Real Estate 45 Hour Post Licensing

fixed rate mortgage

A loan secured by real estate that has the same rate of interest for the life of the loan.

Florida Americans with Disabilities Act

A state law that implements and mirrors portions of the Americans with Disabilities Act.

florida fair housing act

A state law, modeled after the federal Fair Housing Act, that prohibits discrimination based on race, color, religion, sex, national origin, familial status, or handicap.

random changes

Irregular fluctuations of the economy that may be caused by legislative and judicial decisions, wars, weather, et cetera.

A neighborhood has 480 homes. Last year, 69 homes were listed and 60 were sold. What is the turnover rate?

The answer is 12.5%. The turnover rate is 12.5% annually (60 sales ÷ 480 homes).

A lead-based paint hazard disclosure must be made if the house being sold was built before

The answer is 1978. Because of the danger of neurological damage, the Residential Lead-Based Paint Hazard Reduction Act requires that disclosure be made to purchasers of residential buildings constructed before 1978. The law requires that the seller, landlord, or licensee provide the following before the contract is signed: a lead hazard information pamphlet; information about the presence of any known lead-based paint or lead-based paint hazard; and a 10-day period to conduct an inspection.

FHA requirements for housing expense ratios (HER) and total obligations ratio (TOR) are

The answer is 28% (HER) and 36% (TOR). FHA ratios are 28% and 36%.

The final step in the listing presentation is

The answer is asking for the order. The final step in the listing presentation is to ask for the order.

Changes and trends in the general business economy fall into three categories-seasonal, random, and

The answer is cyclic. Cyclic fluctuations are also called business cycles.

Which is NOT a type of operating expense?

The answer is depreciation. Depreciation is not included as an operating expense. It is part of the calculation used to determine taxable income.

A Priority 1 buyer is one who

The answer is has an immediate need to buy. A Priority 1 buyer has an immediate need to buy.

Which is NOT correct about the new Loan Estimate?

The answer is it combined the HUD-1 Settlement Statement and the Good Faith Estimate. The form actually combined the Good Faith Estimate and the Truth-in-Lending Statement, must be given to the borrower within three business days, and shows the mortgage payments.

The increase in radon gas problems in houses is the result of

The answer is more energy-efficient buildings. In older buildings, the lack of airtight qualities allows radon to escape. Newer buildings are "tighter," keeping the gas inside.

An open listing is created by

The answer is negotiation. An open listing is created by negotiation.

MOST listings expire because they are

The answer is overpriced for the market. It is often believed that a house that needs paint or that is ugly may be the reason it didn't sell. It's still the price.

Bonuses are acceptable as income on a loan application, provided they

The answer is regular occurrences. Irregular receipts of income cannot be relied on.

When compared with a 30-year mortgage, a 15-year mortgage has

The answer is slightly lower interest rates. Because the risk of loss from inflation is less with a 15-year loan, the interest rates are lower.

A lender, interested in evaluating an applicant's willingness to pay, reviews

The answer is the credit report. The credit report shows the willingness to pay. Income shows the ability to pay. Assets show what a person owns.

The ratio of monthly housing expenses to monthly income is

The answer is the housing expense. The ratio of monthly housing expenses to monthly income is the housing expense ratio.

A sales associate must give the earnest-money deposit to the broker no later than the end of

The answer is the next business day. The sales associate must turn the deposit over to the broker no later than the end of the next business day. The broker must deposit the funds no later than three business days after the sales associate has received the funds.

When the seller wants to make a counteroffer,

The answer is the sales associate should prepare a counteroffer form; the seller should sign the original offer and the counteroffer. A counteroffer form is preferable to marking up the original offer.

T or F:Business cycles consists of four phases: expansion, recession, contraction, and recovery.

The answer is true. Business cycles, called cyclic fluctuations, are wavelike movements of increasing and decreasing economic prosperity.

performance

The completion of a contract's requirements.

loan underwriting

The evaluation of risk when a lender makes a mortgage loan to reduce the lender's exposure to loss.

quantity of income

The total amount of a borrower's income from all sources.

assets

Things of value owned by a person or organization.

A five-star homes list will help the sales associate get an appointment to show property.

True

Callers who are asking about property they saw from a sign usually ask for the

price

principal

(1) The person who enters into a fiduciary relationship with a single agent licensee. (2) The amount of money remaining due on a mortgage loan.

Community Association Manager

An individual licensed by the Department of Business and Professional Regulation who is paid to perform certain functions for a residential homeowners association.

Which part of the CMA shows overpriced listings?

Expired Listings

Ad valorem tax disclosure Contract to purchase

Require BUYER disclosure: Disclosure that property taxes may increase after the purchase from reassessments

T or F: One of the first steps for a licensee to take is to get the buyer preapproved by a lender.

TRUE

A comparable property sold two months ago for $138,000. It has four bedrooms (the subject property has three) and is 160 square feet larger as a result. An analysis shows that the additional room/space makes an $8,000 difference. The subject is newer and in slightly better condition, so you estimate a difference of $5,000. The adjusted sales price of the comparable property is

The answer is $135,000. $138,000 comparable property price - $3,000 net adjustment = $135,000.

After completing a review of the CMA, a sales associate and a seller agree on a list price of $240,000. Seller's expenses, including brokerage fee, are estimated at $17,600, and prorations for taxes and interest paid in arrears are estimated at $6,700. The mortgage payoff is expected to be $196,500. What is the estimated net proceeds to the seller?

The answer is $19,200. Net proceeds to the seller would be $19,200 (equity - expenses and prorations; $43,500 - $17,600 - $6,700).

The Florida Realtors®/Florida Bar Residential Contract for Sale and Purchase is LEAST suitable for transactions involving the sale of

The answer is a business. A business purchase is a complex transaction involving much more than the real estate, and a real estate contract form would be inappropriate.

Contract contingencies should be cleared

The answer is as soon as possible after the contract has been signed. The seller needs to know whether there is a problem as soon as possible so, if necessary, the property may be put back on the market.

Before a buyer begins seeing properties, the sales associate should NOT

The answer is ask the buyer about his feelings about having minorities living in the neighborhood. A licensee may not ask whether minorities living in the neighborhood are a problem.

The employment verification is NOT a check on the applicant's

The answer is assets. The employment verification checks the length of employment, the applicant's salary, and the likelihood of continued employment.

Another term for before-tax cash flow is

The answer is cash throw-off. Cash throw-off is another term used for before-tax cash flow.

When "time is of the essence," failure of any party to perform within established time limits can result in automatic

The answer is default by the tardy party. If a party promises to do an act by a certain time or date and fails to do it, the party has breached the terms of the contract.

T or F: If a seller initially expresses disinterest in a listing agreement, you should not continue to pursue business with that seller.

The answer is false. Even if a seller initially expresses disinterest in a listing agreement, you should explain the many benefits that come with working with a licensed real estate professional.

A man has a FICO credit score of 725. He pays an additional $1,000 down on his installment debt. His FICO score will MOST likely

The answer is increase because he has less debt. The man's FICO score will likely rise slightly because his debt is lower.

How many apartments should be on a show list?

The answer is no more than three of each type. The limited number of show units also suggests that space is at a premium and that the prospective tenant must make her decision quickly.

The component of an adjustable-rate mortgage that does NOT usually change is

The answer is the margin. The index changes; the margin is constant.

T or F: Origination fees and discount points paid by a borrower will cause the annual percentage rate (APR) of a loan to be higher than the interest rate on the note.

The answer is true. Origination fees and discount points are included to calculate the APR but don't affect the loan interest rate.

Which is NOT one of the basic loan processing procedures?

The answer is use of an appraisal management company. The four basic loan processing procedures are: determining a borrower's ability to repay the loan; estimating the value of the property being pledged as collateral to guarantee this repayment; researching and analyzing the marketability of the collateral's title; and preparing the documents necessary to close the loan transaction.

Potential Gross Income (PGI)

The total annual income a property would produce if it were 100% occupied, with no vacancy or collection loss.

Priortize

To set up a list of activities in an order based on their importance.

nonverbal communcation

Unspoken communication expressed by the position of the body, hands, arms, legs, or facial expressions, commonly called body language.

exercised

Used in connection with an option contract. An option contract is a unilateral contract until the optionee agrees to purchase and is then said to have "exercised" the option.

What is the MOST effective way to get an FSBO listing?

Visit

When making a to-do list for the day, a sales associate should NOT

save the least pleasant tasks for after lunch.

Single Agent

A broker who represents either the seller or the buyer in a real estate transaction, but not both.

farm

A geographic area selected for special prospecting attention by a real estate licensee.

jargon

A word or expression related to a specific vocation or profession that a layperson may not understand.

FRBO

An owner who attempts to rent his own property without using a broker.

A comparative market analysis would be LEAST effective when trying to establish value for a A) vacant property. B) public school property. C) residential property. D) duplex.

B) public school property.

Condominium Act—purchase cancellation

BUYER: 15-day cancellation privilege when buying from a developer; 3-day cancellation privilege when buying a resale unit

T or F :A seller's equity is the same as the net proceeds from sale.

False

T or F: Nonverbal communication is rarely more important that what a person says.

False

False Or Misleading Statement

In real estate, a statement made by a licensee or a party in a real estate transaction that is not factual.

written communication skills

The ability to communicate effectively in letters, emails, and other documents.

If the buyer asks to have occupancy of a house before closing, the BEST suggestion from the sales associate to the seller would be

The answer is "don't let them move in if you can avoid it." Allowing buyers to move in before closing creates many unnecessary problems that may result in a failed closing.

A prospective buyer makes $4,000 monthly. What monthly payment could the buyer make based on FHA's 31% housing expense ratio?

The answer is $1,240. $4,000 × .31 = $1,240.

On what page of the Closing Disclosure will the prorations be found?

The answer is 3. Prorations on the Closing Disclosure are found on page 3.

Total interest rate increases on an FHA adjustable-rate loan may NOT exceed what percentage over the life of the loan?

The answer is 5%. This is very attractive compared with the 6% lifetime cap on conventional loans.

A very important social media site for uploading and viewing videos is

The answer is YouTube. YouTube is the most important social media site for videos.

What is NOT a requirement for a valid lease?

The answer is amount of leasing commissions. The amount of leasing commissions would be in the management agreement, not the lease.

Unless either party elects to have a discrimination case heard in court the case will be heard by

The answer is an administrative law judge. After HUD issues a charge, a HUD administrative law judge (ALJ) will hear the case unless either party elects to have the case heard in federal civil court. Parties must elect within 20 days of receipt of the charge.

A broker must disclose known facts that materially affect the value of residential property when that broker is

The answer is any of these. All licensees, regardless of the brokerage relationship with a buyer, must disclose material facts affecting the value of residential property.

The principle of value that says improvement to a property is worth only what it adds to the property's market value, regardless of actual cost, is called the principle of

The answer is contribution. Any improvement to a property, whether to vacant land or a building, is worth only what it adds to the property's market value. An improvement's contribution to the value of the entire property may be greater or smaller than its cost. A licensee's opinion should be governed by a feature's contribution to value, not its reported cost.

Of all the factors that influence market value, the MOST important is the

The answer is highest and best use. What a person can realistically do with a property is what determines its value.

A broker just listed a house for six months. The listing will automatically renew for an additional three months unless canceled in writing by either party. This type of agreement

The answer is is a violation of the license law. Self-renewing listings are prohibited by Florida law.

Writing ads for a new listing would be considered what type of activity in the daily activity log?

The answer is office and administrative. Writing ads is considered office and administrative activity.

Funds set aside to prepare for the eventual replacement of worn-out appliances, carpeting, and drapes are called

The answer is reserves for replacements. Reserves are established to stabilize the net operating income from year to year.

If sellers, when listing the property, offer to leave a washer-dryer combination, the sales associate should

The answer is suggest it not be included until an offer is received. The listing sales associate should suggest that the washer-dryer not be offered with the property. A buyer may not really want the items and will take them but not pay any more for the property. The appliances are sometimes useful in negotiating a counteroffer.

T or F: Many investors prefer office buildings to residential apartments because tenants tend to occupy the properties longer, tenant complaints usually are made during business hours, and fewer collection problems occur.

The answer is true. The management burden is usually less intense than from a residential property.

adjustments

The method used by brokers and appraisers to account for differences in comparable properties. If a subject property is superior, the appraiser makes a dollar adjustment increasing the sale price of the comparable. If the subject property is inferior to the comparable property, a negative adjustment is made.

T or F: The term used for a lender's risk analysis is underwriting.

The statement is true. Loan underwriting is the evaluation of the risks involved when issuing a new mortgage.

T or F: One of the MOST effective risk-management tools available to licensees is to suggest that the buyer order a home inspection.

True

The base of the pricing pyramid shows

many buyers at lower prices.

The maximum period between a listing sales associate's calls to the sellers should be

7 days

radon

A colorless, odorless gas occurring from the natural breakdown of uranium in the soil. Many experts believe radon gas to be the second-leading cause of lung cancer.

Warranty of Owner Clause

A hold harmless clause in a listing agreement whereby the seller warrants that all information given to the broker is correct.

quality of income

A lender's analysis of factors that reveal the likelihood of the borrower's income continuing over a long period

Comparable Property

A similar property in the same market area that may be used to help estimate the value of the property being appraised.

Intangible Tax

A tax of 2 mills (.002) levied on the amount of new mortgage indebtedness.

A listing farm should NOT have what characteristic? A) Middle to upper price range B) Not currently being farmed C) Increasing property values D) Highly desirable area with low turnover

D) Highly desirable area with low turnover

Deferred Maintenance

Maintenance that needs to be done but that has not been done for some reason, usually economic.

Canvassing

Prospecting for buyers or sellers by telephoning or walking door to door.

loan processing procedures

Steps taken by a lender to ensure that underwriting and documentation of a mortgage loan are done in a manner that reduces the lender's exposure to loss.

The buyers have been prequalified for a $160,000 mortgage. If the buyers have enough cash for a 20% down payment, they can get a house priced at

The answer is $200,000. The buyer can purchase a $200,000 home ($160,000 ÷ .80).

When the term recently is used to describe a comparable sale, it is generally understood to mean that the property sold within the past how many months?

The answer is 6. Most appraisers try to find sales for the previous six months. Real estate licensees should be looking for sales within the past six months as well.

Which is correct about fair housing requirements?

The answer is an apartment building owner has the right to reject an applicant because of poor housekeeping habits. All other choices are incorrect.

A broker who sends a fax must have

The answer is an established business relationship with the recipient. A person who sends a fax must have an established business relationship with the recipient.

T or F: Sensitivity to the thoughts and feelings of others is called sympathy.

The answer is false. Sensitivity to the thoughts and feelings of others is called empathy.

If you are the listing sales associate and there are multiple offers to be presented, from both your company and other companies, you should

The answer is get your broker involved. When there are multiple offers on a property, especially if one of the offers is from the listing office, the sales associate should get the broker involved so there is no perception that the presentation was not fair to all parties.

Which statement is FALSE regarding a violation of the statute of frauds?

The answer is it carries with it prescribed time frames for enforcement. It is the statute of limitations, not the statute of frauds, that has time frames for enforcement.

The BEST listing source for new associates is

The answer is sphere of influence. The most powerful source of listings is from previous customers.

Accessibility standards for restrooms do NOT require that: A)grab bars should be behind and on the side wall nearest the toilet. B)at least one lavatory should have a 30-inch-wide-by-48-inch-deep clear space in front. C)the bottom of the lavatory should be no lower than 21 inches, and the rim should be no higher than 42 inches. D)a wheelchair-accessible stall should be at least 5 feet square as is necessary to make turns.

The answer is the bottom of the lavatory should be no lower than 21 inches, and the rim should be no higher than 42 inches. In fact, the bottom of the lavatory should be no lower than 29 inches and the rim should be no higher than 34 inches.

In the Florida Realtors® contract, if a survey shows an encroachment,

The answer is the encroachment will be treated as a title defect. If a survey shows an encroachment, the Florida Realtors® contract considers it a title defect, and the curing provisions of the contract will apply.

T or F: The documentary stamp taxes on the deed for a house that sells for $180,000 would be $1,260.

The answer is true. $180,000 ÷ $100 = 1,800 increments; 1,800 × $0.70 = $1,260.

T or F: The definition of market value now includes foreclosed properties as comparable sales.

