REAL ESTATE PRE-LICENSE STUDY GUIDE

Rachel purchased a new home for $350,000 she made a 20% down payment and financed the balance at 5% for 30 years with monthly payments of $1,503.10. How much is the interest portion of her second monthly payment?

$,166.66

A residence recently sold for $120,000 that was rented for $1,100 per month. What is the growth rent multiplier?

$120,000/1,100 =$109

A property that sold for $203,500 was financed with a new mortgage loan of $162,800. What amount must be charged for documentary stamp taxes not he deed is the property is not located in Dade county?

$203,500/100 x .70= $1,424,50

What is the maximum fine amount that FREC may impose for each violation of the F.S. 475?

$5,000

Which real property identifier is assigned by the county property accessor to identify a property?

Assessor's Parcel Number (APN)

How many contractual rights rights can be transferred from one person to another?

Assignment

How are expenses owned by a buyer or seller to third parties on a closing statement?

Debit

Operating expenses for an investment property include all of the following, EXCEPT:

Debt services

A city id in need of additional land for a new school, what right would the city have to acquire the land?

Eminent Domain

After defaulting on mortgage payments but prior to foreclosure the mortgagor has the right to redeem his or her interest int he property by paying the amount owed the lender?

Equity of Redemption

What is the name of the clause found in a mortgage instrument that allows the lender to increase the interest rate based on a certain event?

Escalator clause (escalation clause)

If the property returns to the original grantor when the life estate ends, what type of ownership does the original grantor have?

Estate in Reversion

Which listing best protects a broker with respect to receiving compensation?

Exclusive right of sale

A seller and broker enter into a 6-month agreement where the seller agrees to pay a commission to the broker regardless of who actually sells the property?

Exclusive right of sale listing

A subject property that is being appraised has 4 bedrooms and is beautiful maintained. It has been freshly painted inside and out. The landscaping is well maintained with many trees and colorful flowers. It has hurricane windows and a grand entrance. Next door is a home that has rust stains from the sprinkler water, peeling paint, no flowers, or trees. Bad maintained landscape. What type of depreciation will affect the subject property?

External Obsolescence

A sales associate has decided to concentrate on trying to obtain listings from a particular neighborhood

Farm area

What would a licensee's initial action need to be in order to appeal a final order of the FREC?

File a petition for review with the district court of appeals.

What does an over improved property duffer from?

Functional obsolescence

Which business organization is formed simply by the agreement of the parties

General Partnerships

Some properties are exempt or immune from property taxes. Which type of properties are correctly identified as immune or exempt?

Immune: County court house, airport, school

Which term refers to the physical land and improvements as well as intangible interests and rights?

Real Property

All of the following statements are correct about the Federal "Do not call" list, ExCEPT"

Real estate licensees may solicit for sale by owner for listings even if on the "do not call" list.

Which document does the mortgagee file to document that the mortgage debt has been paid in full?

Satisfaction of mortgage

These are all requirements for a valid instrument of deed conveyance, EXCEPT:

Signature of the grantee

Which of the following business entities can register as a broker?

Sole proprietorship

What does a broker associate mean?

Someone who is a broker who chooses to work for another broker as a sales associate

Which liens are correctly identified as general or specific?

Specific liens: construction and mortgage liens

A contract that transfers an interest in real property must be in writing. Which Doctrine dictated these requirements?

Statute of Fraud

Which statute stipulates the time period during which a party may sue for the enforcement of a contract?

Statute of limitations

A real estate licensee will not show properties in the Ocala area to individuals of a selected minority, this is an example of which prohibited activity?

Steering or Channeling

A buyer enters into a contract with a seller. A week before closing the seller decides that he doesn't want to sell. The seller tells the buyer that he can have his deposit back, but the buyer refuses and will file which type of suit?

Suit for specific performance

What type of tenancy is formed by a written agreement that creates a non-freehold estate providing occupancy of the property for a specified time period?

Tenancy for years

Three persons own a parcel of property with equal rights of use and possession. They have equal interest and acquire their interest by the same or different deeds. What type of ownership did they acquire?

Tenancy in common (Estate in common)

When a sales contract for residential real property includes the "as is" provision which statement correctly applies?

The "as is" does not excuse or circumvent the duty to disclose material defects.

Robert, a Michigan real estate broker, referred a customer to broker Wendy in Tampa with the understanding that Rover will receive a portion of any commission earned, the customer purchased a home with Wendy's assistants. If Robert did not participate int he transaction and Wendy mailed Robert a portion of the commission, what would this conclude?

The Florida Real Estate License Law was not violated.

A real estate licensee working with a seller in limited representation receives a phone call from another agent working with the buyer, the agents opening comments states the following: "Hi, I am Robert Macias with East Side Realty. I am standing in front of a house that has your name on the listing sign and I am with my principal. I have a few questions to ask you about the property." Based on the buyers agents' comments, what should the seller conclude?

