real estate license test
John is a sales associate who has complaints against him for making false statements about property and for giving advice about the purchase contract. This is the third time these same violations have been investigated. If John is found guilty of violating these two practices at the formal hearing, the maximum fine John can face is:
$10,000
If John borrows $620,000 for his mortgage at 4.5% interest, what amount of interest will John pay in the first year of the loan?
$27,900
A seller wants to net $100,000 after paying the broker 5% and paying off his loan balance of $200,000. He will also pay documentary stamps on the deed of $2100. What must the property sell for to cover all costs and net the seller his desired amount?
$318,000
A broker listed a house at $300,000 and sold the home at 95% of the asking price. The listing broker paid out 45% of the total 6% fee to the selling broker, who paid the selling associate 60% of the amount that came to the office. How much did the selling associate get paid?
$4,617
A licensee is working with an investor who is interested in purchasing a small apartment complex. The property has six units rented at $1100 per month. If the cap rate is 7% and Net Operating Income (NOI) is $38,500 - what is the price of the property?
$550,000
A buyer is closing with a purchase price of $232,000, and a down payment of 10%. He will pay the doc stamps on the note and the intangible tax on the mortgage. What are the transfer tax charges to the buyer?
$731 for the note; $417.60 for the mortgage
Which phrase best describes the term undivided interest when speaking of a co-ownership or concurrent interest?
-All owners have a shared interest in one property; the property is not divided
An investor is looking at a four-plex that is priced at $500,000 and has a 7% cap rate. The investor told the sales associate to write up the offer using a 9% cap rate. To the nearest dollar, what is the investor willing to pay?
388,889
When a complaint is filed against a licensee what criteria determines if an investigator is assigned?
The complaint must be legally sufficient and there must be evidence that a FREC or DBPR law or rule was violated
The Government Rectangular Survey Method numbers sections within a township from:
1-36 beginning in the upper NE corner of the township and continuing in a snake like pattern.
According to Florida law, if the landlord does NOT intend to keep any of the tenant's security deposit, the landlord must return the security deposit to the tenant within:
15 days.
A licensee has been notified that there is formal complaint against him as a result of findings by the probable cause panel. How long does the licensee have to answer the complaint?
20 days
A homestead exemption in Florida is available to those who qualify and file documents making the Florida home a primary residence. The base homestead exemption is:
25k
A property was purchased two years ago for $300,000; the investor just sold the property for $379,000. What was the percentage of profit in relation to the cost?
26.3%
Sam and Joan made an offer of $250,000 asking the seller to pay all closing costs. They will put 10% down and pay one discount points at closing. The amount of cash required at closing for Sam and Joan will be?
27,250
The NW 1/4 of sections 16 and the NE 1/4 of section 17 contain how many acres?
320
The Comparitive Market Analysis (CMA) is a tool for licensees; which statement below is correct about the CMA?
A CMA is not an appraisal - and should not be advertised as one
A broker's records must be available for inspection during business hours. Who inspects the records?
A DBPR employee or authorized representative
Personal property is being transferred with the sale. Which document transfers personal property?
A bill of sale
Which of the following statements is NOT correct regarding the escrow account for the brokerage?
A broker can only have one escrow account
Which of the following items are necessary to create an agency relationship?
A client, an agent, and a representation to a third party
The seller and buyer have countered back and forth for several days. The two parties have verbally agreed on a price, but neither has signed anything. At this point the status of this negotiation is:
not a contract until the parties have signed the necessary documents.
Which appraisal approach to value would be most suitable for a waterfront home with a high-end remodel on a lot that cannot be duplicated, in an area with many other remodels and sales?
A market data or sales comparison approach
Which statement listed below is the best example of mortgage fraud?
A mortgage loan applicant omits pertinent information on the loan application form
Which phrase below describes the meaning of the word "contract" expressed in simple terms?
A promise to do or not to do something
Which items listed below are required for a valid deed?
An accurate legal description and the signature of the grantor
Which of the statements listed below regarding the earnest money deposit (EMD) is correct?
An earnest money deposit is NOT required to create a valid contract
Which of the following estate has a definite ending date?
An estate for years
What is the common term for the security interest that the lender has in the property?
Collateral for the loan
Davis is selling an investment condo he has owned for several years. He has never lived in the unit and he has not visited the unit in 5 years. He shares these facts with Broker Bob who suggests that he list the condo "as is." In this case:
Davis is still required by law to reveal any important information and material facts about the condo unit.
Which statement is correct regarding disclosed dual agency in Florida?
Disclosed dual agency is not an authorized brokerage under Florida law.
