically, if I didn't pay my mortgage, you could take my house."
Identifying the purpose of the appraisal leads the appraiser to do what next? Determine highest and best use. Estimate value of land. Identify data needed. Use three approaches to estimate value.
Identify the data needed The first step is to state the problem so the appraiser can then identify the data that is needed.
What market indicator is expressed as the number of months it takes to sell homes at the current rate of sales? Inventory rates Price levels Sales volume Vacancy rates
Inventory rates Inventory rates express how long, on average, homes are staying on the market before they sell. "Sell," in this case, means going under contract, not closing.
What type of value may consumers be interested in if they are looking for the potential rate of return? Assessed value Insured value Investment value Value in use
Investment Value An investment value relates to the expected rate of return on investment in a property. Question 59
lorida sales associates are prohibited from preparing which of these types of real estate contracts? Lease agreements with a term longer than one year Listing agreements Option contracts Sales contracts
Lease agreements with a term longer than one year The Florida Supreme Court ruled that leases with a term longer than one year may only be prepared by attorneys, and real estate licensees may only fill in the blanks on lease agreements that are approved for use by real estate licensees.
A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee? Borrower Lender Loan Property
Lender - the lender holds the mortgage on the property, so the lender is the mortgagee.
Which one of the following options includes an item that is deductible on an income tax return if specific criteria are met? Closing costs Furnishings Loan origination fee Travel
Loan Origination Fee The loan origination fee is deductible; other closing costs are not. The following criteria must be met: The points are average for the geographical area, the home is used as the borrower's primary residence, and the documentation reflects the points were paid by the borrower as seen on the closing disclosure or settlement statement.
John works in an industrial park on the outside of town. He loves his job because he doesn't have to commute, and he gets to drive a forklift all day. The company he works for stores its inventory in this off-site location prior to shipping it out to customers. What kind of industrial space does John work in? Heavy industrial Light manufacturing Loft/warehouse building Manufacturing
Loft/warehouse buildings They are where inventory is usually stored prior to being shipped out.
Which one of these people qualifies for multiple licensure? Bethany, who is almost finished with her 180 hours of broker education and is ready to take her broker's examination. Eric, who works for the largest real estate firm in the state as a sales associate. Jason, a registered administrative clerk and licensed sales associate. Luiz, a licensed broker at his own small backwoods real estate firm.
Luiz, a licensed broker at his own small backwoods real estate firm. Only brokers can have multiple licensure, so Luiz is the only one who can apply.
Mark passed his license exam on February 10, 2014. What is the initial expiration date of his license? February 10, 2016 March 31, 2016 September 30, 2015 September 30, 2016
March 31 2015 Florida licenses expire on March 31 or September 30, 18 to 24 months after the initial effective date.
Which of the following is the price a lender believes the property will bring at a foreclosure sale? Insured value Investment value Mortgage value Value in use
Mortgage value Lenders won't lend on what they can't recoup. Therefore, the loan amount will be based on what a lender would hope to recoup, should a foreclosure sale be necessary.
How is the documentary stamp tax rate usually calculated? It's a flat fee of $50 for all sales prices under $100,000 and doubles every $50,000 after that, up to a maximum of $250. It's a flat fee of $50, regardless of sales price. Multiply $100 for every $10,000 in the sales price. Multiply the tax rate by the number of $100s in the sales price.
Multiply the tax rate by the number of $100s in the sales price. The documentary stamp tax rate is calculated by multiplying the tax rate by the number of $100s in the sales price.
What type of foreclosure is commonly used when a deed of trust is the security instrument? Eviction Judicial Non-judicial Strict
Non-judicial because the right to sell in the event of a default is part of the deed of trust's language, a non-judicial foreclosure may be used.
To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed is applied last? Conditions of sale Location Market conditions Physical characteristics
Physical Characteristics The elements considered in the sales comparison approach are applied in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristic
In a hot market, when all other sellers are listing at or above market rate, what pricing strategy will likely induce a bidding war? Pricing far above market value Pricing in line with comparable properties Pricing just above market value Pricing just below market value
Pricing just below market value In a hot market, when all other sellers are listing at or above market rate, pricing below market may incite bidding wars, fetching far more than pricing it at market rate. Bidding wars can occur in a hot market no matter the pricing strategy, however.
