Real Estate Practice Exam Questions

Which of the following is a likely effect when the discount window is closed?

Banks dont have access to additional funds

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

Benchmark

Which of the following is true about the Florida Homestead Law?

It prevents families from being displaced under certaain conditions

What entity has legal title to a financed property to a lien theory state?

The borrower

What's the maximum civil penalty that can be accessed under the FLorida Deceptive and Unfair Trade Practices Act?

$10,000

Gabi owns one parcel measuring one square mile and another parcel measuring one mile x half a mile. She combined the parcels and sold them for $2.5 million. What price per acre did she receive for the land?

$2,604.17 One square mile is 640 acres 640 640 / 2 = 320 640 + 320= 960 2,500,000 / 960= 2,604.17

A homeowner sells his house for $325,000 more than he bought it for. When he files his income taxes, how much fo this profit may he exclude from his capital gains if he's filing as a single taxpayer?

$250,000 The maximum capital gains exclusion for single taxpayers who have lived in their primary residence at least two of the five years immediately preceding the sale of the home is $250,000.

Giant industries has a $674,232 gross operating income, operating expenses of $329,129 and other expenses totaling $38,719. What is the net operating income?

$345,103 674,232 - 329,129= 345,103

Homes built in which of the following years are more likely to have asbestos present?

1960

A strip mall valued at $850,000 has a $67,5000 annual net operating income. WHat is the capitalization rate for the strip mall?

7.9% 67,5000/850,000= 0.079 or 7.9%

Which of these are self-dealing?

A license sells her own property without informing all parties that she's licensed

What is a bound?

A physical feature that defines the boundaries of the land

Which of the following properties would qualify for a homestead exemption through the Florida Homestead Law?

A primary residence in the city on a quarter-acre lot

Which of the following statements about the promissory note is true?

A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note's terms.

After getting into a fender bender, Parker had to buy a new car. To make the down payment on the car, he had to skip a couple of his mortgage payments. He received a notice from his lender indicating the remaining amount of his loan is due immediately and in full. What clause in his mortgage stipulates this?

Acceleration

Noah owns an LLC that buys and sells stocks on the NASDAQ 100. He needs some additional financing. To which type of lending institution might he prefer to go?

An investment group

Which item is optional for a broke to include on office signage?

Associates names and license statuses

In which form of price determination does the real estate professional often just drive by the property and take photos, then complete paperwork for the lender?

Broker's Price Opinion

A comparison of before-tax cash flow to cash invested is known as?

Cash-on-cash return

What document establishes path and proof of ownership?

Chain of title

Which method of estimating a businesses value considers the sales price of similar businesses and accounts for basica differences to arrive at a market value?

Comparable sales analysis

Broker Malcolm submits his client's purchase offer, then goes on vacation. When he returns two weeks later, he learns that a counter-offer was submitted, and the response date had expired. His client's offer was terminated because he failed to respond on time. This violation is an example of?

Demonstrating untrustworthiness or incompetency to act as a real estate broker

What's an up front charge to make up for the difference between the interest rate the borrower is paying and the rate the lender normally requires?

Discount Point

Which option would a license pick on the election of rights form if the license wanted a formal hearing?

Dispute the complaint and request a hearing

What are the first symptoms of carbon monoxide poisoning?

Dizziness and nausea

Lauren obtained a loan that's insured and that only required a down payment of 3.5%. Which of these is most likely the type of loan Lauren has?

FHA

Jericho and Cindy, an unmarried couple have kids 3, 5, and 12. A seller's broker refuses to show them a house in a neighborhood where residents tend to be older, and no one has kids. WHich protected class status applies?

Familial Status

Who or what determines the amount that can be set aside in reserve funds?

Federal regulations Generally buyers should be prepared to place as much as 14 months' with or prepaid taxes and insurance in reserve.

A pair of property owners applied for an exemption on their Florida homestead and it was denied. They do not agree with the decision. What should they do?

File a suit against the county property appraiser and the county tax collector

Daniella's rental property is barely covering her expenses. Two of her six tenants have moved out, and she has had to upgrade the buildings heating and air conditioning systems. This is an example of which type of work?

Financial

What act simplifies, clarifies, and modernizes consumer protections laws and makes them more consistent with federal trade laws?

Florida Deceptive and Unfair Trade Practices Act

Formula for finding net operating income is

Gross income - operating expenses= net opertating income

Kramer is a buyer who just signed a buyer agency agreement. He likely did this so that

He would recieve a higher level of service

Appraiser Jerry is looking past how a property is being used to determine a more optimal function. WHat is he determining?

Highest and best use

To meet the requirements of the state of frauds, an agreement must clearly identify the contracts subject matter, present the contracts essential terms and conditions and ____________ to be enforceable.

Identify the contracting parties

_________ describes a unique characteristics of a real property (differentiating it from other asset classes). Because of it, location plays a key role in value.