The agent representing the buyer is in a single agency relationship.

An applicant's real estate license application was denied

The applicant was NOT a US citizen

Which statement correctly applies to a real estate broker who represents both parties as a single agent in a transaction?

The broker is in Violation of F.S. 475

A sales contract requires a $10,000-secondary deposit to be paid to ABC. Title company by June 1, which is correct regarding the brokers responsibility?

The broker should make a written request to the title company for verification of the deposit within 10 days of the due date.

A buyer notifies the broker that he has lost his job and is unable to close on the property, the buyer requests a return of his deposit. The seller objects and tells the broker that he wants to keep the deposit as payment for damages. What should the broker do in this situation.

The broker should notify the Commission (FREC) of an escrow dispute.

Which statement about the real estate office is true?

The brokerage branch office may be closed and reopened at the same location during the same license period by requesting a reissue.

A homeowner has sidewalks installed by the city and the city charged the owner $500 special assessment. The homeowner was also delinquent in their income tax in the amount of $1,000. A judgement lien was filed. What is the correct order that these liens were paid?

The city will be paid for the sidewalks ahead of all other claims.

Broker Robert places an advertisement on a local website for a property that he has listed. The Ad reads: 4/2 for sale coral springs Florida, Great View, Call Robert 455-12112

This as is a blind ad and violation of the Florida License Law

Sales associate Smith decides to work for ABC. Realty on MWF and for XYZ. Realty on Tuesday, Thursday, and Saturday. Which statement correctly describes this situation?

This is a violation of F.F. 475 because it is illegal to work for more than one broker

A real estate agent that wants to close a deal informs the purchaser that as a house warming present the agent will kickback a portion of the commission, which statement correctly applies to this arrangement?

This is an acceptable arrangement provided full disclosure to all parties is made.

When the ordinance imposes an undue hardship on an owner

Variance

As used by an appraisal what does the term "price" refer too?

the amount received in the transaction.

Which act requires lenders to judge loan applicants on the basis of credit rating, income expenses, and assets. Without regards to their age, race, religion, sex, marital status, or nationality?

(ECOA) The Equal Credit Opportunity Act

What is the price of a sate documentary stamp tax on the deed for property that is located outside of Date county?

.70 per $100 of sales price, or fractional part

A mortgage loan is based on an interest rate of 10% per year and the lender charges 6 discount point. What is the effective yield (APR)?

10.75%

Five investors purchased an investment property and two titled as tenants in common. All of the following statements apply to their legal interests, EXCEPT:

All owners have the right of survivorship.

the northeast 1 quarter of a section in a legal description contains how many acres?

160

The FHA housing expense ratio cannot exceed which of the following limits?

31% and 43%

An investor purchased 3 lots x 150ft for $12 per square foot. The lots were subdivided into four parcels that were sold for $180,000 each. What is the investor percentage of profit?

33%

Which of the following is a characteristic of a township.

6 miles AND 36 sections

In a township, which section is two sections west of section 10?

8

How is prepaid interest on a purchase money mortgage (PMM) shown on a closing statement?

A debit to the buyer and credit to the seller.

An unlicensed individual has been found guilty of operating as a real estate broker in a criminal proceeding, what is the maximum penalty that can be imposed for this activity?

A fine of up to $5,000 and imprisionment for up to 5 years.

What is a transaction broker?

A provider for a limited representation to a buyer, seller, or both.

Which statement is correct concerning agency relationship? (single agency)

A special agent is only authorized to perform a single act on behalf of the principal

Which item will show as a credit to the buyer on the closing disclosure (CD)?

Binder deposit

Paula made a written offer of $78,000 on Peter's home that was listed with broker Alice. Before the offer could be presented, Larry arrived at Alice's office and made an oral offer or $82,000 on the same property but did not give a deposit. Alice promised Larry that she would submit the oral offer but only present the written offer to Peter. Which statement is correct?

Broker Alice should have disclosed the details of the oral offer to Peter when she submitted Paula's Written offer of $78,000

What is the least effective method employment by the federal reserve system to alter the cost and availability of credit?

Changing the discount rate

The promise of future money I- a contract needs which essential element of a valid real estate?

Consideration

Robert died with a will and gave his entire estate to charity including the principal residence that he shred with his family. Which law protects his family from this type of act?

Constitutional homestead rights

ABC real estate Inc. a real estate brokerage corporation has its registration revoked by FREC, which statement correctly descries the licenses of those licensed with the corporation?

They become automatically inactive

The "save our homes" act states that the county property appraisal may increase assessed value of homestead properties each year by which method?

Increasing the assessed value by no more than 3% or the percentage change in the consumer price index, whichever is less.