The answer is true. In order to find market value in many areas, the high numbers of foreclosed properties really establish market value.

Which FSBO activity is more likely to generate a listing?

The answer is visiting. Visiting is the most effective approach for generating a listing.

Yesterday, a broker obtained a 90-day listing contract that has a self-renewing provision extending the agreement an additional 60 days after expiration unless either party cancels in writing. The listing contract is

The answer is void. Listing contracts with a self-renewing provision are not legal and are void under Florida law.

Transactional Characteristic

The factors related to a real estate transaction itself, such as time of sale and financing terms.

Cap

The maximum amount that an interest rate can increase per year, or during the life of a loan.

T or F: A biweekly mortgage has 24 payments each year.

The statement is false. A biweekly mortgage is paid once every two weeks. There are 52 weeks in a year, so 52 ÷ 2 = 26 payments.

T or F: A comparative market analysis is NOT an appraisal.

True

Some listings don't sell during the listing period for a variety of reasons, including:

market conditions (oversupply of homes available for sale), property condition, too short listing period, uncooperative owner or tenant, overpriced property, or poor marketing effort.

The parties to a listing agreement are

the seller and the broker

A broker must give the sellers a signed copy of the listing agreement

within 24 hours

A sales associate is trying to list an FSBO house valued at $250,000 with a $220,000 mortgage. The seller says, ''Your commission is too high!'' The sales associate says, ''But our listing commission is only 6%!'' What is the commission as a percentage of the seller's equity?

50%

Ramps

For every inch of height, ramps should have at least 1 foot of length (1:12) and have a railing at least 34 inches high. There must be a 5-foot-long level landing at every 30-foot horizontal length of ramp, and at the top and bottom of the ramp and at switchbacks.

Exclusive Agency Listing

Owner lists with one broker but can sell himself without paying a commission

targeted strangers

Persons not known to a licensee who are qualified as prospects by income, occupation, or residence address.

refinance

Placing a new mortgage on a property to replace another mortgage.

Effective Gross Income (EGI)

The amount of rent and other income actually collected by the owner. When preparing an income statement, vacancy and collection losses are deducted from potential gross income, and other income such as vending machine collections is added.

Before Tax Cash Flow (BTCF)

The amount of spendable income from an income property after paying operating expenses and debt service, but before the effect of income taxes. Sometimes called cash throw-off.

A $127,000, 30-year fixed-rate mortgage with a 5.5% rate has a mortgage payment factor of .0056779. Annual payments for property taxes are $2,400. The annual insurance premium is $600. What will be the monthly PITI payments?

The answer is $971.09. Multiply the mortgage by the factor, and then add one-twelfth of the taxes and insurance. Solution: $127,000 × .0056779 = $721.09; $721.09 + $200 taxes ($2,400 ÷ 12) + $50 insurance ($600 ÷ 12) = $971.09.

A salaried, unlicensed manager of a resort condominium in Florida legally may rent individual condominium units if the rental periods do NOT exceed

The answer is 1 year. If the manager rents units for more than one year, or is paid a commission, the manager must get a real estate license.

The FHA adjustable-rate mortgage limits increases on interest rates to

The answer is 1% annually. An FHA ARM has several advantages over a conventional ARM. One of the biggest is that the interest-rate increase each year is limited to 1%, with a lifetime cap of 5% (conventional caps usually are 2% per year, with a 6% lifetime cap).

A broker may NOT work with a buyer or a seller as

The answer is a dual agent. Florida law specifically prohibits dual agency.

Licensed sales associates working at the seller's single agent brokerage firm

The answer is are legally bound to represent the seller. If a brokerage firm represents the seller as a single agent, all licensees in the firm are single agents of the seller and must represent the seller's interests.

The Florida Realtors® contract requires that the seller warrant appliances, heating and cooling systems, and plumbing systems to be in working order

The answer is at closing. The Florida Realtors® contract requires that appliances be in working order on the day of closing, so if the repairs cannot be completed, the seller must pay for the repairs.

The BEST way to acquire product knowledge is to

The answer is be in the marketplace. The best way to gain product knowledge is to be in the marketplace seeing property.

What type of listing is used when an owner selects one brokerage firm to sell his property but reserves the right to sell the property personally and not pay a commission?

The answer is exclusive agency. The exclusive agency listing allows a seller to list with one broker, yet sell the property herself without being liable for a commission.

When presenting an offer to the sellers, it is helpful to

The answer is get them to like the buyers. It is important that the sellers like the buyers, because they are more likely to be reasonable with a counteroffer, or, in case of multiple offers, the buyer they like is more likely to be favored.

Which is FALSE about an IDX?

The answer is it is a website that allows licensees to post a daily blog. IDX is the acronym for internet data exchange. IDX is probably the most important content on your website. It's a way for brokers to share their listings on the internet. It has nothing to do with posting a blog.

The legal description entered into the listing agreement and into MLS

The answer is should be taken from the owners' deed or the public records. The legal description should be taken from the owners' deed or the public records to ensure it is complete and correct.

How does a buyer benefit by agreeing to pay a brokerage commission to her broker?

The answer is the broker can show the buyer unlisted properties such as FSBOs and foreclosures. A broker who is not protected with a commission agreement is unlikely to show properties unless the seller agrees to pay the commission, not common with FSBOs or foreclosure sales.

When a loan officer evaluates a credit report, the MOST important part of the report is

The answer is the payment history. If a person is always late on payments, the lender will reject the application.

time management

The organization of a person's day to maximize efficiency. It includes planning, scheduling, and prioritizing.

T or F: Of all the factors that influence market value, the primary consideration is the highest and best use.

True

Sales associates should make a log of daily activities and

spend more time on direct $.

Under the Housing for Older Persons Act, certain communities are exempt from the familial status portion of the Fair Housing Acts if at least 80% of the units have at least one person who is

55 or older.

sales contract

A bilateral agreement in which a buyer agrees to purchase a seller's property at a specified price and terms.

Professional Ethics

A body of accepted codes of behavior for a specific industry.

opinion of value (BPO)

A broker's price opinion, usually based on a comparative market analysis.

arm's-length transaction

A business transaction in which the parties are dealing in their own self-interest, not being under the control of the other party. One of the requirements before a comparable sale should be used in an appraisal.

contraction

A component of an economic cycle that follows a recession and that experiences reduced sales, slower production, worker layoffs, and unemployment.

to-do list

A daily list, usually designed in priority order, of tasks to be completed that day.

closing disclosure

A detailed accounting of charges and credits for the buyer and the seller in a real estate transaction.

single agent notice

A disclosure form informing the principal of the duties of his single agent.

Consent to Transition to Transaction Broker

A disclosure form that allows a single agent to become a transaction broker. The notice must be signed by the principal before the broker can make the change.

No brokerage relationship notice

A disclosure that must be given by a licensee who does not represent a buyer or a seller before entering into an agreement or showing a property.

Property Condition Disclosure

A form designed for disclosure to a buyer of any property defects. The form is normally signed by the seller, and the buyer signs a receipt that the buyer has received the disclosure.

product knowledge

A licensee's familiarity with the real estate market and specific properties available for sale

marketing knowledge

A licensee's knowledge of the sales process, including the psychology of selling, advertising, personal marketing, and prospecting.

fallback list

A list of properties similar to the property being advertised that can be used by the licensee if the advertised property does not appeal to the person responding to the ad.

Exclusive Right-of-sale Listing

A listing that requires the owner to pay the listing broker no matter who sells the property. The broker is automatically the procuring cause of the sale.

credit scoring

A method of credit reporting using a numeric score. A higher score reflects a person with better credit history.

passive prospecting

A method of prospecting that does not include direct face-to-face or telephone conversations. Advertising and direct mail are examples of passive prospecting.

codes

A method used by persons to discriminate in employment and housing. An employer may pencil in a series of numbers on an application form (for example, the number 11 may mean "Asian" and the number 15 may mean "African American"). These tactics are illegal.

Biweekly Mortgage

A mortgage that requires the borrower to make payments every two weeks (26 payments per year). The payment is calculated by dividing the monthly mortgage payment by two. The effective result is that the borrower makes 13 monthly payments per year.

Handicap

A physical or mental impairment that substantially limits one or more major life activities.

Reserves for Replacement

A portion of an investment property's income that is set aside to pay the cost of replacing major building components when necessary.

Certified Property Manager (CPM)

A professional designation awarded by the Institute of Real Estate Management (IREM) to a property manager who has successfully completed required education and experience.

contract services

A property maintenance service that is done by an individual or company not in the employ of the property manager.

FICO score

A proprietary numeric credit score used to evaluate a prospective borrower, developed by Fair, Isaacs, & Co.

federally related transaction

A real estate-related financial transaction that falls under a federal financial institutions regulatory agency and that requires the services of an appraiser.

loan estimate

A required disclosure that shows the amount of cash needed at closing, as well as the annual percentage rate of interest charged on the loan.

community association

A residential homeowners association in which membership is a condition of ownership of a unit in a part of a residential development that is authorized to impose a fee that may become a lien on the parcel.

resident manager

A salaried individual employed for specific management functions for a single investment property.

Designated Sales Associate

A sales associate who is appointed by a broker as a single agent for a buyer or a seller in a nonresidential transaction when another sales associate in the firm has been appointed as the single agent for the other party in the transaction. Both buyer and seller must have assets of at least $1 million and agree to the arrangement.

Documentary Stamp Taxes

A tax on a real estate transaction that may be levied on the sales price of a property or on the amount of a mortgage note.

Power Prospecting

A type of prospecting that seeks to make contact with many more buyers and sellers and that results in much higher income levels

Aisles and Pathways

Aisles and pathways to services should be at least 36 inches wide. Spaces in auditoriums should be distributed throughout the hall. Tops of tables or counters should be between 28 and 34 inches high.

buyer brokerage agreement

An agreement between a buyer and a broker for the broker to provide services to a buyer for compensation. The broker may be acting as a single agent, a transaction broker, or a nonrepresentative.

option contract

An agreement that allows one party to buy, sell, or lease real property for specified terms within a specified time limit.

innocent purchaser status

An amendment to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) that exempts from liability those landowners who made reasonable inquiries about hazardous substances before purchasing the property.

preclosing walk-through inspection

An inspection of the house by the buyer, done sometime before the sale closes, to determine that the property is in the same condition it was when the contract was signed and to ensure that all required repairs have been completed.

What is FALSE about an unlicensed personal assistant who works for a sales associate? A) The associate may be financially liable for accidents involving the personal assistant. B) Assistants rarely help increase the income of the sales associate enough to cover the assistant's compensation. C) The associate may be responsible for violations of the license law or FREC rules. D) The associate's employing broker may be financially responsible for acts of the personal assistant, as well as for violations of the license law or FREC rules.

B) Assistants rarely help increase the income of the sales associate enough to cover the assistant's compensation.

What is NOT a type of income transaction that can reasonably result from contacting a for rent by owner (FRBO)? A) Management contract B) Sale C) Appraisal D) Listing

C) Appraisal

Which is NOT an important characteristic of a good blog post? A) A "hook" in the title B) Call to action C) Maximum 140 text characters D) Allowing reader comments

C) Maximum 140 text characters

Which is NOT important in comparing properties using the comparable sales approach? A) General condition and appearance B) Date of sale C) Original cost of improvements D) Size of house

C) Original cost of improvements

Which is NOT a condition that a licensee must meet when selecting comparable properties using the comparable sales approach to value? A) Same market area B) Similar C) Same floor plan D) Sold recently

C) Same floor plan

seasonal variations

Changes in the economy (for example, winter tourism in Florida) that recur at regular intervals at least once a year.

collected funds

Checks or wired funds that have become actually and finally collected and deposited into the escrow agent's or the closing agent's account.

5 database categories

Close friends and family Friends Customers Acquaintances Targeted strangers

Operating Expenses (OE)

Costs of operating an income property. Includes property taxes, maintenance, insurance, payrolls, and reserves for replacements.

accessible

Easy to approach, enter, operate, participate in, and use safely and with dignity by a person with a disability.

Which two classes were added to Title VIII of the Civil Rights Act of 1968 by the Fair Housing Amendments Act of 1988?

Handicap and familial status

modification

In the case of a person with disabilities, a modification is a change that the housing provider must allow the tenant to provide at the tenant's expense.

Entrances

Inaccessible entrances should have signs showing the closest accessible entrance. A service entrance should not be used as the accessible entrance unless there are no other options. Entrance doors should have at least 32 inches of clear opening, with at least 18 inches of clear wall space on the pull side of the door. Door handles should be no higher than 48 inches and operable with a closed fist. Doors in public areas should have at least a 32-inch opening.

body language

Nonverbal communication expressed by the position of the body, hands, arms, legs, or facial expressions.

Which is LEAST likely to be one of a sales associate's five-year goals?

Obtaining names of customers who are likely to list their homes

Parking Areas

Parking areas should have one accessible space for every 25 total spaces. The accessible parking space should be 8 feet wide for a car, with a 5-foot access aisle. At least one space must be van accessible (8 feet wide with an 8-foot access aisle, and at least 98 inches of vertical clearance). The accessible spaces should be the closest available to the accessible entrance.

Access to buildings

People with disabilities should be able to approach a building and enter as freely as everyone else. Curbs at the entrance should have curb cuts. The route of travel should be at least 36 inches wide, stable, and slip-resistant. An object must be within 27 inches of the ground in order to be detected by a person using a cane. Overhead objects must be higher than 80 inches for head room.

Brokerage relationship disclosures

Required Buyer or Seller Disclosure: Entering into a representation agreement or showing a property Buyer or seller Review this unit for detailed disclosure requirements

Restrooms

Restrooms should be accessible to people with disabilities. If a restroom is inaccessible, there should be a sign giving directions to an accessible restroom. A wheelchair-accessible stall that is at least 5 feet square is necessary to make turns. Grab bars should be behind and on the side wall nearest the toilet. At least one lavatory should have a 30-inch-wide-by-48-inch-deep clear space in front. The bottom of the lavatory should be no lower than 29 inches; the rim should be no higher than 34 inches. The faucets should be operable with one closed fist. The ADA also requires that state and local governments provide access to programs offered to the public. The ADA also covers effective communication with people with disabilities and eligibility criteria that may restrict or prevent access, and the ADA requires reasonable modifications of policies and practices that may be discriminatory. Visit the U.S. Department of Justice's website at www.justice.gov. The Americans with Disabilities (ADA) web page is at www.ada.gov.

static risk

Risk that is quantifiable and insurable. For example, the risk of fire is a static risk. Fire insurance will transfer the risk from the owner to the insurance company.

The most important sources of listings for a new sales associate (see The Listing Star) are these:

Sphere of influence Expired listing Farm For sale by owners (FSBOs) and for rent by owners (FRBOs) Canvass

T or F: Asking sellers to help you with measuring the house is a way to build rapport.

TRUE

T or F: MOST licensees use a comparative market analysis (CMA) to arrive at an opinion of a property's value.

TRUE

Service the listing

The actions of a licensee who stays in touch with a seller regularly, getting feedback from licensees who have shown the property, sending the seller copies of advertisements, and generally keeping the seller informed of the marketing efforts.

Which illegal statement would MOST likely be termed steering?

The answer is "are you certain you'll be comfortable in this predominantly white neighborhood?" Under the Fair Housing Act, asking whether a member of a protected class would be comfortable in a predominantly white neighborhood is illegal steering.

A man has a capital gain of $197,000 on the sale of his home, which he owned for three years. The sales price was $425,000. Sales costs were $7,000, qualified fix-up costs were $1,000, and moving costs were $2,000. What are the capital gains taxes on this sale if his normal tax rate is 25%?

The answer is $0. A homeowner can exclude up to $250,000 gain on the sale of a personal residence. Henry had a gain of $197,000, all of which is excluded from taxation.

What monetary amount does a buyer need in order to work with a designated sales associate?

The answer is $1 million in assets. Both the buyer and the seller must have $1 million in assets for this brokerage relationship.

What are the documentary stamp taxes on the deed if the sale price of a property is $214,500?

The answer is $1,501.50. Divide $214,500 by 100 = 2,145 × .70 = $1,501.50.

A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance $ 780.00 Termite inspection and treatment 300.00 Sales price 127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed ? Property taxes for the year 1,745.60 Interest proration (paid in arrears) ? Closing date June 30 What are the total prorations, rounded to the nearest $100? Will the prorations be added or subtracted from the equity?