Which of these properties are exempt from the FIRREA federal appraisal guidelines? Properties valued at $400,000 or less Properties valued at $450,000 or less Properties valued at $500,000 or less Refinanced properties
Properties valued at $400,000 or less
Which of the following accurately describes the Division of Real Estate? Oversees the DBPR, DRE, and real estate commission. Provides administrative services for Florida Real Estate Commission. Regulates Florida businesses Regulates the activities of real estate professionals and schools
Provides administrative services for Florida Real Estate Commission.
A property's value is dropping because the neighboring property's yard is filled with trash. What's this an example of? Depreciation Progression Regression Substitution
Regression When the value of a higher-quality property is reduced by an adjacent lower-quality property, this is called regression.
Jamie owns a lakeside home. Over a period of years, the water has receded quite a bit, doubling the size of the sand beach on his property. What's the name of this process? Accretion Erosion Exclusion Reliction
Reliction Reliction is the gradual receding of water, which uncovers new land.
In Florida, sales associates have legal authority to prepare ______________. Any type of legal document related to real estate Deeds and promissory notes Lease agreements Sales contracts
Sales Contracts In Florida, licensed sales associates and licensees have the authority to prepare sales contracts, along with option contracts, listing agreements, buyer representation agreements, and leases with a term of less than one year.
Cassandra is a business opportunity broker. Which of the following must be true? She does not deal with the sale and purchase of personal property. She is not required to have a real estate license. She primarily deals with the sale and purchase of larger businesses. She primarily deals with the sale and purchase of smaller businesses.
She primarily deals with the sale and purchase of smaller businesses. As a business opportunity broker, Cassandra primarily deals with smaller businesses, like sole-proprietors or partnerships, with limited amounts of fixed assets.
A planning commission has final authority over which of these options? Community goals Comprehensive plan Site plan Zoning ordinances
Site Plan The planning commission has final authority over three things: subdivision plat approval, site plans, and sign control.
Which statement best describes traditional planning? Developers identify how land will be used. Residents determine how land will be used. Specialists with different areas of expertise work separately and focus on designing "their" areas. Specialists with different areas of expertise work together, focusing on overall use.
Specialists with different areas of expertise work separately and focus on designing "their" areas Under traditional planning, specialists with different areas of expertise worked separately and focused on designing "their" areas. This created pockets of developed space and isolated space.
Jamie has received a complaint against her for something she knows she did, and she doesn't want an informal hearing. Her best option is to ____________. Hire an attorney to dispute the facts Request a formal hearing Stipulate as to the facts, and waive a hearing Voluntarily have her license revoked
Stipulate as to the facts, and waive a hearing Jamie could have requested a formal hearing, but that would cost time and money, and if the facts are indisputable and she doesn't want an informal hearing, she would be better served by admitting her wrong doing and taking her lumps.
Since the birth of their first child, Charlotte and Darryl have spent far more time at the drug store than they care to admit. Luckily, it's close to their house in a small area of retail stores arranged in an "L" shape. What kind of retail space does this describe? Factory outlet Mall Neighborhood center Strip mall
Strip mall Strip malls and strip centers are typically arranged in an "L" or "U" shape, have a large parking lot in front, and often contain an anchor tenant, such as a drug store.
Blane owns a barbershop. He polls his customers and learns that they tend to come from less than a mile away. That's probably because Blane's store is in which type of location? Factory outlet mall Neighborhood center Regional shopping center Strip mall
Strip mall - they tend to offer goods and services for a very local area of one mile or less. Question 9
The Simpsons are buying a five-acre lot that was part of a much larger tract of acreage. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description? A benchmark A plat map A survey Metes
Survey A survey is used to create, verify, or correct a legal description. It's a professional on-site measurement of the lot lines and dimensions of a property.
Allentown sits on the river, and its many bridges need repair. Which police power is Allentown likely to use in order to fund improvements to its bridges? Condemnation Escheat Taking Taxation
Taxation The purpose of taxation is to meet the need for public works by funding them through a stable source of income that allows many to share the burden.
Who or what entity has legal title to a financed property in a lien theory state? The beneficiary The borrower The lender The state
The borrower The borrower is the legal owner and has the right to possess and control the property. The lender has the right (after a loan default) to take possession of the property through foreclosure.
Tim's license is in voluntary inactive status and it's time for renewal. What happens if he does not renew before the license expiration date? The license becomes null and void The license remains in voluntary inactive status The license reverts to active status The license reverts to involuntary inactive status
The license reverts to involuntary inactive status Real estate licenses that are not renewed by the expiration date automatically revert to involuntary inactive status. Tim needs to renew his license to retain his voluntary inactive status.