A property is located next to a busy freeway; semi-trucks use the freeway all night long. After two years on the market, the seller reduced his price by 25%. Which loss of value has occurred?
Economic or external obsolescence
Which action below might be considered abandoning of real property ownership?
Failure to pay property taxes
John has a rental property with four bedrooms. He just installed new off-white carpeting. John does NOT want to rent to a family with children or a dog. Which of the following wording used in his ad is permissible?
Four bedroom home, recently updated, $1300 per month
Which of the following actions could not be performed by an unlicensed assistant?
Hold at an open house for a new listing
Save our Homes, also known as amendment 10 protects Florida homestead property in what way?
Homestead property is protected by an annual cap of 3%
The FREC has the power to discipline licensees. What action can FREC not perform?
Issue a jail sentence
John is a real estate licensee in Georgia who wants a Florida real estate license. As long as John remains a Georgia resident, which of the following is an option for John when acquiring a Florida license?
John can pass a 40-question law exam and gain the license through Mutual Recognition
John's parents passed away within six weeks of one another. As the trustee, John is following the trust instructions and will sell the family home. John will be paid in accordance with the trust documents. Which of the following is correct?
John is working within the scope of his duties following trust instruction and does not need a license.
A seller tells a listing associate that he will not sell to members of a certain religion. Can the listing associate follow the seller's instructions?
No, this is discriminatory and would be a violation of the Federal Fair Housing Act
When a transaction has failed and the buyer and seller are both demanding the escrowed funds what is the broker's best course of action?
Notify FREC within 15 days that there is an escrow dispute
Bob wants to sell his home and doesn't want to pay a fee, but he realizes he might have more prospects if he uses a broker. Bob puts the following ad in the paper, "Large lot, 3 bedrooms, energy features, 121 Gilmore court - Broker's welcome, will pay 3%." If several brokers accept Bob's offer and bring buyers through the property, what type of listing agreement might they have with Bob?
Open listing
Taxes and insurance, are often prepaid at closing to establish the escrow account. On which page of the Closing Disclosure form will the buyer see an accounting of the escrow account set up?
Page two, under other costs
The Supreme Court has said that zoning laws are constitutional because they protect which of the following?
Private property rights and health and safety
Which of the items listed below is NOT a tax advantage of real estate ownership?
Property can depreciate
What is a primary difference between joint tenancy and a tenancy in common?
Property titled as a joint tenancy cannot be willed
Which statement is true regarding the quasi-legislative power of the FREC?
Quasi-legislative power gives FREC authority to make rules to enhance the law
Availability of labour, materials, and land are market indicators of:
SUPPLY
The secondary market and participants provide stability for home financing in what way?
Secondary market participants purchase existing paper which frees up cash for lenders
Which appraisal theory says that the maximum amount a buyer will pay is based on the price of the competing property?
Substitution
Which items below are expenses associated with the property that are used to arrive at NOI by deducting from Effective Gross Income?
Taxes, insurance, management fees, maintenance, utilities and reserves.
A mortgage is a legal contract with terms that benefit both the lender and the borrower. Which clause is a benefit to the borrower and NOT to the lender?
The Defeasance clause
Which clause in a deed defines the ownership taken by the grantee, and clarifies the purpose of the deed?
The Habendum Clause
Which events listed below would terminate an agency relationship where a broker represented a seller?
The house sold and the transaction closed
Which items listed below determine if the payment will go up or down on an adjustable rate mortgage?
The index and the margin
A supervising broker has had his license revoked. What happens to the sales associates and broker associates who work within the brokerage under the direction of this broker?
The licenses are places on involuntary inactive status
John has a rental application for a unit in his four-plex from a man in a wheel chair. The man wants to install a ramp by the back door and change a cabinet in the bathroom to allow the wheel chair to slide under. What are John's choices as the unit owner?
The modification cannot be refused; the tenant can pay and should restore to original condition upon move out
Which statement below is correct regarding the mortgage as a security document?
The mortgage lien is a specific, voluntary lien
Which of the following would terminate an offer?
The offeror withdraws the offer prior to acceptance by the offeree
A buyer with a low credit score must pay two (2) discount points at closing to get his note rate at 4.25%. How does this affect the loan?
The points are extra interest and increase the lender's yield.
How is the sales price reflected on the closing form for the buyer and the seller?
The sales price is a debit to the buyer and a credit to the seller
Jim, a licensee in Florida moved to Georgia and retired. Before leaving Florida Jim placed his real estate license on inactive status, what will happen if Jim doesn't renew the license after two years?
The status will change from voluntarily inactive to involuntarily inactive
There are advantages and disadvantages of real estate ownership; which items best describe the advantages?