Immobility

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

In-ground

Which of the following is NOT recommeneded during a downcycle?

Increase your advertising

What might a borrower's escrow account or reserve fund pay for?

Insurance and taxes Protects the lender's interests should the borrower default

WHat is the total dollar amount that a borrower with a FHA-Insured loan?

It depends on where the property is located

Karen's house was recently foreclosed on to pay off a lien on her home. What happens to any extra money after the lien and expenses of the sale are paid?

It goes to Karen.

What is the name of a type of ownership where each person has the same percentage of ownership and the right of survivorship, but are not married?

Joint tenancy

Joe and Susie bought a house together before they were married. If Joe dies, Susie automatically inherits Joe's share of the house. What type of ownership is this?

Joint tenancy Because they are not married when they purchased the home and the right of survivorship is involved (Susie automatically inherits Joe's share of the house upon his death).

Which valuation method estimates the proceeds that can be generated as a result of selling all assets and inventory and pay off short-term liabilities?

Liquidation analysis

Lenders often look at the appraised value of a property compared to the amount of the loan when considering how much a borrower must provide as a down payment. What is this value called?

Loan-to-value ratio

What is recommended way to protect yourself from community unauthorized practice of law when drafting a document?

Make all terms of all contracts subject to review by attorneys for both parties

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

No, Florida prohibits dual agency for reseidentail sales

Mary contracted to buy her mother's house when her mother moves to a senior living community, but now Mary has to move because of work and no longer wants to buy the house. With their mother's agreements, Mary's sister, Tina steps in, releasing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. What happened here?

Novation

When does a partial performance of a contact occur?

One or both parties have completed only a portion of the same agreed to in the contract

Grant owns a property that's subject to an option contract. Grant is the

Optiponor The proptery seller in an option contract is known as the optionor.

Single Agents

Owe a total of nine duties to their clients, including the fiduciary duties of confidentiality obedience, loyalty, and full disclosure.

Tenancy by entirety

Owners must be married when they purchased the property Involves right of survivorship

Which of the following activities would constitute a breach of the duty to use skill, care, and diligence?

Performing an appraisal to determine the value of a home

How can you calculate the amount of an amortized mortgage payment that will pay the first month's interest?

Principal balance x annual interest rate / 12

What is lis pendens?

Public notice of pending legal action involving real estate

Land, plus all things permanently attached to it. either naturall or artifically is known as

Real estate

Tenant turnover, increases in proptery taxes, and other costs are examples of what?

Risks

If broker A from another firm accepts an offer of subagency from Broker B, the listing broker, to whom does Broker A owe fiduciary duties?

Seller Broker A is a subagent of broker B which means that broker A represents and owes fiduciary duties to broker B's client, the seller.

The DBPR has issued a cease and desist order to Malka. Which of the following is true?

She is unlicensed The DBPR issues citations to discipline licensees. The cease and desist order applies to unlicensed individuals

Which authorized brokergae relationship in FLorida owes the most duties to a client?

Single Agency

What's the first step an appraiser will perform when conducting an appraisal?

State the problem

What type of ownership has the right of survivorship and requires that the co-owners be married when tey take title?

Tenancy by entirety

Which one of the following types of ownership termination allows each tenant to have a specific, divided portion of the property exclusively?

Termination of co-ownership by partition

One element of misrepresentation is that

The person making the false statement knew it was false (or should have known)

When state and federal laws differ, as they sometimes do with fair housing and/or human rights. which of these statements is true?

The state law may not remove rights granted to citizens under the federal law.

WHat does the parol evidence rule say about contracts?

The terms agreed to in a written contract are the only terms relating to that contract.

Daisy and her kids loved their new pool. but Daisy wasn't so happy when she received notice that the general contractor who poured the concrete had placed a lien on her home. Daisy went through her records and discovered that she had never paid the general contractor. What's true about this situation?

This is a legal mechanic's lien.

Whats the role of the primary mortagage market?

To work with borrowers in originating and funding mortgage loans

The Janssens qualify for an FHA-Insured loan. Which of the following can they expect to be added to their closing costs?

UFMIP

Hank leases 150 acres from Sara and Jesse. He has an option contract attached to his lease, with an option to purchase that can be exercised within the next two years. WHat type of contract is this?

Unilateral

What's the capitalization formula used in the income approach?

Value = net operating income dived by cap rate

There are a lot more sellers than buyers in the current market. How does demand influence value?

Value is pushed downward

When does the listing agreement between you and a seller client need to be in writing to be enforacable?

When the term of the listing agreement exceeds one year

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

With the transfer of deed from the seller to the buyer

By when must sales associates and broker associates deliver escrow funds to their broker/employer?

Within the next business day of receipt

The capitalization rate formula is:

net operating income/value=rate (I/V=R) Reverse value(purchase price) x cap rate=net operating income (v x R= I)