Real Estate Exam Prep

What phrase or words are required on a deed and are considered an "act of conveyance"?

"Grant and convey"

If Hal sold his client's listing for $230,000, but it appraised at $200,000 and the buyers agreed to put the extra $30,000 down, what will Hal's commission be if he charged 5%?

$11,500

James purchased five acres of land for $75,000. What was the cost per acre?

$15,000

The capital gains exclusion for couples filing jointly who have lived in their primary residence at least two of the five years immediately preceding the sale of the home is up to $500,000. What is the capital gains exclusion for single taxpayers?

$250,000

You practiced real estate without a license. What is your maximum penalty?

$5,000 fine and five years in prison

Charley's loan amount is $212,000, his appraised value is $275,000, and his interest rate is 4.375%. What is his annual interest?

$9,275

Convert 0.19 to a percentage.

19%

One mile contains ______ feet.

5,280

There is one opening on the commission. The current Commission has: 3 Brokers/1 Sales Associate/2 Consumers. Which individual is qualified to join?

A broker with at least five years of experience

What dilemma do dual agents face in states that allow dual agency?

A dual agent may not give preferential treatment to one party over the other.

Which of the following belongs in the commercial category referred to as retail?

A gift shop

Which of the following statements about dual agency in Florida is true?

A licensee can't act as a fiduciary for a buyer and a seller in the same transaction.

What is a comprehensive plan?

A long-term master plan for the development of a city or county

Which of these examples describes a prepayment penalty?

A monetary penalty imposed on a borrower for paying off a loan before its intended time

Jim decided to refinance his three-year-old mortgage that has a balance of $300,000. He has to pay a fee of 5% of the loan amount to the original lender for paying off the mortgage early. What is this fee called?

A prepayment penalty

Your clients, the Schwans, are financing their home purchase. They will most likely get their loan from ______.

A primary lender

Which of the following is true about positive misrepresentation?

A principal was harmed by the misstatement.

Cynthia loves her apartment and would like to have the option to buy it once her lease is up. Who's the best person to help Cynthia prepare a lease option?

A real estate attorney

With which type of mortgage does the interest rate vary according to a specified index?

Adjustable rate

What does the Federal Trade Commission regulate?

Advertising

What two legal documents will the purchaser of a mortgage receive when a mortgage is assigned to the purchaser?

Assignment of mortgage and estoppel certificate

What's the permanent marker used primarily for marking datums when measuring elevation?

Benchmark

What can tax losses be used to offset?

Both passive and active income

Consuela is a Florida real estate licensee, and she has three other licensees working under her supervision. What type of license does Consuela hold?

Broker

Matt is a developer who's obtained a permit that he must post on the job site. Which entity inspects the various phases of his work and signs off on the permit?

Building department inspectors

An investor can defer taxes on which of the following line items through Section 1031 of the Internal Revenue Code?

Capital gains tax and recaptured depreciation

On the closing statement, what's the term for an amount that shows up in the party's favor?

Credit

Which penalty type has imprisonment as a potential outcome?

Criminal

You're holding an open house for Brenda. Walt and Mary walk in and ask for a flyer that gives details about the property. Walt and Mary are now your ______.

Customers

What acronym can be used to remember factors that influence real property value?

DUST

What is an action landlords and property managers can take to avoid commingling funds?

Deposit all funds received into their own, separate accounts.

The rate at which a bank can obtain a loan from its Federal Reserve bank when using commercial paper as collateral is called the ______ rate.

Discount

In contract law, partial performance occurs when a party ______.

Does some, but not all, of what the party has agreed to do

Robert rushes over to talk about the new shed being built in his neighbor's backyard, which appears to be sticking onto his property by more than a foot. What legal term can Robert use to describe the placement of the shed?

Encroachment

Fannie Mae recently purchased the mortgage that Tim obtained from his bank to buy his new condo. What legal document states Tim's financial obligations for the record?

Estoppel certificate

Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under the _______.

Fair Housing Amendments Act of 1988

The Clean Water Act and the Rivers and Harbors Act are both enacted at what governmental level?

Federal

What may happen if a property lies in a designated floodplain?

Flood insurance may be required.

In Florida, real estate licensees may not fill in the blanks on a lease agreement that ____________.

Has a lease term longer than one year

Whoa—this market is hot, hot, HOT! You've had five offers come in since you listed your seller client's home yesterday. Of the options listed, which is the best strategy?

Have all buyers submit their "highest and best" offer, then help the seller decide which offer is most appealing.

What can help an investor ride out a holding period?

Having adequate reserves

Compared with condominiums, the monthly fees for a cooperative owner are typically ______.

Higher

To meet the requirements of the statute of frauds, an agreement must clearly identify the contract's subject matter, present the contract's essential terms and conditions, and ______ to be enforceable.

Identify the contracting parties

Which of the following would be a description used for real property?

In-ground

Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?

Income generated

What is the name for a type of asset which cannot be touched?

Intangible

Janice, who has lived in an apartment for many years, is interested in moving to a cooperative. She submits an application to the cooperative's review board, but her application is rejected. The board ______.

Is not required to inform her why her application was rejected

Which of the following is true about the Florida Green Belt Law?

It allows agricultural properties to be assessed at a lower rate.

Why is asbestos considered hazardous?

It can cause serious lung disease and cancer.

Why might a licensee want a buyer to sign a buyer representation agreement?