The answer is $1,700 subtracted. Property taxes for the year are $1,745.60. One-half year's taxes charged to the seller are $872.80 ($1,745.60 ÷ 2). Interest on mortgage = $98,601.60 × .10 = $9,860.16 per year; $9,860.16 ÷ 12 months = $821.68. $872.80 + $821.68 = $1,694.48 total prorations charged to seller; round to $1,700.

A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance $ 780.00 Termite inspection and treatment 300.00 Sales price 127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed ? Property taxes for the year 1,745.60 Interest proration (paid in arrears) ? Closing date June 30 What are the total expenses, rounded to the next highest $100?

The answer is $10,900. $8,925.00 ($127,500 × .07) brokerage fee + $780 title insurance + $300 termite inspection + $892.50 documentary stamps ($127,500 ÷ 100 × .70) = $10,897.50 total; round to $10,900.

You are estimating the value of a vacant lot zoned for single-family residence use. One year ago, a comparable lot sold for $125,000. Your analysis of market conditions and property characteristics produced the following needed adjustments: subject lot, $2,000 inferior; subject site location, $3,000 superior. These adjustments result in an estimated market value for the subject lot of

The answer is $126,000. $125,000 sales price - $2,000 superior to subject + $3,000 location inferior to subject = $126,000 estimated market value.

A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance $ 780.00 Termite inspection and treatment 300.00 Sales price 127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed ? Property taxes for the year 1,745.60 Interest proration (paid in arrears) ? Closing date June 30 What are the seller's net proceeds, rounded to the nearest $100?

The answer is $16,300. $28,900 seller's equity - $10,900 expenses - $1,700 prorations = $16,300 seller's net proceeds.

The maximum fine for each violation against a Florida mortgage loan originator or mortgage broker under Chapter 494 is

The answer is $25,000. The maximum fine for violations of Florida's mortgage broker laws is $25,000.

A broker is compiling a seller's net proceeds form for a seller. The figures she gathers are as follows: Brokerage fee 7% Title insurance $ 780.00 Termite inspection and treatment 300.00 Sales price 127,500.00 Existing first mortgage @ 10% 98,601.60 Documentary stamps on deed ? Property taxes for the year 1,745.60 Interest proration (paid in arrears) ? Closing date June 30 What is the seller's equity, rounded to the nearest $100?

The answer is $28,900. The seller's equity is calculated by deducting the mortgages from the sales price. $127,500.00 sales price - $98,601.60 mortgage balance = $28,898.40 seller's equity; round to $28,900.

The annual potential gross income for an apartment property is $291,000, other income is $480 per month, and vacancy and collection losses are 5%. What is the property's effective gross income?

The answer is $282,210. $291,000 potential gross income - $14,550 (5% × $291,000) vacancy + $5,760 ($480 × 12) other income = $282,210.

Susan lists her home with broker William for $90,000 on March 16. On August 1, Henry makes an offer of $85,000, accompanied by a binder deposit of $5,000, and asks the seller to pay points on a new loan of $80,000. Susan counters at a price of $87,500 and agrees to pay four points on a loan of $82,500. Henry accepts. Henry qualifies for the loan at an interest rate of 9% and agrees to pay a 1% origination fee. The monthly payment for principal and interest is $663.81. Henry also will be charged for prepaid interest for the balance of the month of closing. The closing date is September 15, and Henry is charged for the day of closing. Henry will purchase an insurance policy for $720. City and county taxes are $760. Susan agreed to pay her own attorney's fees of $125. Henry must pay $130 for attorney's fees, $56 to record the mortgage, $6 to record the deed, and $640 for title insurance. The payoff on Susan's existing mortgage will be $64,455.16 on the day of closing. Broker William's fee is 6%. Doc stamps and intangible taxes are paid according to custom. Use the 365-day method for prorations. What is the amount of documentary stamp taxes on the note?

The answer is $288.75. Divide the note amount by 100, then round up. Multiply that by .35. $82,500 ÷ 100 = 825 × .35 = $288.75.

A sales associate is preparing a CMA for property located in Arbor Hills. She finds three homes that sold recently: a four-bedroom home with a pool that sold for $190,000; a three-bedroom home with no pool that sold for $181,000; and a three-bedroom home with a pool that sold for $185,000. Based solely on this information, what does a swimming pool contribute to value in Arbor Hills?

The answer is $4,000. Compare the houses that are similar except for the pool. The two three-bedroom homes' only difference is the pool, and the price difference is $4,000 ($185,000 - $181,000). That can be attributed to the contribution value of a pool.

After completing a review of the CMA, a sales associate and a seller agree on a list price of $240,000. Seller's expenses, including brokerage fee, are estimated at $17,600, and prorations for taxes and interest paid in arrears are estimated at $6,700. The mortgage payoff is expected to be $196,500. What is the seller's equity?

The answer is $43,500. The seller's equity is $43,500 (price - mortgages; $240,000 - $196,500).

A sales associate works an average of nine hours each day. Last year, he worked for 260 days and made gross income of $102,000. What was his hourly rate?

The answer is $43.59. The associate's hourly rate is $43.59 (9 hours × 260 days = 2,340 total hours. $102,000 ÷ 2,340 hours = $43.59).

A sales associate needs to earn $40,000. If expenses such as Social Security, Medicare, and operating expenses average 35% of gross income, what should the sales associate's goal be for gross income?

The answer is $61,538. The $40,000 required income is equal to 65% (100% - 35%) of the gross income. Divide $40,000 by .65 to find the necessary gross income.

Susan lists her home with broker William for $90,000 on March 16. On August 1, Henry makes an offer of $85,000, accompanied by a binder deposit of $5,000, and asks the seller to pay points on a new loan of $80,000. Susan counters at a price of $87,500 and agrees to pay four points on a loan of $82,500. Henry accepts. Henry qualifies for the loan at an interest rate of 9% and agrees to pay a 1% origination fee. The monthly payment for principal and interest is $663.81. Henry also will be charged for prepaid interest for the balance of the month of closing. The closing date is September 15, and Henry is charged for the day of closing. Henry will purchase an insurance policy for $720. City and county taxes are $760. Susan agreed to pay her own attorney's fees of $125. Henry must pay $130 for attorney's fees, $56 to record the mortgage, $6 to record the deed, and $640 for title insurance. The payoff on Susan's existing mortgage will be $64,455.16 on the day of closing. Broker William's fee is 6%. Doc stamps and intangible taxes are paid according to custom. Use the 365-day method for prorations. If the lender wants a three-month tax escrow plus the number of months through the day of closing, what is the amount of prepaid taxes the lender collects at closing?

The answer is $760.00. The closing month is September (the ninth month). Add three more months and that means the lender wants a full year of taxes. Annual taxes are $760.

In 2012, a man purchased a new home at the FHA appraisal amount of $100,000 and financed it with an FHA mortgage loan. To what amount must he reduce the outstanding loan balance before he no longer has to pay the 0.5% annual mortgage insurance premium?

The answer is $78,000. The borrower must increase the equity to 22%, (by reducing the mortgage to 78%) of the purchase price of the property.

Susan lists her home with broker William for $90,000 on March 16. On August 1, Henry makes an offer of $85,000, accompanied by a binder deposit of $5,000, and asks the seller to pay points on a new loan of $80,000. Susan counters at a price of $87,500 and agrees to pay four points on a loan of $82,500. Henry accepts. Henry qualifies for the loan at an interest rate of 9% and agrees to pay a 1% origination fee. The monthly payment for principal and interest is $663.81. Henry also will be charged for prepaid interest for the balance of the month of closing. The closing date is September 15, and Henry is charged for the day of closing. Henry will purchase an insurance policy for $720. City and county taxes are $760. Susan agreed to pay her own attorney's fees of $125. Henry must pay $130 for attorney's fees, $56 to record the mortgage, $6 to record the deed, and $640 for title insurance. The payoff on Susan's existing mortgage will be $64,455.16 on the day of closing. Broker William's fee is 6%. Doc stamps and intangible taxes are paid according to custom. Use the 365-day method for prorations. Assuming the mortgage insurance premium is $50.18 per month, what is the total monthly payment (PITI) on the mortgage?

The answer is $837.32. Monthly payment is calculated by adding principal and interest (given in the problem), and 1/12 of the taxes, hazard insurance, and PMI. $663.81 principal and interest + $63.33 taxes + $60.00 insurance + $50.18 PMI = $837.32 total.

An apartment property has potential gross income of $155,000, effective gross income of $150,000, operating expenses of $58,000, including reserves for replacement of $2,400, and debt service of $40,800. What is the property's net operating income?

The answer is $92,000. $150,000 effective gross income - $58,000 operating expenses = $92,000 net operating income.

A man is shopping for a new loan and has narrowed the field to two choices. One is a 30-year fixed-rate loan that has principal and interest payments of $940 per month. The other is a biweekly mortgage. What is the difference in the annual payments based on this information?

The answer is $940. The biweekly mortgage takes the normal payment, divides it in half, and requires the borrower to pay every other week (26 times per year). So, $940 ÷ 2 = $470. $470 × 26 = $12,220. The normal loan would have 12 payments at $940 ($11,280). The difference is $940.

What is the maximum amount of a buyer's closing costs that the seller can pay under conventional lending standards when the borrower is making a 5% down payment?

The answer is 3% of the purchase price. When the borrower is making less than 10% down payment, the seller can pay 3% of the purchase price.

The vertical height for a wheelchair-accessible ramp is 30 inches. How many feet must the ramp be to meet the ADA guidelines?

The answer is 30. For every inch of height, ramps should have at least one foot of length (1:12)—30 inches high, 30 feet long. The ramp must have a railing at least 34 inches high. There must be a 5-foot-long level landing at every 30-foot horizontal length of ramp, and at the top and bottom of the ramp and at switchbacks.

A potential seller has a home worth $240,000 with a mortgage balance of approximately $199,000. The sales associate assures him that a 6% commission should be acceptable. The commission as a percentage of the seller's equity is

The answer is 35. The commission is 35% of the seller's equity. His equity is $41,000 ($240,000 value - $199,000 mortgage). The commission would be $14,400 ($240,000 × .06). Dividing the commission by the equity ($14,400 ÷ $41,000) equals .35.

A buyer expects to live in his new home for about five years. He is shopping for a new $100,000 mortgage. With no points, he can get a 30-year 8% fixed-rate mortgage with principal and interest payments of $733.76. Another lender has a 7.75% mortgage (payments of $716.41) with one point. How many months will it take the buyer to break even on the points if he takes the lower interest loan, using simple arithmetic?

The answer is 57.6. Calculate how much in dollars will be paid in points. Then, divide the amount of points paid by the difference in monthly payments. That will give the breakeven number of months. $100,000 × .01 = $1,000 paid in points. $733.76 - $716.41 = $17.35 difference in payments. $1,000 ÷ $17.35 = 57.6 months.

On January 10, the one-year Treasury bill index was 4%. A mortgage company used that index to write a new one-year adjustable-rate with a 2.5% margin. What is the calculated interest rate?

The answer is 6.5%. The calculated rate is determined by adding the margin to the index. The margin is 2.5% and the index is 4%. 4% + 2.5% = 6.5%.

A woman is shopping for a new $150,000 mortgage. She expects to live in her new home for about four years. She can get a 30-year, 4.75% fixed-rate mortgage with principal and interest payments of $1,074.62 with no points. She can also get a 4.25% mortgage loan (payments of $1,023.26) with three points. How many months will it take the woman to break even on the points if she takes the lower interest rate loan, using simple arithmetic?

The answer is 87.6. Divide the amount paid in points by the difference in payments. That will give the payback period. $150,000 × .03 = $4,500 in points paid. $4,500 ÷ ($1,074.62 - $1,023.26) = 87.6 months payback.

A title policy offering coverage over and above the standard coverage is which type of policy?

The answer is ALTA. The American Land Title Association insurance has many more areas of coverage than a standard policy.

Which advertising term would be a violation of fair housing laws? A)Third-floor walkup B)Cool bachelor apartment C)Apartment for sober person D)English-speaking tenant wanted

The answer is English-speaking tenant wanted. This would be discrimination because of national origin. Brokers may not discriminate in the terms, conditions, or privileges of the sale or rental of a dwelling, or in the provision of services or facilities in connection with sales or rentals, because of race, color, religion, sex, handicap, familial status, or national origin.

Which federal law requires fair consideration of loan applications from women, minority races, part-time employees, and others who may have been discriminated against in the past?

The answer is Equal Credit Opportunity Act. Lenders may not discriminate against consumer mortgage loan applicants based on race, color, national origin, religion, sex, age, or marital status.

The MOST common credit scoring used by lenders today was developed by

The answer is Fair, Isaac & Co. Fair, Isaac & Company developed the credit scoring concept.

Under which contract does the seller warrant appliances to be in working order?

The answer is Florida Realtors®. The Florida Realtors® contract requires that appliances be in working order on the day of closing.

Susan lists her home with broker William for $90,000 on March 16. On August 1, Henry makes an offer of $85,000, accompanied by a binder deposit of $5,000, and asks the seller to pay points on a new loan of $80,000. Susan counters at a price of $87,500 and agrees to pay four points on a loan of $82,500. Henry accepts. Henry qualifies for the loan at an interest rate of 9% and agrees to pay a 1% origination fee. The monthly payment for principal and interest is $663.81. Henry also will be charged for prepaid interest for the balance of the month of closing. The closing date is September 15, and Henry is charged for the day of closing. Henry will purchase an insurance policy for $720. City and county taxes are $760. Susan agreed to pay her own attorney's fees of $125. Henry must pay $130 for attorney's fees, $56 to record the mortgage, $6 to record the deed, and $640 for title insurance. The payoff on Susan's existing mortgage will be $64,455.16 on the day of closing. Broker William's fee is 6%. Doc stamps and intangible taxes are paid according to custom. Use the 365-day method for prorations. Using the 365-day method and the exact number of days in the month, how will prepaid interest be handled on the closing statement?

The answer is Henry must pay $325.48 in prepaid interest at closing. Multiply the mortgage amount by the interest rate to get annual interest, then divide by 365 to get the daily interest. Multiply the number of days remaining in the month of closing by the daily rate. $82,500 × .09 = $7,425. $7,425 ÷ 365 days = $20.3425 per day. $20.3425 × 16 days = $325.48. Buyer pays for interest.

What is the index measuring the base interest rate paid on deposits between banks in the Eurodollar market that is used in many adjustable-rate mortgages?

The answer is LIBOR. The LIBOR (London Interbank Offered Rate) is the base interest rate paid on deposits between banks in the Eurodollar market.

How does the appraisal cost usually appear in the Closing Disclosure when a new institutional mortgage has been used for the purchase?

The answer is POC. Most lenders request, at the time of application, a fee that includes amounts sufficient for a credit report and appraisal fee. It is shown on the Closing Disclosure as paid outside closing (POC).

Shady Acres neighborhood has had 103 homes sold last year out of 560 homes in the area. Sunny Hills neighborhood has had 87 homes sold with 400 total homes. Windy Woods neighborhood has had 150 homes sold with 800 total homes. Still Waters neighborhood has had 145 homes sold with 625 total homes. All are in the same general price range in well-kept areas of the city. Which neighborhood would be the best farm area based on likely reward-to-effort ratios?

The answer is Still Waters. For each of the neighborhoods, the sales associate should determine the turnover index. That's done by dividing the number of sales per year by the total number of homes in the neighborhood. Still Waters has a turnover ratio of 23.2 (145 sales ÷ 625 total homes), the highest of the four neighborhoods analyzed.

A commercial broker allows one sales associate to act as a single agent for the buyer and another sales associate to act as a single agent for the seller. Both the buyer and the seller have assets of more than $1 million, and each agrees to this form of representation. The situation describes

The answer is a designated sales associate. The situation describes a designated sales associate relationship. Florida law allows a brokerage firm to designate one sales associate in the firm to act as agent for the buyer (or lessee) and another sales associate in the firm to act as the agent for the seller (or lessor). This status may be used only in a nonresidential transaction. In this status, each designated sales associate is an advocate for the party she represents in the transaction and can actively help in the negotiations. To meet the requirements of the law, buyers and sellers must have personal assets of at least $1 million, sign disclosures that their assets meet the requirement, and request this representation status. The licensees must give the parties a single agent notice and a designated sales associate notice.