Which one of the following transactions does NOT require disclosure of a single agent brokerage relationship? The sale of a 6-acre agricultural property The sale of a lot for building a residential duplex The sale of a residential property with three units The sale of a retail store
The sale of a retail store The Brokerage Relationship Disclosure Act requirements do not apply to nonresidential transactions, rental or leasing, auctions, appraisals, or disposition of interest in business enterprises.
Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate? Legal purpose Offer and acceptance The law of contracts The statute of frauds
The statute of frauds The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract.
The idea that $100 gains or loses value over time is called what? Deflation Inflation Stagflation Time value of money
Time value of money A dollar today will not carry the same value in 10 years. This is the idea of time value of money. The value of the dollar may either rise or fall.
Which of these statements about title insurance is true? "Lender's policy" and "owner's policy" are two names for the same thing. Only the lender may purchase title insurance. Title insurance coverage includes the service of a "title search" prior to the close of the sale. Title insurance is an unnecessary expense.
Title insurance coverage includes the service of a "title search" prior to the close of the sale. Title insurance helps the buyer (and lender, if applicable) confirm that the title is clear and marketable. Return To Course Home View Exam Results
When the planning board gets together, Carl focuses on commercial aspects, Renee focuses on residential areas, and Arthur focuses on agricultural spaces—all without any insight from one another. What type of planning is this? Form-based planning Integrated planning Pocket planning Traditional planning
Traditional planning Under traditional planning, specialists with different areas of expertise worked separately and focused on designing "their" areas. This created pockets of developed space and isolated space.
Gary and Anita wish to protest their property tax assessment by petitioning the Value Adjustment Board (VAB). What is the time frame in which they must do this? Any time before the taxes are due. Within 10 days of receiving the TRIM notice. Within 25 days of the date the TRIM notice was mailed. Within 30 of the payment due date.
Within 25 days of the date the TRIM notice Property owners have 25 days from the date the TRIM notice is mailed to file a petition with the VAB and protest the property tax assessment.
You recently listed an historic home more than 100 years old, which was the site of a suicide many years ago. A spirit is believed to roam the grounds, but the current owner doesn't want this shared with prospective buyers. Which action best demonstrates good faith? You follow the owner's wishes because the suicide and haunting don't need to be disclosed. You tell the owner you don't have to disclose that the property was the site of a suicide, but do need to disclose the ghost. You tell the owner you don't have to disclose the ghost, but do need to tell buyers that a suicide occurred on the property. You tell the owner you must disclose whether a property was the site of a suicide or homicide.
You follow the owner's wishes because the suicide and haunting don't need to be disclosed. Good faith means properly disclosing material facts. Usually, you don't need to disclose ghosts, suicides, or homicides related to the property unless the prospective buyer asks you directly about them.
Which of the following scenarios accurately represents your environmental disclosure responsibility as a real estate licensee? You must disclose all known environmental hazards for both residential and commercial properties. You must disclose all known environmental hazards for commercial properties only; residential disclosure is the seller's sole responsibility. You must disclose all known environmental hazards for residential properties only; commercial disclosure is the seller's sole responsibility. You must disclose all suspected environmental hazards for both residential and commercial properties.
You must disclose all known environmental hazards for both residential and commercial properties. Your responsibility as a real estate professional includes disclosure of all known environmental (or property condition) defects, regardless of the type of property.
When must lenders provide borrowers with a disclosure statement regarding finance charges, annual percentage rate, etc.? At loan application or within three days after loan application Prior to loan application Prior to or within 10 days after the loan application Prior to or within three days after the loan application
at loan application or within 3 days after loan application
What is the name of a type of ownership where each person has the same percentage of ownership and the right of survivorship, but are not married? Joint tenancy Tenancy at will Tenancy by entirety Tenancy in common
joint tenancy. Just remember that joint tenancy is for anyone, and tenancy by entirety is for married people. Tenancy in common does not have the right of survivorship.
You're speaking to a potential buyer client who thinks agents just drive up the price of the house in order to increase their commission. Which fiduciary duty should you mention when explaining why that wouldn't happen in an agency relationship? Confidentiality Disclosure Loyalty Obedience
loyalty The duty of loyalty requires an agent to put the interests and needs of the client first.
How many duties are owed by a designated sales associate? Nine Seven Three Zero
nine Designated sales associates act as single agents, and a designated sales associate disclosure must list the same nine duties as a single agent notice. These are the DAD UP COLD duties.