It helps ensure buyer loyalty.

What characterizes a development of regional impact?

It substantially affects more than one county.

Susan Duffield died testate at age 49. What can be said about Susan's estate?

It will be put through probate.

Which of these statements is NOT true about a specific lien?

It's always involuntary.

What's NOT true of an easement appurtenant?

It's an encumbrance on the dominant property.

Which of the following is a mortgagor's responsibility?

Keep the property in good repair.

Which of the following is a licensee's responsibility when she suspects an environmental issue exists on a property?

Know when, where, and how to seek expert assistance regarding environmental issues.

After a complaint is submitted to the DBPR, what comes next in the complaint process?

Legal sufficiency is determined and the complaint is investigated

The ______ usually represents the lender at a closing.

Lender's attorney

What does the Latin term "caveat emptor" mean?

Let the buyer beware

The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______.

Letters of apology to all affected consumers

What's it called when a number of percentage points is added to the index to determine the rate for an adjustable rate mortgage?

Margin

What is the best definition for "the time value of money"?

Money gains or loses value over time.

What is it called when a broker has approval to work at another brokerage while maintaining their own broker firm?

Multiple licensure

Which type of appraisal report is lengthy and often used for complex properties?

Narrative report

Which type of retail space often has service businesses, such as dry cleaners, hair salons, and convenience stores?

Neighborhood center

How large is one square yard?

Nine square feet

If a sales associate represents a seller in Florida, can that same sales associate represent someone who wants to buy the client's residential listing?

No, Florida prohibits dual agency for residential sales.

In a purchase offer, is earnest money required to have a binding contract?

No, because the buyer's consideration is the promise to buy.

What type of foreclosure is commonly used when a deed of trust is the security instrument?

Non-judicial

Parker entered into a contract with seller Derrick to buy Derrick's home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick's home, but his brother, Tom, agreed to take Parker's place as the buyer in the purchase contract. This is an example of ______.

Novation

What is the length of the statute of limitations to file a fair housing complaint with HUD?

One year

The terms of a person's will are subject to ______.

Operation of law

During what time of year are people least likely to want to move?

Over the winter holidays

Marcus bought two adjoining pieces of land that were zoned for commercial use. When he realized that combining the two parcels would dramatically increase the land's value, he jumped at the opportunity. What's this an example of?

Plottage

Brandon is the listing agent for Jane's property. After a couple of weeks on the market, two formal written offers come through. One is for well below the listing price, and another is a bit closer, but still under the list price. What should Brandon do with the offers?

Present both offers to Jane.

Which interest rate do banks use to offer consumer loans?

Prime rate

Property expense reimbursements are paid to the ______.

Property owner

Which Florida court ruling stated that an as-is real estate contract did not protect sellers from fraudulent non-disclosure?

Rayner v. Wise Realty Co.

What does RESPA stand for?

Real Estate Settlement Procedures Act

A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?

Refuse to rent to a female tenant.

Rose, represented by Sandy, and Tina, represented by Julie, entered into a sales contract for Rose to purchase Tina's home. Rose intended to ask Tina to repair the water heater, but the inspection deadline came and went. Now Rose has to buy the property as-is. Whose responsibility was it to convey Rose's wishes to Tina?

Rose and Sandy

Which type of lender specializes in taking in savings deposits and then lending money out to consumers through mortgages and other loans?

Savings and loan

It's impossible to generalize the impact events in other areas have on local real estate values. Which characteristic of the real estate market does this refer to?

Slow to respond

What is the term for sites identified by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act?

Superfund site

What signifies that a survey is certified and represents a guarantee of accuracy?

Surveyor's stamp

In Florida, unless they specify otherwise, a married couple that purchases property does so as tenants by the entirety. If the couple divorces, they become ______.

Tenants in common

What is a deed in lieu of foreclosure?

The borrower turns the deed over to the lender rather than face foreclosure proceedings.

Who closes on the mortgage loan commitment at closing?

The buyer and the lender's attorney

Consent is not present when _______.

The contract is signed under duress or undue influence

In completing a CMA, finding a comparable (competitive) property that had a quick sale may indicate which of the following?

The market for similar homes is good.

Which of these sentences accurately describes the phrase "statute of limitations"?

There are deadlines for certain types of legal action.

When Mark and Chrissy discovered that the seller of their recently purchased home had committed title fraud, they were told their title insurance policy wouldn't cover the legal costs to clear the title to their property. What's the most likely reason for this?

They didn't purchase owner's title insurance.

What type of estate involves a piece of real estate owned by multiple unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit in one- to two-week intervals during the year?

Timeshare

Which of the following is a recommended way for listing agents to use the MLS?

To advertise their listings

A year and a half ago, Jan was appointed to the Florida Real Estate Commission. How much longer does she have left on her term?

Two and a half

When does a buyer's market occur?

When supply is high and demand is low

Christina purchased a house from Thomas. When did she officially gain ownership of the property?

With the transfer of deed from the seller to the buyer

Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare?

Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing.

Can police power ever be used in a way that restricts citizens' freedom?

Yes, if it's for the public good.

It's the end of the day and you're running late for dinner at the Melting Pot, so you decide to go to the ATM and deposit your client's earnest money check into your own account, and then transfer it to an escrow account the next morning. Why is this wrong?

You can't commingle escrow funds with your own funds.