When preparing the interest proration on a seller's net proceeds form, the BEST policy is to enter

The answer is a full month of interest. Because the exact closing date is not known when the licensee is taking the listing, it is more conservative to prorate the interest for a full month.

An agreement between a seller of real property and a real estate broker that authorizes the broker to sell the property on specified terms in return for a sales commission if the broker is successful is

The answer is a listing contract. The listing contract specifies the duties of both the broker and the owner in the sale of the owner's real property.

A comparable property sold two months ago for $138,000. It has four bedrooms (the subject property has three) and is 160 square feet larger as a result. An analysis shows that the additional room/space makes an $8,000 difference. The subject is newer and in slightly better condition, so you estimate a difference of $5,000. Due to the difference in square footage and bedrooms, you make

The answer is a minus $8,000 adjustment to the comparable. The comparable is larger, so the adjustment would be minus $8,000 to the sales price of the comparable.

When a licensee verifies contract information, one of the preferred sources regarding the name of the owner-seller and the legal description is

The answer is a previous title insurance policy. Because MLS, the listing agreement, or appraisal reports are sometimes incomplete or incorrect, the best source among those shown is the title policy.

A bilateral agreement spelling out the complete terms between a buyer and a seller for the transfer of a parcel of real property is

The answer is a sales contract. A bilateral agreement spelling out the complete terms between a buyer and a seller for the transfer of a parcel of real property is a sales contract.

What would NOT be given to the title-closing agent when the order is given?

The answer is a signed and dated listing agreement. The closing agent does not need the listing agreement but must have the marital status of the parties, the legal description, and a property address.

Before showing homes to a customer she has just met, a single agent broker must give the customer

The answer is a single agent notice. A single agent broker is required to give a customer the single agent notice before showing the customer homes.

The components that together make a title report complete are a physical inspection of the collateral property, a search of the public records, and

The answer is a survey of the property. The components that together make a title report complete are a physical inspection of the collateral property, a search of the public records, and a survey of the property.

What is the classic test of the sufficiency of a legal description?

The answer is a surveyor can locate the property by reference to the description. The classic test of the sufficiency of a legal description is whether it can be surveyed.

A broker who works with a seller is legally presumed to be

The answer is a transaction broker. Florida law presumes that a licensee is a transaction broker unless the licensee enters into another brokerage relationship with the customer.

A broker entered into an agreement with a prospective buyer, using the Florida Realtors® Exclusive Buyer Brokerage Agreement. The broker showed the buyer a property, but the buyer said he really didn't care for it. After their agreement expired, the buyer signed a similar agreement with a second broker. About one month later, the second broker showed the buyer the same property and the buyer bought it. Which is TRUE?

The answer is according to the terms of the contract, the second broker is entitled to the commission as the procuring cause of the sale. The "Protection Period" section (paragraph 8) of the FAR Exclusive Buyer Brokerage Agreement states that the buyer's obligation to pay the broker's fee ceases when the buyer enters into a good-faith exclusive buyer brokerage agreement with another broker after the termination date of the original contract.

A comparative market analysis (CMA) with adjustments assumes that

The answer is adjustments for differences have been made to the comparable property. A CMA assumes that any adjustments for differences have been made to the sales prices of the comparable properties.

If you have an offer to present to a seller and you are not the listing sales associate, you should

The answer is after making sure the sellers have no further questions for you, excuse yourself after making the presentation. After presenting an offer to the seller, it is best to excuse yourself (after ensuring that the seller has no questions for you) so the seller and the listing sales associate can discuss the offer privately.

A prospective tenant asks a landlord to provide a reserved handicapped-accessible parking space at the entrance to the apartment building. This is a request for

The answer is an accommodation. An accommodation is a change that the housing provider must provide. An example would be a tenant's request for a handicapped-accessible parking space close to the tenant's unit.

Which is FALSE about fair housing?

The answer is an apartment building owner may assign families with children to one particular building if older people live in the other buildings. It would be illegal for the owner of an apartment building to assign families with children (a protected class under the Fair Housing Act) to different areas of the apartment community.

An appraisal of real property is

The answer is an estimate of its value. Because it is an estimate, it is not a precise or accurate "determination" of value.

A real estate contract given to one broker as sole agent for the sale of an owner's property, with a commission going to that broker regardless of who actually sells the property during the contract period, is

The answer is an exclusive right-to-sell listing. The exclusive right-of-sale listing is the most advantageous listing from the broker's viewpoint and the most common type of listing. The listing is given to a selected broker, who then becomes the exclusive broker for the sale of the property. The broker is due a commission regardless of who sells the property. That is, if the owner sells the property during the contract period, the broker still earns a commission. Also, if the owner sells the property within a designated time after the listing contract has expired to a buyer originally introduced to the property by the broker, the owner usually is liable for a sales commission to the broker.

The monthly report of housing starts is

The answer is an extremely important economic indicator. Housing starts are among the first indicators to rise in a recovery and to fall in a contraction.

An agreement to hold open for a set time period an offer to sell or lease real property is

The answer is an option contract. An option contract is a contract between a property owner (optionor) and another (optionee) in which the optionee, for a consideration, has the right (not the obligation) to purchase or lease the property at a specified price during a designated period. To be enforceable in Florida, an option must contain all the essential elements of a contract.

Which person or entity is covered by the Fair Housing Act?

The answer is an owner of five single-family houses. The law applies to persons who own four or more homes, multifamily properties (except properties with fewer than four units, one of which is occupied by the owner), brokers and sales associates who sell two or more homes in a year, and transactions in which a broker is involved. It does not apply to religious organizations or private clubs.

The Fair Housing Act applies to

The answer is an owner who lists his personal house (his only real property) with a broker. A private owner is covered by the Fair Housing Act if the house is listed by a broker.

Two problems faced by a licensee who has taken an exclusive agency listing result from

The answer is an owner's sign on the property and the owner advertising a different price. A sign on the property tempts a buyer to go around the broker who showed the house. Advertising a different price may embarrass the broker if the buyer has questions about the two different prices.

When selling his property, a sales associate failed to disclose the fact that a person died in the home last year. The sales associate

The answer is and his broker can have the court dismiss the suit. Under Florida law, homicide, suicide, or death in a property is not a material fact that must be disclosed to buyers of residential properties; the court will dismiss the suit.

Qualifying the buyer has to do with income and assets. Qualifying the property has to do with the

The answer is appraisal, survey, and title report. The lender has to ensure that the property has value, that there are not encroachments, and that the borrower has clear title.

Disclosure of the annual percentage rate of interest need NOT

The answer is be given to a prospective buyer of a single-family home who is paying all cash. The Truth in Lending Act requires disclosure of the APR, but if the buyer is paying all cash, there is no loan to make disclosure of the annual percentage rate.

When presenting an offer, a sales associate is in a better position to get an acceptance when the buyer has

The answer is been preapproved by a lender. The strongest position for a single agent sales associate to have when presenting an offer to the sellers is a buyer who has been preapproved by a lender.

Direct mail is NOT usually a good idea for prospecting expired listings because

The answer is by the time it gets there, a motivated seller has already listed. Because expired listings are usually listed again very quickly with the previous broker or another broker, direct mail usually is too slow to be effective.

To obtain the best and MOST reliable information about rental rates in a neighborhood, the investor should check

The answer is competing properties. This is called shopping the competition.

When the parties involved in a HUD complaint come together to attempt to resolve the issues, it is called

The answer is conciliation. The Fair Housing Act requires HUD to bring the parties together to attempt to resolve every fair housing complaint. The choice to conciliate the complaint is voluntary on the part of both parties.

If a buyer raises an objection to a property, the associate should first

The answer is confirm and isolate the objection. Before answering an objection, an associate should first confirm ("are you saying that . . .") and isolate ("if it weren't for this objection, would you be ready to go ahead with the purchase?").

A mansion in a neighborhood of smaller, average homes would violate the principle of

The answer is conformity. Because of the lack of conformity, the mansion would suffer from regression in price.

To ensure maximum future value of the properties, subdivision restrictions rely on the principle of

The answer is conformity. In neighborhoods of single-family houses, buildings normally should follow the principle of conformity; that is, they should be similar in design, construction, and age to other buildings in the neighborhood to realize their maximum value. An elaborate mansion on a large lot with a spacious lawn is worth more in a neighborhood of similar homes than it would be in a neighborhood of more modest homes on smaller lots. Subdivision restrictive covenants are designed to promote the principle of conformity to maintain and enhance values.

In a neighborhood of three-bedroom, two-bath homes, an owner added a second bathroom at a cost of $1,600. An appraiser adjusted the value of the home upward by $2,000 due to the improvement. This is an example of the principle of

The answer is contribution. The appraiser is not concerned with what the improvement cost. The more important consideration is what a buyer likely would pay for the extra improvement.

A woman is searching for a new apartment. When she drives up to a particular apartment complex, she gets a wonderful impression and decides to rent if the price is right. The woman's first impression is called

The answer is curb appeal. Curb appeal is very important in marketing property.

Wavelike movements of increasing and decreasing economic prosperity in the general economy usually are called

The answer is cyclic fluctuations. A cycle consists of four phases: expansion, recession, contraction, and recovery.

Susan lists her home with broker William for $90,000 on March 16. On August 1, Henry makes an offer of $85,000, accompanied by a binder deposit of $5,000, and asks the seller to pay points on a new loan of $80,000. Susan counters at a price of $87,500 and agrees to pay four points on a loan of $82,500. Henry accepts. Henry qualifies for the loan at an interest rate of 9% and agrees to pay a 1% origination fee. The monthly payment for principal and interest is $663.81. Henry also will be charged for prepaid interest for the balance of the month of closing. The closing date is September 15, and Henry is charged for the day of closing. Henry will purchase an insurance policy for $720. City and county taxes are $760. Susan agreed to pay her own attorney's fees of $125. Henry must pay $130 for attorney's fees, $56 to record the mortgage, $6 to record the deed, and $640 for title insurance. The payoff on Susan's existing mortgage will be $64,455.16 on the day of closing. Broker William's fee is 6%. Doc stamps and intangible taxes are paid according to custom. Use the 365-day method for prorations. How are the documentary stamp taxes on the deed handled on the closing statement?

The answer is debit Susan $612.50. The seller pays for documentary stamp taxes on the deed. Divide the sales price by 100, then round to the next highest 100. Multiply that by $.70. $87,500 ÷ 100 = 875 × $.70 = $612.50.

Susan lists her home with broker William for $90,000 on March 16. On August 1, Henry makes an offer of $85,000, accompanied by a binder deposit of $5,000, and asks the seller to pay points on a new loan of $80,000. Susan counters at a price of $87,500 and agrees to pay four points on a loan of $82,500. Henry accepts. Henry qualifies for the loan at an interest rate of 9% and agrees to pay a 1% origination fee. The monthly payment for principal and interest is $663.81. Henry also will be charged for prepaid interest for the balance of the month of closing. The closing date is September 15, and Henry is charged for the day of closing. Henry will purchase an insurance policy for $720. City and county taxes are $760. Susan agreed to pay her own attorney's fees of $125. Henry must pay $130 for attorney's fees, $56 to record the mortgage, $6 to record the deed, and $640 for title insurance. The payoff on Susan's existing mortgage will be $64,455.16 on the day of closing. Broker William's fee is 6%. Doc stamps and intangible taxes are paid according to custom. Use the 365-day method for prorations. How are the points to be handled on the closing statement?

The answer is debit Susan. $3,300. Each point is 1% of the mortgage amount. The mortgage amount is $82,500, and there are four points (4%) charged. $82,500 × .04 = $3,300. This would be a debit to the seller who has agreed to pay the points.

Susan lists her home with broker William for $90,000 on March 16. On August 1, Henry makes an offer of $85,000, accompanied by a binder deposit of $5,000, and asks the seller to pay points on a new loan of $80,000. Susan counters at a price of $87,500 and agrees to pay four points on a loan of $82,500. Henry accepts. Henry qualifies for the loan at an interest rate of 9% and agrees to pay a 1% origination fee. The monthly payment for principal and interest is $663.81. Henry also will be charged for prepaid interest for the balance of the month of closing. The closing date is September 15, and Henry is charged for the day of closing. Henry will purchase an insurance policy for $720. City and county taxes are $760. Susan agreed to pay her own attorney's fees of $125. Henry must pay $130 for attorney's fees, $56 to record the mortgage, $6 to record the deed, and $640 for title insurance. The payoff on Susan's existing mortgage will be $64,455.16 on the day of closing. Broker William's fee is 6%. Doc stamps and intangible taxes are paid according to custom. Use the 365-day method for prorations. What is the proration of taxes between the seller and the buyer?

The answer is debit Susan; credit Henry $535.12. The daily rate for property taxes is $2.0822 ($760 ÷ 365). The seller has occupied the property for 257 days. 257 × 2.0822 = $535.12.

Maintenance on a building that cannot or will not be performed when necessary is which type of maintenance?

The answer is deferred. Deferred maintenance results in physical deterioration, unhappy tenants, and reduced rents.

Two sales associates work for a commercial broker. The broker allows one sales associate to act as a single agent for the buyer and the other sales associate to act as a single agent for the seller. Both the buyer and the seller have assets of more than $1 million, and each agrees to this form of representation. The situation describes a

The answer is designated sales associate. In this form of representation, a broker appoints one licensee to work for the buyer and one licensee to work for the seller. Both the buyer and the seller must have assets of at least $1 million and request this form of representation.

A broker was a transaction broker in the sale and purchase of an office building. The broker felt an obligation to tell the buyer about the seller's need to sell quickly. As a balance, the broker helped the seller get a better price from the buyer because of some comments the buyer made during the property inspection. What is correct?

The answer is disclosure of such information violates Chapter 475. The broker violated Florida law. One of the duties of a transaction broker is limited confidentiality, unless waived in writing by a party. The transaction broker may not reveal to either party the following information: that the seller might accept a price less than the asking or list price; that the buyer might pay a price greater than the price submitted in a written offer; or the motivation of any party for selling or buying property.

An example of steering is

The answer is discouraging the purchase or rental of a dwelling by exaggerating drawbacks or failing to inform the person of desirable features of a dwelling. This is an example of steering.

The BEST way for a buyer to determine that the seller has moved out and the property is ready for occupancy is by

The answer is doing a preclosing walk-through inspection. This is usually done the night before closing or early the morning of closing.

MOST brokers recommend showing the best house

The answer is early in the tour. This sets a standard against which all other homes are measured. It usually makes the tour faster because the buyer can decide quickly that the home shown earlier was more to his liking.

A sales associate is preparing a CMA. If he wants to find comparable sales of properties sold directly by owners, he should look in

The answer is either the clerk's office or the tax appraiser's office. The clerk's office will show all deed transfers. The tax appraiser's office will also show the information, but may be easier to locate, because the information is easily accessed by legal description or address.

Which is NOT a category of property maintenance?

The answer is elective. The four types of property maintenance are preventive, corrective, routine, and new construction. Elective is not a category of maintenance.

Sensitivity to the thoughts and feelings of others is

The answer is empathy. Sensitivity to the thoughts and feelings of others is empathy.

Which term is found in the Junk Fax Protection Act?

The answer is established business relationship. The law requires the person who sends a fax to (1) have an "established business relationship" with the recipient or written consent from the recipient; (2) have voluntarily received the recipient's fax number; (3) provide the recipient the right to opt out of getting more faxes; and (4) remove the numbers of persons who opt out within 30 days.

Targeted strangers in your database should be contacted at LEAST

The answer is every other month. Targeted strangers should be contacted at least every other month (six times a year).

When calculating a property's net operating income, such items as depreciation, income taxes, and property financing costs are

The answer is excluded from consideration. Financing costs are shown after NOI has been calculated. Depreciation is calculated only to determine income taxes. Income taxes are accounted for after NOI has been calculated and are not used in the calculation.

A person wishing to avoid liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, claiming innocent purchaser status, must

The answer is exercise due diligence by investigating the property, usually in the form of an environmental audit. A person who wishes to avoid liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, should exercise due diligence by investigating the property, usually in the form of a Phase I environmental audit.

When making an appointment with a seller to show her property, a sales associate should NOT

The answer is fail to call if it looks like the visit will be much later than the time specified. Setting the time as a range is safer and takes into account traffic problems, seeing other properties, et cetera. Asking the seller to turn on the lights makes the house immediately available for inspection, and the buyer doesn't walk into dark rooms. Asking the seller to leave the house gives the buyer an opportunity to look without imposing.