The tax advantages and potential for leverage
In real estate, which of the following is correct about the term "title?"
The term title is a concept referencing the rights associated with ownership.
Which phrase below best describes the meaning of the term Annual Percentage Rate (APR)?
The true and actual cost of the amount financed
Eminent Domain allows for the "taking" of private property for public good. What two items must occur before the "taking" of a property - either all or part can occur?
There must be a condemnation proceeding and the owner must be compensated.
Which characteristic of value and component, would cause the lender to refuse to make a new loan for a buyer?
Transferability - the title is not marketable
FREC members of the Probable Cause panel act as a:
a grand jury.
When one owns a condo, the type of ownership that exists is a:
fee simple interest with an undivided interest in common elements.
A deed and a real estate purchase agreement would not be considered valid without:
an adequate legal description.
A real estate license is required in Florida if one negotiates a sale as part of a business relationship with:
another individual and expects compensation related to the transaction.
A Planned Unit Development (PUD) is best described as a (an):
area more dense than residential zoning, designed to maximize development by using green space.
After hurricane Ivan a beach front property owner lost the first 75 feet of his property. This violent tearing away of soil by the hurricane is referred to as:
avulsion
The two voluntary forms of title transfer are:
by will and by deed.
Real property taxes in Florida are paid to:
cities and counties.
A real estate speciality that deals with property of more than four units, income production and tax advantages of ownership is:
commercial real estate
A difference between commingling escrowed funds and conversion of escrowed funds is:
commingling is mixing personal and business funds while conversion is using funds for personal or business purchases.
FREC and DBPR have a primary interest in real estate activity with a common goal of:
consumer protection
A closing is March 5 for a rental property with an annual tax bill of $2800. Calculate and show the debit and credits for the tax proration between the buyer and seller using the 365 day method, the day of closing belongs to the buyer.
debit seller $483.29; credit buyer $483.29
When a homeowner is delinquent on property taxes, the first step taken by government in correcting the late payment is the:
delinquent tax payer names are published in the local paper
FREC members are a volunteer body because they:
have no salary, have no employees, and do not work on a daily schedule.
Jim inherited a property that has not been maintained in years, the property needs new appliances, a roof, new siding, new electrical and plumbing. The cost of the updating far exceeds the value of homes in the area. The lack of feasibility in doing these repairs is called:
incurable.
The physical characteristics of real estate may be described as:
indestructible, unique, and immobile.
The Real Estate Recovery Fund will never pay for:
legal fees or punitive damages.
A homestead for a personal residence may be described as a (an):
legal life estate.
If the Loan to Value is high, the party most at risk for loss when a property is financed is the:
lender
The Civil Rights Act of 1988 had two important benefits for housing discrimination. They can be described as:
more protected classes than the 1968 act and greater punishment for violators.
VA loans require less cash from veteran borrowers because there is:
no down payment, but there are closing costs.
Every real estate brokerage sign must be located:
on the entry door or close to it.
The purpose of the owner's title policy is to protect the:
owner from forgery in the record and claims that may not have surfaced prior to closing.
A primary difference between post-license education and continuing education (CE) is:
post-license education is required for the first renewal and CE is owed each renewal thereafter.
The term foreclosure means that the:
property is sold in a forced sale to the highest bidder.
The purpose of the Mortgage Insurance Premium (MIP) charged to a buyer with an FHA loan is to:
protect the lender due to the low down payments made by FHA borrowers.
George is a Denver broker with a brother who owns five Florida condo's. George's brother is ready to sell these condos and George would like to collect a fee. In order to collect this fee legally, George can:
refer the condo's to a licensed Florida broker who will list and sell the condo's and pay George a referral fee.
When a cap rate used with income capitalization is high, the following relationship with sales price exists:
risk and cap rate are higher, the sales price is usually lower.
A primary difference between preventative maintenance performed by an apartment manager and routine maintenance is:
routine maintenance involves regular tasks and preventative maintenance saves money or minimizes risk.
Broker Joe has a listing for a distressed seller. He finds a buyer for the property who enters into a contract for purchase. Ten day prior to closing, the seller calls Joe to share that he has had to file for bankruptcy. This filing may:
terminate the contract.
When a complaint is investigated by DBPR it must be legally sufficient. Legally sufficient means:
that an alleged violation of a Florida Statute, FREC or DBPR rule been submitted in writing.
John bought a waterfront lot with a setback requirement of 50 feet from the street. The lot is only 100 feet deep and drops off sharply at the water edge. John's architect tells him that they can build the dream house on the property if the setback were 35 feet. John applies to the city for a:
variance.