The act of transferring ownership title or an interest in real property from one person to another is called alienation, alienation may be voluntary or involuntary. Which type of ownership transferred are correctly identified as voluntary or involuntary?

Involuntary, adverse possession, eminent domain and escheat

Which statement best describes a tenancy for years?

It is for a definite period of time

A restaurant has been int he family for many years. The zoning on the street where the restaurant is located has recently been changed to residential duplexes. Why may the restaurant remain?

Legally nonconforming use

Which entity would be a possible source of long-term mortgage money to fund a shopping center?

Life insurance company

A buyer and seller have entered into a contract for the sale of a duplex. The buyer defaults on the contract and the seller claims the escrow deposit for contractual agreements. What would the seller seek to obtain in a suit?

Liquidated damages

The value of a business that is falling and not expected to continue would best be determined using which valuation method?

Liquidation value

Which escrow dispute settlement procedure involves the use of an interpleader?

Litigation

What made a home owner filing an itemized income tax deduct?

Mortgage interest and real estate property taxes

What type of lease exists when a landlord requires the tenant to pay a fixed rent plus taxes, insurance, and maintenance?

Net lease

What is the grace period for a sales associate to complete his or her post license education after the original expiration date?

No grace period

Which statement is correct regarding an individual who has been convicted of a crime

They must disclose all convictions on the real estate license application

Roberta has been notified that her husband will be transferred to the New York office of his office. Roberta currently has a Florida real estate sales associate license. She plans to accompany her husband as a result of the reassignment and would like to keep her license. What is Roberta required to do to continue practicing real estate in Florida?

Notify the Florida Real Estate commission within 60 days of her change in residency and comply with all non-resident requirements.

These are all ways to terminate an offer, EXCEPT:

Novation

What type of lease is it when the tenant is paying a flat fee plus a portion of gross sales to the landlord?

Percentage lease

Peter, a licensed sales associate, was registered with broker Harry when he claimed that Harry has failed to pay a sales commission to him. If Peter resigns and now is employed under broker Norman before the dispute is resolves. Which statement is correct?

Peter cannot bring a legal action for the claim commission against anyone other than Harry.

The concept that stated that an informed buyer will pay no more for a property than the cost of acquiring another equally desirable property with the same or equal utility is based upon which of the following?

Principle of substitution

What will a private lender require the mortgagor to pay on a conventional loan if the loan to value ration is greater than 80%

Private mortgage insurance (PMI)

Which document specifies the amount of the mortgage loan, the interest rate, and repayment schedule?

Promissory note

All of the following are parts of the mortgage loan underwriting process, EXCEPT:

Qualifying the neighborhood where the property is located on ration and economic condition

Which type of deed would best to convey property from the stand point of the grantor?

Quitclaim deed

The highest and best use of a parcel of real estate is the legal and possible use that generated the greatest return on which of the following?

The future use of the land and improvement

In a lien theory estate, who holds title to mortgage real property

The mortgagor

All of the following statements are true regarding a broker's office, EXCEPT:

The office can be located in a modern home provided that the letter heads and advertising of the firm are properly disclosed as an office.

The residential development company, an owner developer just completed several new models in a new development. As a part of a marketing promotion to kick-off the new development any individual that came to see the model will be given a surprise key which if it unlocks the door to the model they will win the home for free. Which statement is correct?

There is nothing illegal with the above promotional program.

A sales contract requires a $10,000-secondary deposit to be paid by June 1, the sales associate forgot to collect the deposit. Which statement correctly applies to this situation?

The sales associate may be charged with culpable negligence

A sales contract had the contingency that the home will be purchased subject to appraisal, the house appraised for $15,000 less than the contract amount, Which caused the financing to be rejected. The buyer attorney noticed the sellers brokers that their client will not be purchasing their property and is requesting a return of the escrow deposit. The broker called the seller and the seller objected to the return of the deposit. Which statement is correct?

The sales contract was clear, and the property was being purchased subject to appraisal therefore the broker may return the escrow money.

A licensee no longer wishes to engage in real estate and surrenders her license.

The status of the license is cancelled

A homeowner defaults on the mortgage, the home owner owes the lender $200,000. The home is sold at a public auction and sale produced $240,000. Where does the surplus amount of the balance due on the promissory note go?

To the mortgagor

Tom, a Florida real estate licensee acting as a buyer, engages the services of another Florida real estate licensee to help him purchase a residential property. Toms agent misrepresented a material fact related to the property causing Tom to lose his deposit. Which statement is correct?

Tom may file a claim against the Florida Real Estate Recovery Fund

A small triplex was purchased. At the time of the loan application the quoted interest was 6.5%. At the time of closing the true interest rate including finance charges came to be 7.5%. The lender did not disclose this to the purchaser. The lender is in violation of which law?

Truth-in-lending act (TILA)