Which is NOT allowed under the CAN-SPAM Act?

The answer is failing to include an opt-out method in commercial advertisements. Persons who send commercial emails must include an opt-out method.

T or F:The documentary stamp taxes on the note for a house that sells for $180,000 with a new mortgage of $144,000 would be $1,008.

The answer is false. $144,000 ÷ $100 = 1,440 increments; 1,440 × $0.35 = $504.

T or F: A licensee who acts as a transaction broker must give a transaction broker notice before showing a house to a prospective buyer.

The answer is false. A licensee need not give a brokerage relationship notice when the licensee is acting as a transaction broker.

T or F: A married couple filing jointly may exclude a maximum of $250,000 of gain on the sale of their personal residence if the taxpayers owned and occupied the residence for at least two of the previous five years.

The answer is false. A married couple filing jointly may exclude a maximum of $500,000 of gain on the sale of their personal residence.

T or F: A recap of the Loan Estimate, including the amount due from the buyer at closing, is on page 3 of the Closing Disclosure.

The answer is false. A recap of the loan is shown on Page 1 of the Closing Disclosure.

T or F:When you meet a new qualified prospect, you should make a weekly contact with that person for at least 26 weeks.

The answer is false. A saturation campaign for targeting strangers a licensee meets would require a weekly contact for the first six weeks.

T or F: It is all right to make a listing presentation when one of the parties who needs to sign the listing is not present.

The answer is false. All the parties who need to sign your listing should be available.

T or F: Buying hazard insurance protects against dynamic risk.

The answer is false. Buying hazard insurance protects against static risk. Static risk is risk that can be insured. Examples include fire, windstorm, accident liability, floods, appliance contracts, and worker's compensation.

T or F: Buyers who call for information based on a For Sale sign generally ask for the address of the property.

The answer is false. Callers on signs generally want the prices because they already know the locations.

T or F: The closing costs are first shown on page 1 of the Closing Disclosure.

The answer is false. Closing costs are shown on Page 2 of the Closing Disclosure.

T or F: Licensees may act as designated sales associates in a residential transaction.

The answer is false. Designated sales associate status may be used only in a nonresidential transaction.

T or F: Determining a buyer's urgency level is part of financial qualification.

The answer is false. Determining a buyer's urgency level is part of qualifying the buyer's housing objectives.

T or F: The BEST place to locate expired listings is from classified advertising.

The answer is false. Expired listings are found by reviewing the data from an MLS system

T or F: The maximum seller-paid closing costs on a new FHA loan for a house being purchased for $200,000 is $6,000.

The answer is false. FHA allows the seller to pay up to 6% of the purchase price of the home, so the seller can pay up to $12,000 ($200,000 × .06).

The maximum seller-paid closing costs on a new FHA loan for a house being purchased for $200,000 is $6,000.

The answer is false. FHA allows the seller to pay up to 6% of the purchase price of the home, so the seller can pay up to $12,000 ($200,000 × .06).

T or F: The MOST popular of all social media sites is Twitter.

The answer is false. Facebook is by far the most popular of all social media sites with more than 1.7 billion users as of June 2016.

T or F:In striving for success as a real estate sales associate, it is NOT essential to schedule time for family, recreation, exercise, and relaxation.

The answer is false. Failing to set aside time for these activities can result in guilty feelings, discontent, poor health, or burnout.

T or F: The answer is false. Florida has more mortgage fraud cases than any other state.

The answer is false. Florida has more mortgage fraud cases than any other state.

T or F:The Florida Fair Housing Act has more protected classes of persons than the federal statute, including age and sexual orientation.

The answer is false. Florida's act is modeled after the federal Fair Housing Act and carries the same prohibitions against discrimination based on race, color, religion, sex, national origin, familial status, or handicap.

T or F:Goal-setting should begin with a short-term view: the accomplishments the sales associate aspires to achieve within the next few months.

The answer is false. Goal-setting should begin with a long-term view. Sales associates should first determine the accomplishments they hope to achieve over the course of their lifetime. The next step is to work back to the present, using small increments in time, determining what needs to be done this month, this week, and today in order to ultimately accomplish the long-term goals.

T or F: Housing starts are the last to rise in an economic recovery and the last to drop in a recession.

The answer is false. Housing starts, along with auto sales, are the first to rise in an economic recovery and the first to drop in a recession.

T or F:Nonresidential buyers and sellers must have personal assets of $100,000 before a broker may appoint designated sales associates in a transaction.

The answer is false. In order for a broker to appoint designated sales associates in a nonresidential transaction, buyers and sellers must have personal assets of at least $1 million.

T or F: Licensees working with no brokerage relationship to the customer owe the customer the duty of confidentiality.

The answer is false. Licensees working with no brokerage relationship owe only three duties to the customer: dealing honestly and fairly, disclosing all known facts that materially affect the value of the residential real property that are not readily observable to the buyer, and accounting for all funds entrusted to the licensee.

T or F: A transaction broker owes loyalty to her buyer.

The answer is false. Loyalty is a duty of a single agent. A transaction broker provides limited representation to a buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity.

T or F: Market value is the LEAST important value in a real estate transaction.

The answer is false. Market value is the most important value in a real estate transaction, and it is the value sought by appraisers for financing purposes.

T or F: Most of the names in your leads database will be acquaintances.

The answer is false. Most of the names in your leads database will be targeted strangers; people we don't yet know, but who are qualified buyers and sellers.

T or F: Real estate property managers manage four major classifications of real property: residential, commercial, industrial, and office.

The answer is false. Office properties are included in the commercial category. The four major classifications are residential, commercial, industrial, and special purpose.

T or F: A neighborhood market analysis should include a list of major employers in the area.

The answer is false. One would find a list of major employers in the area by reviewing a regional market analysis.

T or F: A seller should be more impressed from a lender's prequalification of a buyer rather than a preapproval.

The answer is false. Preapproval means the buyer has been interviewed and the buyer's credit report has been reviewed and the income verified. Having a lender preapprove the buyer is the best approach and should be used whenever possible, but certainly before the buyer actually contracts for property.

T or F: Commercial properties are the largest source of demand for the services of professional property managers.

The answer is false. Residential real estate is the largest source of demand for the services of professional property managers.

T or F: Reviewing the for-sale-by-owner listings in the classified ads is a good way to find buyers.

The answer is false. Reviewing the for-sale-by-owner listings is a way to find sellers. Some good sources of buyers include: calls resulting from advertising (both print and online), calls resulting from signs, past customers and clients, friends and family, open house visitors, canvassing prospects, buyer seminar attendees, and buyer farms.

T or F:Routine maintenance involves the actual repairs that keep the building's equipment, utilities, and amenities functioning as contracted for by the tenants.

The answer is false. Routine maintenance is the most frequently recurring type of maintenance activity, including care of the common areas and grounds, as well as cleaning and housekeeping. The works should be scheduled and controlled or the costs easily can become excessive.

T or F: Sales associates should NOT recommend good title-closing agents to buyers.

The answer is false. Sales associates should provide a list of several competent title-closing agents who have a reputation for professionally completing the closings on time.

T or F: The Fair Housing Amendments Act of 1988 added a prohibition against discrimination based on age.

The answer is false. The 1988 amendments added handicap and familial status as protected classes, but not age.

T or F: The Property Sale Information Sheet, when completed, shows whether the title insurance has been ordered.

The answer is false. The Sales Information Sheet provides necessary data about the sale, the cooperating agent, the lender, and the title company. It's a "phone directory" for the closing but does not show the work progress.

T or F: License laws are the BEST guides for what is honest and right in real estate practice.

The answer is false. The best guide for what is honest and right in real estate practice is a strong code of ethics.

T or f:If a listed house was the site of a homicide six months earlier, the licensee must disclose the fact to a prospective buyer.

The answer is false. The fact that a property was, or was at any time suspected to have been, the site of a homicide, suicide, or death is not a material fact that must be disclosed in a real estate transaction.

T or F:A sales associate who writes a goal of "make as many sales this month as possible" has met the requirements of goal-setting.

The answer is false. The goal is not measurable. The statement "I will make six sales during April" is clear, measurable, and more likely to accomplish the goal.

A very important source of listings is buyer seminars.

The answer is false. The important sources of new listings are sphere of influence, expired listings, farm, for sale by owners (FSBOs) and for rent by owners (FRBOs), and canvass.

T or F: Newspaper classified advertising is the MOST important advertising medium for renting apartments.

The answer is false. The internet or an apartment guide magazine is far more important today.

T or F:The licensee should go over the sellers' net proceeds form before discussing the CMA.

The answer is false. The licensee should first cover the CMA and get the seller's agreement on a listing price. Only then can a meaningful sellers' net form be prepared.

T or F:When entering the legal description into the listing agreement, it's good practice to take the description directly from the tax appraiser's records.

The answer is false. The listing associate should take the legal description from the public records or from the owner's deed, if available. If it is a metes-and-bounds description, attach it to the listing. A description taken from the tax records or from former listing information is not satisfactory because these sources are not always reliable.

T or F: The maximum fine per violation for a first offense of the Fair Housing Act is $5,000.

The answer is false. The maximum fine per violation for a first offense of the Fair Housing Act is $19,787.

The payment factor for a 30-year mortgage at 4.5% is 5.07 per thousand. The monthly principal and interest for a 30-year loan of $300,000 at 4.5% is $1,125.

The answer is false. The monthly payment of principal and interest is $1,521 ($300,000 ÷ 1,000 = $300; $300 × 5.07 = $1,521).

T or F:The correct order of highlighting a home's features is fact, bridge, picture, benefit.

The answer is false. The most important words in any sales presentation are, in the proper order: fact, bridge, benefit, and picture.

A house was purchased for $200,000 with a $180,000 loan. The private mortgage insurance will terminate automatically when the mortgage amount is $140,400.

The answer is false. The private mortgage insurance will terminate automatically when the mortgage amount is $156,000 ($200,000 × .78).

T or F: A sales associate can assume that the title agent knows what to do in the way of communication and performance in the steps leading to a closing.

The answer is false. The sales associate should communicate her expectations regarding communication and performance to the loan officer and closing agent.

T or F:The MOST successful real estate agents tend to be "hard sell."

The answer is false. The sales associate who provides honesty, service, diligence, and knowledge tends to be more successful than the stereotypical "hard sell" sales associate who "closes" with manipulative techniques.

T or F:The best source of new listings is for rent by owners (FRBOs).

The answer is false. The sphere of influence is the best source of new listings.

T or F: A sales associate should NOT give the sales contract to the buyer until the buyer has found the right house and is ready to buy.

The answer is false. The successful sales associate will prepare the customer for signing the contract long before the right property is found. After qualifying the buyer's needs, the sales associate should give the buyer a copy of the contract for purchase and sale and explain the more important paragraphs to the buyer.

T or F: The three keys to prospecting success are numbers, FSBOs, and farm areas.

The answer is false. The three keys to prospecting success are numbers, consistency, and organization.

T or F: A transaction broker may tell a buyer if he knows that the seller will take less than the asking price.

The answer is false. The transaction broker may not reveal that the seller might accept a price less than the asking or list price.

T or F: If a neighbor promises to reroof your house without pay but fails to do so, you may sue for performance.

The answer is false. There has been no consideration, not even a promise by you to do something, so there is no contract, and you cannot sue.

T or F: If persons in a farm area move once every five years and there are 400 homes in the area, approximately 2,000 houses will be listed this year.

The answer is false. There should be 80 homes listed this year (400 homes ÷ 5 years).

T or F:Unlicensed personal assistants may be classified as independent contractors, as long as they are paid by commission rather than a salary.

The answer is false. Unlicensed personal assistants cannot be paid commissions, and, except in unusual circumstances, cannot be classified as independent contractors.

T or F:It is an easier remedy for victims of discrimination to sue in federal court rather than a state court.

The answer is false. Victims of discrimination usually find it easier to sue in state courts than trying to bring a federal case.

T or F:In order to be considered as a comparable property, the home's floor plan must be the same as the subject property's floor plan.

The answer is false. While the neighborhood, size of the home, and the time of the sale should be similar, the floor plan need not be identical.

Your sphere of influence includes expired listings and owners in your farm area.

The answer is false. Your sphere of influence will include family, friends, past customers, and former co-workers.

Before showing properties to buyers, a sales associate should NOT

The answer is find out what church they would like to live near. The sales associate should make the required disclosures, qualify the buyers, and preview the homes before showing them.

For how many years must a broker retain brokerage relationship disclosures?

The answer is five. The broker must retain required brokerage relationship disclosures for a minimum of five years.

The ideal kitchen service triangle should be

The answer is from 12 to 22 feet. A service triangle measures the distance from the range to the refrigerator to the sink and back to the range. Smaller than 12 feet would be a cramped kitchen (like a boat galley). Larger than 22 feet would require a great deal of walking to get needed items.

A sales associate is preparing a buyer's cost disclosure statement. Because he wants to protect himself from later problems, he should

The answer is get the information from the lender's Loan Estimate. The sales associate should base his estimate on the lender's Loan Estimate.

When presenting an offer, a sales associate should NOT

The answer is give the seller the offer with the original signatures. The licensee should give the seller a copy of the offer, not the original, until the seller is ready to make a counteroffer. This ensures that the seller does not damage the original by making extraneous comments.

A good practice when writing an offer to purchase a house owned separately by one spouse is to

The answer is have both spouses sign the contract. There could be legal issues later on if the parties have recently lived in the house together.

A broker is talking with a man about listing his home. If the man says that he is ready to list but has two people he wants to exclude (not have to pay a commission for) from the listing for three weeks, the broker should

The answer is have the man sign an exclusive right-of-sale listing with an addendum that excludes the two prospective buyers. Doing it this way accomplishes the needs of the seller without requiring the sales associate to return later to have the seller sign another listing.

If a single agent residential seller's broker wishes to provide limited representation to a buyer, what must the broker do?

The answer is have the seller sign the consent to transition to transaction broker notice and give the buyer a transaction broker notice. The broker should have the seller sign a consent to transition to transaction broker notice and give the buyer a transaction broker notice.

A man is trying to close on his new home. The required closing date was August 26. The previous day, a hurricane in the Caribbean caused insurance underwriters to suspend writing new policies. If the man fails to close on the 26th, what effect will this have on his Florida Realtors®®Florida Bar contract?

The answer is he has three days to close after restoration of utilities and insurance coverage becomes available. Under the FAR Residential Sale and Purchase Contract, the buyer has three days to close the transaction after restoration of utilities and insurance coverage becomes available.

The Florida Realtors®/Florida Bar Residential Contract for Sale and Purchase requires that the initial deposit is to be

The answer is held in escrow subject to collection. This means the funds have been fully deposited into the account of the escrow agent.

The MOST profitable legally and physically permitted use of real property is called its

The answer is highest and best use. The most profitable legally and physically permitted use of real property is called its highest and best use.

An investor sells an office property he has owned for three years and has a capital gain of $125,000. His ordinary income tax rate is 28%. His long-term capital gains are taxed at a maximum of 15%. Using just this information, how much will his taxes be for this transaction?

The answer is his taxes will be $18,750. The investor's tax on the gain would be $18,750 ($125,000 × .15).

Under the fair housing laws, it is legal to advertise using

The answer is human models that are representative of majority and minority populations in the area. In the investigation of complaints, HUD will consider, as evidence of compliance, among other things that when photographic ads are used, human models should be representative of the majority and minority populations in the area, including both sexes and children, where appropriate.

A broker manages a single-family home. Harry, a disabled person, wants to rent the property and wants to make alterations, including installing a ramp at the entrance, lowering the kitchen counters, and widening some of the doorways. He agrees to pay for the remodeling and for restoring the premises at the end of the lease term. Which is TRUE?

The answer is if the broker explains that the owners will not allow the alterations, that would violate the law. Not only can housing providers not discriminate against a person with a disability, but they must also make reasonable accommodations to rules, policies, and practices to provide that person with the same enjoyment of a dwelling and to allow the person to make reasonable physical modifications of premises.

A sales associate drafts a six-month option agreement for a buyer on a commercial property. The buyer pays $2,000 option money. The sales associate writes "Terms of owner financing will be negotiated when this option is exercised." When the buyer later exercises the option, the seller wants a higher interest rate and a shorter loan term than the buyer will accept. In this case, which is TRUE?

The answer is if the buyer sues, the court probably will decide that the option contract is not enforceable because it is too vague. The option contract is too vague and will not be enforced by a court. Options should be written with as much care as a contract.

Where the agreement of the parties is contrary to any of the provisions or standards in a preprinted sales contract, it is BEST to

The answer is insert one or more special clauses in an addendum to the contract. Where the agreement of the parties is contrary to any of the provisions or standards in a preprinted sales contract, it is best to insert one or more special clauses in an addendum to the contract.

On the seller's net proceeds form, which proration should NOT be included? A) Insurance B) Interest C) Property taxes D) Rents, if this is a rental property

The answer is insurance. Insurance is not normally included on the seller's net proceeds form because insurance is not prorated, and the cancellation check from the insurance company will not be part of the closing proceeds.

A sales associate who has been licensed for eight years did not renew his license this year. What is his status?

The answer is involuntary inactive. After the first renewal, a licensee who fails to renew by the required date is involuntarily inactive and can remain in that status for two years before the license becomes void.

In June, a broker listed a couple's house for six months. In August, the couple terminated the listing, paid the broker a cancellation fee of $250, and listed their house with a friend. They accepted a contract in September, and closed the sale that month. Based on the conditional termination clause of the Florida Realtors® listing agreement, the couple

The answer is is liable to the broker for the full commission. The listing agreement states that the cancellation is in case the seller decides not to sell. If the home is sold during the period of the listing, however, the seller is liable for the full commission.

What is FALSE about a valid real estate sales contract?

The answer is it requires witnessing. A deed must have two witnesses; a contract does not need witnessing.

Sales tax liability is due on a real estate purchase contract when personal property is

The answer is itemized and a separate value for each item entered in the contract. Personal property that is simply itemized in a contract does not trigger sales tax liability. However, when a separate value is stated for each item, sales tax must be paid.

What addendum to a listing contract states that the owner has a duty to disclose any facts materially affecting the property's value?

The answer is latent defects. This contract addition is called the latent defects addendum.

When a man added a family room to his house, which was already too large for the area, the value did not increase as much as the cost of the addition. What principle applies?

The answer is law of diminishing returns. By adding an extra room to a house that was already too large for the area, it is likely that the room cost more to build than the resulting increase (if any) in the market value of the home.

Which is FALSE about listing agreements in Florida?

The answer is listing contracts for less than one year are covered by the statute of frauds. It is not correct that listing contracts for less than one year are covered by the statute of frauds. All other statements are correct. All written listings must have definite expiration dates; oral listing contracts are enforceable; and listings are personal service contracts.

The process of evaluating the risks involved in issuing a new real estate mortgage is commonly called

The answer is loan underwriting. Loan underwriting is the evaluation of the risks involved when issuing a new mortgage. This process involves qualifying the borrower and the property to determine whether they meet the minimum requirements established by the lender, investor, or secondary market in which the loan is to be sold.

Which duty is owed by the broker to a principal in a single-agency relationship that is NOT owed to a customer in a transaction broker relationship?

The answer is loyalty. Because of the limited representation status of transaction brokers, the broker must treat all parties fairly and cannot be loyal to either.

Most tenant-management problems are related to

The answer is maintenance service requests. Failing to respond to a tenant's requests for repairs causes dissatisfaction, resulting in a higher turnover rate and bad public relations.

A sales associate's primary objective when answering a sign call or an ad call is to

The answer is make an appointment. Only by getting together with the buyer can the most effective service be made available.

A problem many investors have with industrial properties is that

The answer is many properties serve special purposes and are difficult to rent once they are vacant. For example, a steel mill might be a good investment as long as the steel company needed it. But when the company moves out, it might be years before someone else rents it.

The optimum rental price for standard space in a local area is determined by

The answer is market analysis. The optimum rental price for standard space in a local area is determined by market analysis (shopping the competition).

A seller lists property with a multimillion-dollar broker. The broker's agreement calls for him to enter the listing into the MLS within three working days. On the second day, the broker shows the property to a prospective buyer, who loves it. The buyer is leaving town the next day but will be back in one week to purchase it if it is still on the market. The broker wants to double his commission by selling his own listing, so he withholds the information from the MLS for 10 days. Based on this information, the broker

The answer is may be liable to the seller for violating duties required by the listing agreement. The broker is liable to the seller for violating fiduciary duties required by the listing agreement, and the broker could be disciplined by the Florida Real Estate Commission. The broker must abide by the listing agreement, avoiding self-serving activities.

An open listing

The answer is may be terminated at will. Open listings may be terminated at will by either party.

According to the Florida Realtors® Exclusive Buyer Brokerage Agreement, if there is a dispute between the buyer and the broker that they are unable to resolve, the dispute will be settled first by

The answer is mediation, and if that is not successful, to arbitration. Disputes must be mediated first. If mediation is not successful, the parties must agree to submit the dispute to binding arbitration.

A seller told the listing agent that the pool liner was defective. The sales associate disclosed the statement to the buyers. The contract was written reflecting that the buyers would pay for replacing the liner. The sales associate called a pool company and authorized the liner replacement at a cost of $1,750. The buyers' mortgage application was subsequently rejected and the sale did not close. The sales associate

The answer is might have to pay for the pool liner. The sales associate should have had the pool company contract with the buyers to protect against this possibility. If possible, the repairs should be made after closing to protect all parties.

A comparable property sold two months ago for $138,000. It has four bedrooms (the subject property has three) and is 160 square feet larger as a result. An analysis shows that the additional room/space makes an $8,000 difference. The subject is newer and in slightly better condition, so you estimate a difference of $5,000. The resulting net adjustment for size and physical condition is

The answer is minus $3,000. The adjustments would be -$8,000 + $5,000 = -$3,000.

High interest rates usually result in

The answer is more properties in listing inventory and a buyers' market. High interest rates usually result in lower sales, more properties in listing inventory, and a buyers' market.

A person who sends a fax

The answer is must allow the recipient to opt out of getting more faxes. The law requires the person who sends a fax to have an "established business relationship" with the recipient or written consent from the recipient, have voluntarily received the recipient's fax number, provide the recipient the right to "opt out" of getting more faxes, and remove the numbers of persons who opt out within 30 days.

An employee of a property management firm shows prospective tenants many of the duplexes the company manages around the city and writes up leases on the court-approved forms. The employee is paid $700 per month plus $50 per signed lease. The employee

The answer is must have a real estate license. The exemption from the license requirement is for a salaried, onsite employee of a management company. Because the employee shows properties around the city, he must have a license. Also, the employee is being paid on a transactional basis, which also requires a license.

A licensee who sells commercial property

The answer is need not give the customer a no brokerage relationship notice before showing property unless acting as a designated sales associate. A licensee who sells nonresidential property may be a single agent, a transaction broker, or a designated sales associate, or she may have no brokerage relationship with the customer.

Your neighbor promises to paint your house while you are on vacation. You tell the neighbor you would like him to paint it white. At that point, you and your neighbor have

The answer is no contractual agreement. You have given no consideration, so your neighbor is not bound.

A prospective buyer signs a sale and purchase contract form offering to pay the seller $175,000. The seller counteroffers for the full list price of $190,000. The buyer refuses the counteroffer. Later, a remorseful seller signs the original $175,000 offer. Which is TRUE?

The answer is no enforceable contract exists, because the counteroffer terminated the original offer. Offers may be terminated by counteroffer, acceptance, rejection, withdrawal, insanity of either party, lapse of time, and destruction of the property.

Which is NOT a Fair Housing Act advertising violation? A)No university students B)House is not modified for handicap access C)Home is close to the First Baptist Church and downtown D)Hispanic buyers welcome

The answer is no university students. Students are not a protected class under the Fair Housing Act.

Under federal do-not-call rules, licensees may

The answer is not call FSBOs, but they may call past customers for up to 18 months, even if they are on the list. Licensees may not call FSBOs who are on the National Do Not Call Registry but may call past customers for up to 18 months, even if they are on the list.

The BEST buyer farms are likely to be in areas

The answer is of owner-occupants who are ready to trade up to a larger house. Owner-occupants often have lots of equity in their homes and can trade up more readily.

According to the text, the sales associate who is presenting the offer should normally give copies of the offer

The answer is only after summarizing the important parts of the offer. A sales associate should summarize for the seller the important features of the offer before handing it to the seller.

If an owner reserves the right to sell the property without paying a commission, but allows many brokers to work simultaneously, he has given the brokers

The answer is open listings. An owner who allows many brokers to sell the property, reserving the right to sell it himself, has given the brokers an open listing.

What is the difference between effective gross income and net operating income?

The answer is operating expenses. Operating expenses is between effective gross income and net operating income. The financial statement for an investment follows: potential gross income minus vacancy and collection losses equals effective gross income; effective gross income minus operating expenses equals net operating income; net operating income minus mortgage payment equals before-tax cash flow.

When listing a property in the ordinary course of business, any active real estate licensee in Florida is authorized to prepare an

The answer is opinion of value. Because the licensee is involved in the transaction, the lack of objectivity would make it inappropriate for the licensee to make an appraisal.

Joining Toastmasters is an effective way to improve which skill?

The answer is oral communication. There are several ways to improve oral communications skills. Community colleges and universities offer communication and public speaking classes to the public. Dale Carnegie courses have been recommended by communicators for years. Of the choices shown, Toastmasters, a nonprofit service organization devoted to enhancing oral communication skills, is best.

Which is TRUE about a loan's effective interest rate?

The answer is origination fees should be added to the points charged in making the calculation. Because the origination fees go to the lender, the lender must include them in the calculation.

Which is FALSE about accessible parking requirements of the Americans with Disabilities Act?

The answer is parking areas should have one accessible space for every 40 total spaces. In fact, there must be an accessible space for every 25 total spaces.

If a property is particularly attractive from the front, the BEST way to show it is by

The answer is parking at the street. Parking at the street allows the prospective buyers to get a good look at the features of the front of the home.

To claim innocent purchaser status under the hazardous substance statutes, a purchaser should

The answer is pay for and obtain an extensive environmental audit. The purchaser should pay for and obtain an extensive environmental audit.

Which action will NOT negatively affect a FICO score?

The answer is paying down debt. Paying down debt will not negatively affect a credit score.

What is given greatest weight in calculating the FICO credit score?

The answer is payment history, with higher weight for recent history. The most important part (35%) of the FICO credit score is payment history.

Which party is protected under the Americans with Disabilities Act?

The answer is persons recovering from drug abuse. The ADA does not cover temporary impairments such as broken bones. Juvenile offenders are not persons with disabilities protected by the act. The act does protect persons who are recovering from substance abuse, but it does not protect persons who are currently engaging in the illegal use of controlled substances.

When buyers just want to "sleep on the decision" and you want them to make an offer on a home they love, the BEST way to help them make the decision is to

The answer is prepare the paperwork, then explain the sales agreement and the offer process. When a buyer wants to "sleep on it," that's often a sign that the buyer doesn't understand everything involved with the purchase. The sales associate who fills out the paperwork and describes the entire process is much more likely to get a signed offer.

The type of maintenance aimed at preserving the physical integrity of the premises is

The answer is preventive. Preventive maintenance is done to preserve the physical integrity of the premises.

Normally, the prospective buyer calling about a property with a For Sale sign wants information from the sales associate about the property's

The answer is price. The buyer already knows the address, and now needs the price. A buyer calling on an ad can see the price, but needs the address.

Of the recognized indexes used on ARM loans, which is MOST volatile?

The answer is prime rate charged by money center banks. The prime rate charged by major banks is the most volatile index of the choices given.

The interest rate that major banks charge to MOST favored customers and that is commonly used for home equity loans is the

The answer is prime rate. The prime rate charged by major banks is "prime" for the best customers.

A mortgage note normally shows the amount required to pay monthly

The answer is principal and interest only. The note shows only principal and interest due. The mortgage itself would show the requirement, if any, to pay taxes and insurance along with the principal and interest.

For a buyer to decide to work with a licensee, the MOST important factor probably is the licensee's

The answer is product knowledge. A licensee who knows what's on the market is a great asset to a buyer who wants a good house for a fair price.

A fallback list consists of

The answer is properties similar to those advertised. If one of the advertised properties has just been sold, or is in the wrong area for the buyers, the fallback list allows the sales associate to give other options and get the appointment.

The point where the business cycle, at its highest point, levels off and begins to fall is called

The answer is recession. A recession occurs when the cycle peaks, then suffers two successive declines in gross domestic product.

When helping a seller price a property, a licensee should NOT

The answer is recommend a price for the property before discussing the data in the CMA. The licensee should not suggest a price to the sellers before allowing the sellers to understand the market by reviewing the CMA.

The BEST and least expensive method of renting or leasing residential properties is the use of

The answer is referrals from satisfied tenants. While newspaper ads may be effective, word-of-mouth referrals are more effective and certainly less expensive.

The Florida Realtors® listing agreement has a dispute resolution clause that

The answer is requires the parties to seek mediation first. If mediation does not work, the parties may litigate, or, if agreed, arbitrate.

Which is NOT discrimination based on familial status?

The answer is requiring a couple to be married before occupancy. There is no protection for unmarried couples in the Fair Housing Act.

Total operating expenses include variable expenses, fixed expenses, and

The answer is reserves for replacement. The most accurate way to establish reserves is to divide the cost of each item and piece of equipment by its expected useful life in years.

Which is designed to promote the principle of conformity to maintain and enhance value in a subdivision?

The answer is restrictive covenants. Zoning codes set a maximum number of homes per acre, as do land-use plans and comprehensive plans. Restrictive covenants are set by the developer to try to preserve value of the homes.

The components of the seller's equity section of the seller's net proceeds form include

The answer is sales price, mortgages, and seller's equity. The components of the seller's equity section of the seller's net proceeds form include sales price, mortgages, and seller's equity.

Economic changes that recur annually are called

The answer is seasonal variations. Seasonal variations include the school year, spring clothing sales, et cetera.

Closing date is May 1. Property taxes are $3,567 annually. What's the proration, and where is it found on the Closing Disclosure?

The answer is seller owes buyer $1,172.71, shown on page 3. First, get the daily rate ($3,567 ÷ 365 = 9.77260). Multiply the daily rate times the number of days from January 1 through April 30 (9.77260 × 120 days = $1,172.71. Seller owes the buyer.

A sales associate must give a brokerage relationship disclosure to a customer when

The answer is selling residential property as a single agent. A licensee need not give a brokerage relationship disclosure when selling nonresidential property. Also, transaction brokers need not give a brokerage relationship disclosure.

What is the MOST persuasive argument to help get a FSBO to list her house?

The answer is she is unlikely to "save" the commission. The most persuasive argument to help get a for sale by owner to list is to convince her that she is unlikely to save the commission.

A student failed her 45-hour post-licensing course for the second time. What are her options if she wishes to maintain her license?

The answer is she must retake the course and pass a different end-of-course exam. A licensee who fails the post-license exam must wait at least 30 days before taking a different end-of-course exam. A licensee who fails the second exam would have to retake the entire course and pass the exam before she could renew.

A married couple lives in a 2,100-square-foot home. House sizes in the area range from 1,200 square feet to 2,100 square feet. A sales associate found seven comparable sales from different sized homes. He calculated the sales price per square foot for each home, averaged all the prices, and applied it to the square feet in the subject home. In preparing the CMA, the sales associate

The answer is should have used only the sales prices of similar-size homes. When preparing a CMA, licensees should use only comparable homes. Only the larger home sales should have been considered in this analysis.

An unlicensed personal assistant may NOT

The answer is show a buyer several listed properties, provide complete information, and help the buyer write the offer. An unlicensed assistant cannot provide real estate services that require a license.

A principal is responsible for the acts of his

The answer is single agent. The principal is responsible if his single agent misrepresents information about a property or fails to make disclosure to another person that he represents the seller. A customer is not responsible for the acts of his transaction broker or nonrepresentative.

Because of the financial crisis, lender standards have become more

The answer is strict. Lenders have less to loan, so their standards have become tighter.

What is MOST important in a sales contract?

The answer is subject property's legal description. The legal description of the property to be sold is an essential provision of the contract. A defective legal description can render the contract unenforceable. The classic test of the sufficiency of a legal description is whether a surveyor can locate the property by reference to the description used.

The comparable sales approach to value is based primarily on what principle of valuation?

The answer is substitution. The principle of substitution is based on a buyer's behavior of buying (all other things being equal) the house that is priced best.

A basic principle of value stating that a property's maximum value tends to be set by the cost of acquiring an equally desirable property is known as the principle of

The answer is substitution. The principle of substitution would suggest that a buyer would purchase a similar home in the same area if it were priced lower.

A person who wants to be a certified lead paint renovator must

The answer is successfully complete an 8-hour training course offered by an accredited training provider. The EPA requires contractors who disturb lead-based paint to be certified and follow specific work practices.

Which is the LEAST likely to help a sales associate obtain a listing?

The answer is sympathy. Persuasiveness, persistence, and empathy are qualities that may help a sales associate obtain a listing.

Finding new FSBOs in the classifieds or Craigslist is easier if the sales associate checks by

The answer is telephone numbers. Sorting the FSBOs by telephone number is the most efficient method for keeping track.

A seller tells a sales associate that she intends to take the ceiling fan when she moves, so he should be sure the listing information shows that it is not part of the sale. In this case, what should the sales associate do?

The answer is tell the seller to remove the fan before the property is shown. Personal property that will not stay should always be removed, if possible, so that negotiations are not adversely affected if a buyer sees, then wants the item.

A second job will NOT be counted as a source of income on a loan application if it

The answer is temporary. It is counted if it has occurred for at least two years and is expected to continue.

The effective date of the Florida Realtors®/Florida Bar contract is the date

The answer is that the most recent of the buyer or the seller signs the contract and communicates it to the other. The date of the contract is the date the last one of the buyer or the seller signs the contract and communicates it to the other.

A property is likely to sell faster if it is priced at

The answer is the "sold" section of the CMA. This will determine the value an appraiser is likely to reach for new financing.

The MOST common type of real estate mortgage is

The answer is the 30-year fixed-rate mortgage. The fixed-rate, fully amortizing mortgage loan has been the standard of the real estate finance industry for the past 50 years.

A person who provides services that require licensing under the Community Association Management Act must be licensed by

The answer is the Department of Business and Professional Regulation. More specifically, licensing of community association managers is done by the Division of Florida Condominiums, Timshares, and Mobile Homes, DBPR.

Disclosure of the annual percentage rate on a mortgage loan is required by

The answer is the Truth in Lending Act (TILA). The Truth in Lending Act (TILA) requires that mortgage lenders disclose their annual percentage rates to potential borrowers.

When annual debt service is subtracted from net operating income, the resulting amount is

The answer is the before-tax cash flow. This is often called cash throw-off.

A sales associate's statement that "the house is built of brick" should be followed immediately by

The answer is the bridge. An example of a bridge is "What this means to you, Ms. Jones, is . . ."

A seller refuses to allow the listing broker to split commissions with buyers' brokers, transaction brokers, or nonrepresentation brokers. Based on this information, which statement is TRUE?

The answer is the broker may take the listing but may not enter it in the MLS. The reason is that a licensee who enters a listing into the MLS is offering compensation to the brokerage firm that sells the listing. Because no compensation is offered, it may not be entered into the MLS.

Which is correct if a broker charges a $400 fee for preparing an appraisal that will not be used in a federally related transaction?

The answer is the broker must follow the Uniform Standards of Professional Appraisal Practice. An appraisal must be professionally, competently completed, and comply with the Uniform Standards of Professional Appraisal Practice (USPAP).

The section of the Florida Realtors® listing agreement titled "Cooperation and Compensation with Other Brokers" indicates that

The answer is the broker's policy is to cooperate with other brokers except when it would not be in the seller's best interests. The listing agreement says the broker's policy is to cooperate with other brokers except when it would not be in the sellers' best interests.

A sales associate asks a seller to vacate the property while it is being shown because

The answer is the buyer can take emotional possession of the property during the showing. If the seller is still in the property, the buyer will feel he is imposing, may resist asking important questions, and be reluctant to open closet doors, et cetera.

A sales contract required that the buyer give an additional binder within 10 days of the contract date. If the buyer failed to give the additional binder,

The answer is the buyer has defaulted. The buyer has defaulted. This is a failure to perform a duty required by the contract.

Under the Florida Realtors®/Florida Bar Residential Contract for Sale and Purchase, the party responsible for a property tax increase because of a change in ownership is

The answer is the buyer. Under the Florida Realtors®/Florida Bar Residential Contract for Sale and Purchase, the buyer agrees to be responsible for tax increases.

The relationship between a property's net operating income and its present value is

The answer is the capitalization rate. The relationship of net operating income to the price is the capitalization rate. Capitalizing net operating income is a basic approach to estimating value. If an investor pays all cash for a $300,000 investment and the net operating income is $30,000, the rate of return is 10%. This is calculated by dividing the net operating income by the value ($30,000 ÷ $300,000).

A broker is making a listing presentation to a FSBO. She completes the CMA and the sellers agree to accept the net amount shown on the seller's net proceeds form. She should be able to take the listing now primarily because

The answer is the commission is included on the seller's net proceeds form, and the sellers have agreed to the amounts shown. Because the broker has included the commission in the seller's net statement, their willingness to accept the net amount indicates they're ready to list.

The guidelines for loan underwriting are tightly structured. The one facet that allows the MOST subjectivity on the part of the lender's evaluation is

The answer is the credit profile. The lender has wider latitude with the credit profile than with any other part of the application.

Which is FALSE about the annual percentage rate (APR) disclosure?

The answer is the effective rate of interest is not affected by the number of years the mortgage loan stays in force. The Act assumes that borrowers will keep their loans for the full term. Most borrowers either sell or refinance their homes in less than 12 years. The actual (effective) interest rate paid depends on the number of years a loan is in force.

The reason it is not practical for a licensee to determine the exact prorations on the seller's net proceeds form when taking a listing is that

The answer is the exact closing date is unknown. Because the exact closing date is not known when the licensee is taking the listing, it is proper to simply estimate the prorations on the sellers' net statement.

The factor in an adjustable-rate mortgage that causes the calculated interest rate to change is

The answer is the index. The margin remains constant through the loan term. Only the index changes. The calculated rate is the product of the margin plus the index.

The component in an adjustable-rate mortgage that does NOT change from year to year is

The answer is the margin. The margin does not change. The index changes, as does the calculated rate and the rate charged.

The MOST probable price a property should bring in an arm's-length transaction in a competitive and open market is called

The answer is the market value. Market value is the most probable price a property should bring in an arm's-length transaction in a competitive and open market.

What must be consulted before making telephone canvassing calls?

The answer is the national and state do-not-call registries. Licensees must always consult these registries before initiating a prospecting call.

The minimum description requirement in a contract for a platted subdivision does NOT include

The answer is the number of acres in the parcel. Platted parcels do not include size in the legal description.

The relationship between supply and demand for a particular type of multifamily property at its current rental level is reflected by

The answer is the occupancy rate for that type of property. The occupancy rate shows the balance between supply and demand in the marketplace.

A man purchases an option on property. He requires that the option contract be acknowledged and recorded. The seller asks his agent about the best way to proceed. How should the agent answer?

The answer is the option should include a defeasance clause stating that the recorded option will automatically cease to be a lien on the property upon expiration of the exercise date. If the option is not exercised, there must be some way to remove it from public records so it will not cloud the title. Either a release of option should be recorded, or a defeasance clause ("if not closed by [date], this option contract shall have no further effect").

When making adjustments to sold properties in a CMA, the licensee's goal is to find

The answer is the price the subject property should sell for. A licensee's goal when making adjustments to sold properties in a CMA is to find the price a property should most likely sell for.

A person who authorizes another person (the agent) to represent her in a real estate transaction is

The answer is the principal. A person who authorizes another person to represent her in a real estate transaction is the principal.

The primary assurance to the lender if the borrower defaults on the loan is

The answer is the property value. If the borrower defaults, obviously his credit is no longer good. Now, the lender must look to the property value at foreclosure to pay off the debt.

The preclosing walk-through inspection is NOT intended to ensure that

The answer is the roof is structurally sound. The preclosing walk-through inspection is to ensure that personal property the seller is required to leave remains on the property, all required repairs have been completed, and the property has been maintained in the condition it was in at the time of the contract, ordinary wear and tear excepted.

Which is FALSE about access to buildings under the Americans with Disabilities Act? A)An object must be within 27 inches of the ground in order to be detected by a person using a cane. B)The route of travel should be at least 24 inches wide. C)Overhead objects must be higher than 80 inches for head room. D)Curbs at the entrance should have curb cuts.

The answer is the route of travel should be at least 24 inches wide. In fact, the route of travel should be at least 36 inches wide.

A sales associate hires a licensed personal assistant. The personal assistant is paid a salary of $1,000 per month and 15% of the sales associate's share of commissions. Which is correct?

The answer is the salary may be paid by either the sales associate or the broker. The broker must pay the commission. A licensed personal assistant must be registered under the employing broker and may be paid only by the broker for brokerage activities. A sales associate may pay the licensed personal assistant for nonselling activities with a salary but may not compensate a personal assistant for performance of brokerage activities that require a license.

At the time a listing agreement is negotiated, the listing broker should NOT discuss with the seller

The answer is the seller's religious preference. Asking questions about the seller's religious preferences could be a violation of the fair housing laws.

The safest way for a sales associate to determine whether a buyer is qualified is to use

The answer is the services of a lender to do it. If the licensee does the qualifying and misses an important factor, it could be embarrassing later if the buyer fails to obtain the financing. Let the lender do the qualifying.

Apartments that are vacant and available for immediate rental are placed on

The answer is the show list. The show list should have a small selection of units that are clean and marketable.

The law requiring that certain types of contracts be written to be enforceable is

The answer is the statute of frauds. In Florida, an agreement or a promise that cannot be performed by both parties within one year after the contract date must be evidenced by a written document. Also, an agreement to sell or the actual sale of any interest in real property is subject to the statute of frauds and must be in writing and signed by all parties bound by the contract to be enforceable.

Trees, landscaping, driveways, fences, pools, and other improvements of a home should be valued by the listing sales associate at

The answer is their contribution to value. Trees, landscaping, driveways, fences, pools, and other improvements of a home should be valued at their contribution to value.

A married couple who file jointly and who have owned and occupied their personal residence for three years sells a property. Which statement is TRUE about their tax liability?

The answer is they may exclude up to $500,000 of any gain before becoming liable for taxes. They may exclude up to $500,000 of the gain. A taxpayer may exclude up to $250,000 ($500,000 for a married couple filing jointly) of gain on the sale of a personal residence if the taxpayer owned and occupied the residence for at least two of the previous five years.

A licensed sales associate employs a salaried, unlicensed personal assistant. The assistant hands out brochures at an open house but does not do any selling, nor does she write contracts. Which is correct?

The answer is this activity is allowed. This activity is allowed under the rules of the Commission.

Properties that should be rejected as comparables for determining a subject property's value include all properties EXCEPT

The answer is those sold within the previous six months. Properties in the same market area that sold recently make the best comparable sales.

What is NOT a good reason to make a preclosing walk-through inspection?

The answer is to determine that no encroachments exist. A walk-through inspection is made to determine that the property has been maintained in the same condition it existed when the contract was signed, reasonable wear and tear excepted, ensure that all required repairs have been made, and to determine that all items of personal property are on the real property.

Sales associates should spend MOST of their time working with buyers who have

The answer is to move into the area in 60 days from out of town. Buyers who are from out of town and moving to the city within 60 days are highly motivated.

If a cloud on title cannot be easily removed by ordinary means, a court case is often the result. The legal action is called a suit

The answer is to quiet title. A court case to remove a cloud on title to real property is called a suit to quiet title.

The principal reason buyers don't qualify for a mortgage is because the buyer's

The answer is total obligations ratio is too high. The reason many buyers don't qualify under the Fannie Mae/Freddie Mac standards is usually the back ratio: total obligations.

Tor F: A licensee can call a past customer up to 18 months after the customer's last purchase, even if the customer's number is on the National Do Not Call Registry.

The answer is true. A licensee can call a past customer up to 18 months after the customer's last purchase, or up to three months after that customer makes an inquiry or submits an application to the company.

T or F: A single agent for one party in a transaction may decide to work with the other party with no brokerage relationship.

The answer is true. A single agent for one party in a transaction may decide to work with the other party as a nonrepresentative.

T or F: Operating expenses are divided into three categories: fixed expenses, variable expenses, and reserves for replacement.

The answer is true. Ad valorem taxes and property insurance are examples of fixed operating expenses. Their amounts normally do not vary with the level of the property's operation. Variable expenses include such items as utilities, maintenance, trash removal, supplies, janitorial services, and management.

T or F: If each apartment type is priced correctly, the manager will be able to achieve a balanced occupancy rate for all types.

The answer is true. An optimal price structure assures the manager of a 95% occupancy level for all units.

T or F: A resident manager is a salaried employee who usually coordinates rent collection, tenant relations, and maintenance work on the property.

The answer is true. And these responsibilities tend to increase in complexity with the building's size.

T or F: The licensee's objective when making a prospecting call to a FRBO is to get an appointment.

The answer is true. As in most areas of real estate sales, the telephone is used to get an appointment, not to make a sale.

T or F: A licensee who acts as a single agent must give a single-agent disclosure notice before showing a duplex to a prospective buyer.

The answer is true. Because a duplex has four or fewer units, it is considered residential property. A licensee in a residential sales transaction must give a brokerage relationship notice to potential buyers before the showing of property.

T or F:Only single agents may call their customers "principals."

The answer is true. Because only single agency creates a fiduciary relationship, only single agents may call their customers "principals."

T or F:The exclusive use of English-only advertising when there are also many non-English-speaking persons or other minority persons may be discriminatory.

The answer is true. Brokers should ensure that the advertising does not discriminate against minorities in the area.

T or F:Under the Housing for Older Persons Act, certain 55-and-older communities may ban children if at least 80% of the units have at least one occupant who is at LEAST 55 years of age.

The answer is true. Communities may advertise "adults only" if at least 80% of the units have at least one occupant who is at least 55 years of age.

T or F: Sales associates should select one evening each week to service every one of their listings, by phone call, email, or letter.

The answer is true. Contact every seller in person, by phone, or if personal contact is not successful, by mail or email. If you call and the seller does not answer, write a card immediately to let them know you called.

T or F: The statute of frauds requires that certain types of contract, in order to be enforceable, be in writing and signed by the party against whom enforcement is sought.

The answer is true. Contracts that must be in writing and signed are of two general types: those that will not be performed fully within a short period and those that deal with specific subjects. In Florida, an agreement or promise that cannot be performed by both parties within one year after the contract date must be evidenced by a written document.

T or F: Licensees may fill in the blanks on only the lease forms specifically approved by the Florida Supreme Court.

The answer is true. Currently, there are two leases approved by the Florida Supreme Court: the Residential Lease for Single-Family Home and Duplex, and a form developed by The Florida Bar.

T or F: The four different levels of maintenance operations are preventive maintenance, corrective maintenance, routine maintenance, and new construction maintenance.

The answer is true. Each of the levels must be able to be effectively performed by the property manager.

T or F:An advantage of investing real estate is that it offers higher leveraging opportunities.

The answer is true. Few other investments offer the high leverage that real estate does. Stocks and bonds typically require at least a 50% down payment; mutual funds want 100% invested. Yet real estate investments can be made with 25% down payments, and less in many cases.

T or F:In the investigation of complaints, HUD will consider, as evidence of compliance, among other things, the use of the equal housing opportunity logo.

The answer is true. HUD will also consider statements or slogans stating that the property is available to all persons regardless of race, color, religion, sex, handicap, familial status, or national origin.

T or F: Sales associates should NOT order repairs in their own name.

The answer is true. If the transaction doesn't close, you might have to pay for the repairs ordered. The seller or the buyer, as appropriate, should contract for the work. You should limit your activities to getting estimates and putting the parties in touch.

Asking whether the sellers would like you to try to get the home into the MLS as soon as possible is an effective method of asking for the listing.

The answer is true. If their response is positive, you can begin filling out listing paperwork.

T or F:It's often difficult to learn where a rental property is located by reading a FRBO's rental ad.

The answer is true. It's often difficult to learn where a rental property is located by reading a FRBO's rental ad because the address is not given in the ad, and the phone number in the ad is that of the owner's home.

T or F: A sales associate has a $300,000 listing that has three months left on the term. If the sales associate believes the listing has an 80% chance of selling, the listing has a quality value of $240,000.

The answer is true. Multiply the listing amount by the chances of sale during the term of the listing to determine the quality value.

T or F: To find the name and phone number of the loan officer for a transaction, the sales associate would refer to the Property Sale Information Sheet.

The answer is true. Names and phone numbers of the buyer, the seller, the listing and sales associates, the lender, and the title-closing agent are on the Property Sale Information Sheet.

Under the new rules, lenders must retain at least 5% of the loans that are securitized, except for those fully documented fixed-rate loans that are considered "safe."

The answer is true. New regulations require lenders to retain at least 5% of the loans that are securitized, except for those fully documented fixed-rate loans that are considered "safe."

T or F: Salaried employees of an owner, who work in an onsite rental office of the apartment community in a leasing capacity, are exempt from having real estate licenses.

The answer is true. Not only those people who work for an owner but also salaried employees of a properly licensed property manager of an apartment complex who work in an onsite rental office of the apartment community in a leasing capacity are exempt.

T or F: The MOST accurate way to establish reserves is to divide the cost of each item and piece of equipment by its expected useful life in years.

The answer is true. Other methods are also used, some including a percentage of the gross income based on experience, but this method is widely accepted as most accurate.

T or F: People who are exempt from having a license when performing property management duties may not be paid a commission or any form of compensation on a transactional basis.

The answer is true. Receipt of a commission for real estate activities is a felony of the third degree.

T or F:The Fair Housing Act requires that the parties come together to attempt to resolve every fair housing complaint in a process called conciliation.

The answer is true. The Fair Housing Act requires HUD to bring the parties together to attempt to resolve the complaint.

T or F: A single agent who transitions to transaction broker may not disclose to another party any information learned while serving as a single agent.

The answer is true. The agent may not disclose to the other party any confidential information learned while a single agent.

T or F: A lender has a maximum of three business days after a loan application to give a Loan Estimate to a prospective buyer.

The answer is true. The lender must give the disclosure to the borrower at the time of loan application or within three business days after the receipt of the loan application.

T or F: The sales associate should provide the title-closing agent with the signed sales contract, a previous title insurance policy if available, and enough information about the seller, the buyer, the property, and the lender so the title-closing agent can close the transaction.

The answer is true. The licensee should give the title-closing agent the following items when a title insurance order is placed: signed and dated sales contract; previous title insurance policy; and adequate information about the sellers, the buyers, the property, and the lender to close the transaction.

T or F: A man paid a woman $5,000 for a 30-day option to buy the woman's house for $225,000. Two weeks later, the woman sold her house to someone else for $245,000. The man can enforce his option and require that the property be sold to him.

The answer is true. The man has a valid, enforceable option and can require the woman to sell.

T or F: A FSBO sign can adversely affect the sellers' security.

The answer is true. The sign in front of the home invites any passersby to come to the front door and ask to be let inside, adversely affecting the sellers' security.

Private mortgage insurance will probably NOT be canceled when the borrower achieves 22% equity if the borrower has not been current on the payments within the year before the time for termination or cancellation.

The answer is true. There are three exceptions for which the PMI may continue: 1) if the loan is "high risk", 2) if the borrower has not been current on the payments within the year before the time for termination or cancellation, and 3) if the borrower has other liens on the property.

T or F: Regional shopping centers usually have three or more major department stores as anchors.

The answer is true. They generally are located near expressways to draw more distant shoppers to the sites. The centers often have large numbers of general merchandise retailers.

T or F:Rivers, lakes, railroad tracks, parks, or major highways may help define neighborhood's boundaries.

The answer is true. To determine the boundary, one would often look for a change in character in the land use.

T or F: Usually, when an owner engages a broker to be the property manager, the broker acts as a single agent for the owner.

The answer is true. Usually, when an owner engages a broker to be the property manager, the broker acts as a single agent for the owner.

T or F: Most tenant-management problems center on maintenance service requests.

The answer is true. When a tenant makes a maintenance request, managers must immediately tell the tenant whether it will be granted. A tenant request for service should be entered on a standardized request form. The resident manager should contact the tenant to ensure that the work was completed properly.

T or F: A buyer benefits from signing a buyer brokerage agreement because the sales associate can show properties like foreclosures and FSBOs that would not otherwise be seen.

The answer is true. When the buyer agrees to pay a commission, the broker can show the buyer unlisted property (FSBOs, properties being foreclosed, real estate owned by banks, etc.). Buyers would not be shown these properties unless a commission agreement was in place.

T or F:The major reason that listings expire is that they are overpriced.

The answer is true. While the property may not be attractive, or the market may be slow, it is the pricing that should be used to compensate for such factors.

How many times can a student take the 45-hour-course final examination?

The answer is twice. Students have two attempts at the exam.

An option contract is

The answer is unilateral and binds the optionor. An option contract is unilateral because the buyer (optionee) is not obligated to purchase, but the seller (optionor) must sell if the buyer exercises the option.

A sales associate wrote a special clause into paragraph 20 of the Florida Realtors®/Florida Bar Residential Contract for Sale and Purchase that contradicted one of the preprinted clauses in paragraph 4. The special clause as written

The answer is valid and binding. The special clause is valid and binding. Special clauses written into a contract take precedence over preprinted sections of the contract.

What is a contract that may be terminated at the option of one of the parties?

The answer is voidable. A voidable contract is an agreement that appears to be valid and enforceable, but may be rescinded by one of the parties. For example, a contract may contain a clause (provision) related to time of performance by both parties. If either party fails to perform on or before a specified date, the other party has the right to void or nullify the contract.

ARM loans are more popular

The answer is when interest rates are high. The reason is that borrowers find it harder to qualify with a fixed-rate (high interest) loan, and need a loan that starts out a little lower.

Unlicensed personal assistants

The answer is who are directed by the sales associate in how to do their jobs cannot be classified as independent contractors, and must pay withholding taxes. Unlicensed personal assistants who are directed by the sales associate in how to do their jobs cannot be classified as independent contractors and must pay withholding taxes.

If a broker complies with an owner's instructions to restrict prospective tenants to Christian persons, will the broker violate the Fair Housing Act?

The answer is yes, because it shows a preference or limitation based on religion. Brokers may not discriminate in the terms, conditions, or privileges of the sale or rental of a dwelling, or in the provision of services or facilities in connection with sales or rentals, because of race, color, religion, sex, handicap, familial status, or national origin.

A licensee is the single agent for a minority couple. He says, "Are you more comfortable buying a home in a neighborhood with people of your race?" Does this question violate any laws?

The answer is yes, this is an illegal question that is considered "steering." It is illegal to communicate to any prospective purchasers that they would not be comfortable or compatible with existing residents of a community, neighborhood, or development.

The principal drawback of a farm is

The answer is you may have to work for a long period before any returns are realized. Many licensees become weary of farming because the biggest returns come a long time after the effort is expended.

Property Characteristic

The features of a property that are used as a basis of comparison in an appraisal or comparative market analysis.

curb appeal

The impression, good or bad, that is made when a person first looks at a house from the street.

Calculated Interest Rate

The interest rate in an adjustable-rate mortgage that is calculated by adding the margin to the index.

technical knowledge

The knowledge needed by licensees to properly conduct their business that relates to filling out contracts, preparing seller's proceeds estimates, doing comparative market analyses, et cetera.

Which is NOT one of the three major problems in showing the property a FSBO might expect? A) The likelihood that the seller will save the commission. B) The house is off the market when the seller is away from home C) It is hard to get prospective buyers inside if the exterior of the house is not particularly attractive D) The risk to personal safety from letting all prospective buyers into the house

The likelihood that the seller will save the commission.

expansion

The phase of a business cycle that begins after a recovery when economic conditions improve.

appraising

The process of estimating the market value of property.

qualifying

The process used by a licensee to determine whether to spend time working with a buyer or a seller. For example, a buyer would first be qualified financially, and then based on motivation to buy

subject property

The property being appraised.

ethical

The right thing to do. Usually a higher standard than legality.

T or F: A comparative market analysis is typically requested by a lender for a property already owned by the lender.

The statement is false. A broker price opinion is typically requested in this situation.

T or F: The statement is false. A person's signature on the face of a note makes the person liable for payment. Witnessing the obligor's signature puts another signature on the note and makes the witness liable.

The statement is false. A person's signature on the face of a note makes the person liable for payment. Witnessing the obligor's signature puts another signature on the note and makes the witness liable.

The popularity of adjustable-rate mortgages (ARMs) increases when interest rates fall.

The statement is false. ARMs increase in popularity when interest rates rise. When interest rates are low, borrowers are likely to lock in the low rate on a 15- or 30-year mortgage, not on an ARM.

T or F: to reduce the risk of loss in a default situation, lenders look to the credit rating of the borrower.

The statement is false. If a loan goes into default, the borrower's credit rating is not relevant. The value of the collateral becomes the most important factor.

T or F: Under the "time is of the essence" provision, failure of any party to perform the duties or promises made within the exact time limits established in the contract constitutes an automatic default and, in turn, grants the nonperforming party the right of cancellation.

The statement is false. It creates a right of cancellation for the other party, not the nonperforming party.

T or F: Licensees should advise buyers who are shopping for a mortgage to focus exclusively on those lenders who are offering the lowest rates.

The statement is false. Licensees should advise buyers to consider a lender's reputation for integrity and good service, as well as the lender's borrowing rates. Licensees should use and recommend only those lenders that provide good service.

T or F:An open listing may be entered into the multiple listing service (MLS) system, provided the broker has a signed agreement.

The statement is false. MLS systems do not allow open listings to be entered because no single broker has control and, therefore, would not be entitled to any portion of the commission if the property were to be sold by another brokerage firm.

T or F: The 15-year fixed-rate mortgage has become popular in recent years, even though it costs borrowers thousands of dollars more in interest charges than would be incurred with a 30-year fixed-rate mortgage.

The statement is false. The 15-year fixed-rate mortgage actually saves borrowers thousands of dollars in interest charges.

T or F: The Civil Rights Act of 1866 protects women from discrimination when they are applying for a home mortgage.

The statement is false. The Equal Credit Opportunity Act protects women who apply for a home mortgage.

T or F:A standard provision of ARMs is a prepayment penalty.

The statement is false. To the contrary, a standard feature of ARMs is no prepayment penalty.

T or F: Under the abstract and opinion of title method, but NOT under the title insurance policy method, a property's title is searched by an experienced abstractor.

The statement is false. Whether the abstract and opinion of title method or the title insurance policy method is used, a property's title is searched by an experienced abstractor who prepares a report of those recorded documents that clearly affect the quality of ownership.

T or F: The annual percentage rate (APR) must, by law, be the relationship of the total financing charge to the total amount financed, and it must be computed to the nearest one-eighth of 1%.

The statement is true. A simple but accurate definition of the APR is that it is the effective interest rate for a mortgage loan repaid over its full term.

T or F: Property taxes typically are paid in arrears by the buyer.

The statement is true. As such, they are a debit to the seller and a credit to the buyer.

T or F: Generally speaking, when the economy is strong and prices are rising, the Federal Reserve tightens the money supply to control inflation.

The statement is true. Because of the higher interest rates, real estate investments often become less profitable.

T or F: In Florida, a listing contract may be written, oral, or implied by the knowledge and consent of both parties.

The statement is true. Florida law recognizes written, oral, or implied listings, assuming evidence is available to support a claim for compensation.

T or f: A sales associate should preview properties before showing them to customers.

The statement is true. If a property were in poor condition, it could reflect poorly on the sales associate.

T or F: The classic test of the sufficiency of a legal description is whether a surveyor can locate the property boundaries.

The statement is true. Licensees should be careful that the legal description is stated correctly on the contract.

The PITI payment includes the principal, interest, and escrow expenses in the monthly mortgage payment.

The statement is true. Most lenders require an amount each month that includes principal and interest plus escrow items—property taxes, homeowners insurance, and possibly mortgage insurance or homeowners or condominium association dues.

T or F: The basic real estate loan is the 30-year fixed-rate mortgage with regular monthly payments of principal and interest.

The statement is true. The 30-year amortization schedule and regular monthly payments of principal and interest serve as the framework for real estate financing.

T or F: The 365-day method is MOST commonly used for prorations of annual expenses.

The statement is true. The annual cost is divided by 365 days to get a daily rate. That rate is then multiplied by the number of days involved to arrive at the amount due.

T or F: If a lender offers a first mortgage for 4.5% and charges four points, the effective interest rate if the loan is held for at least 12 years is 5%.

The statement is true. The formula to calculate the effective interest rate is note rate + (points ÷ 8) = effective interest rate. 4.5% + (.04 ÷ 8) = 4.5% + .5% = 5%.

T or F: One of the four basic loan processing procedures is the preparation of loan closing documents.

The statement is true. The four procedures are 1) determining the borrower's ability to repay; 2) estimating the value of the collateral; 3) researching the title; and 4) preparing the documents for closing the transaction.

T or F: When first written and signed, an option contract is unilateral.

The statement is true. The owner-optionor is obligated to sell if given proper notice by the buyer-optionee, but the buyer-optionee is not obligated to purchase and may allow the option to expire.

T or F: The components of a full title report are a survey, a physical inspection of the collateral, and a search of the records to determine all the interests in a property.

The statement is true. These are the components of a full title report.

T or F: The four major components of the gross domestic product (GDP) are consumption, investment, government purchases, and net exports.

The statement is true. These are the four components of the GDP.

Gross Domestic Product

The sum total of goods and services produced by the United States. The four major components of GDP are consumption, investment, government purchases, and net exports.

dynamic risk

The uninsurable risk in owning real property. For example, changes in environmental or tax laws, of loss of a major employer in the area. This risk can sometimes be avoided by careful analysis before the property is acquired.

Fair Housing Amendments Act of 1988

This federal law expanded the Fair Housing Act to include protections for families with children and persons with disabilities.

T or F: A new sales associate should spend the majority of free time looking at property.

True

T or F: A sales associate's goals should be written, measurable, attainable, and flexible, and they should be tied to deadlines.

True

T or F: Existing structures must be made accessible when that goal is readily achievable, meaning that the goal can be carried out without much difficulty or expense.

True

T or F: Licensees are obliged to get a property's information into the MLS as soon as possible.

True

T or F: The three types of knowledge that sales associates need to possess are technical, marketing, and product.

True

T or F: Under the ADA, for every inch of height, ramps should have at least one foot of length (1:12) and have a railing at least 34 inches high.

True

T or F: When an agent is showing the home, the seller should leave the property if possible.

True

T or F:Learning to prepare a comparative market analysis is technical knowledge.

True

T or F:The use of jargon should be avoided when communicating with customers.

True

recession

Two successive quarterly declines in the gross domestic product (GDP). This is the point at which economic activity has peaked and will be followed by a contraction.

recovery

Two successive quarterly increases in the gross domestic product (GDP). This is the point at which economic activity has bottomed and will be followed by expansion.

What clause in a listing contract contains a promise by the owner certifying that all the information related to the property is true and accurate?

Warranty of Owner

specific cycles

Wavelike movements similar to business cycles that occur in specific sectors of the general economy, such as the real estate market.

New Construction Maintenance

Work done on an income property designed to enhance the property's appeal to tenants. Includes adding new wallpaper, carpeting, and light fixtures.

It is more likely that a sales associate can list the property if the seller

does not like meeting and negotiating with people.

The preferable approach to setting the listing price is to

go over the CMA carefully and help the seller to arrive at an appropriate range of values.

A sales associate who meets a qualified prospect makes a weekly contact with that prospect for at least six weeks, later reducing the contacts to twice monthly. This technique is called

saturate and remind.

Don't spend time working to get a listing if the:

seller is not motivated; seller suggests you break the law by nondisclosure or discriminatory practices; listing is outside your target market, such as in an adjoining community or is a warehouse opportunity if you're a residential sales associate; listing is outside your preferred price ranges; property condition is so bad you would be embarrassed to show it; or owners are so rude or demanding you don't want to work with them.

The process of setting and meeting goals does NOT

start with short-range increments.

The reason MOST FSBOs won't be able to save the commission is that

the prospective buyer is buying direct to save the same commission.

Reconciliation

the resolution of several adjusted values on CMAs into a single estimate of value