Q&A CRAM EXAM 1 FLORIDA REAL ESTATE

49. What is the maximum fine the Commission could impose against a licensee who was found guilty of two violations of Chapter 475, F.S.? a. $10,000 b. $7,500 c. $5,000 d. $1,000 Reference: Ch. 6, Range of Penalties

a. $10,000

592. Calculate the gross income of an apartment building containing five units: three rented at $350 per month, one rented at $300 per month, and one at $75 per week. a. $20,100 b. $19,800 c. $11,400 d. $8,700

a. $20,100 Gross income = (3 x $350 x 12 months) + ($300 x 12 months) + ($75 x 52 weeks) = $20,100

420. Long-term capital gains can exist when the property has been held for more than how many months? a. 12 b. 18 c. 24 d. 36 Reference: Ch. 17, Real Estate Investment Terminology, Capital Gain/Loss

a. 12

922. What is the term used to refer to the unauthorized use of another's property? a. Encroachment b. Easement c. Reliction d. Variance Reference: Ch. 9, Private Limitations on Property Ownership

a. Encroachment

235. Which is the best definition for "escrow?" a. Holding something for someone else in trust b. Uncollected funds held as earnest money c. The broker's claim on earnest money d. Something of value held by an "interested" third party Reference: Ch. 5, Escrow Account

a. Holding something for someone else in trust

391. Which characteristic is NOT normally taken into account when determining the value of a good? a. Homogeneity of the product b. Transferability of the product c. Scarcity of the product d. Utility of the product Reference: Ch. 15, Characteristics of the Real Estate Market

a. Homogeneity of the product

285. If two or more persons have an undivided interest in real property, which estate cannot be created unless specific wording in the deed provides for the right of survivorship? a. Joint tenancy b. Tenancy in common c. Tenancy by the entireties d. Tenancy at will Reference: Ch. 8, Estates

a. Joint tenancy

303. Mr. Able sold his home to Mr. and Mrs. Baker and gave them a warranty deed. The Bakers moved into the home but did not record the deed. Two days later, Mr. Able died, and his heirs up north sold the property without any knowledge of the previous sale. The heirs conveyed title to Mr. and Mrs. Charles, who did record the deed. Who owns the property? a. Mr. and Mrs. Baker b. Mr. and Mrs. Charles c. Mr. Able's heirs d. The Charles and the Bakers as joint tenants Reference: Ch. 9, Deeds

a. Mr. and Mrs. Baker

356. Which clause in a mortgage allows the borrower to borrow back up to the original loan amount? a. Open end clause b. Prepayment clause c. Reborrowing clause d. Escalation clause Reference: Ch. 12, Essential Elements of a Mortgage

a. Open end clause

646. What type of listing allows the seller to list their home with more than one broker? a. Open listing b. Exclusive listing c. Exclusive right to sell listing d. Exclusive right of sale listing Reference: Ch. 11, Listing Contracts, Types of Listing Contracts

a. Open listing

565. Which business structure holds title to land in its own name? a. Partnership b. Corporation sole c. Syndicate d. Corporation for profit Reference: Ch. 5, Types of Business Formations

a. Partnership

451. Which characteristic of an adjustable rate mortgage limits any single adjustment amount, possibly resulting in negative amortization? a. Payment cap b. Teaser rate c. Index d. Margin Reference: Ch. 13, Loan Repayment Methods, Adjustable Rate Mortgage (ARM)

a. Payment cap

304. In the case of eminent domain, what should the owner expect to receive? a. Payment of fair compensation b. No compensation c. Payment of 50% of market value d. Payment of whatever they feel is appropriate Reference: Ch. 9, Government Limitations on Private Property Ownership

a. Payment of fair compensation

538. A tenant orally makes an offer to lease a house for two years at $600 a month. What makes this offer unenforceable? a. The statute of frauds b. The statute of limitations c. No witnesses d. No binder deposit Reference: Ch. 11, Contracts

a. The statute of frauds

988. A broker has an office using the trade name ABC Realty and Associates. The broker now wishes to use another trade name for a new office: Easy as ABC. Which statement applies? a. This is legal, but the broker would need multiple licensure. b. This is illegal since a broker may only use one trade name. c. This is illegal since Easy as ABC does not indicate it is a real estate office. d. This is legal, but the broker would need a group license. Reference: Ch. 5, Brokerage Office Requirements; Fictitious (or Trade Names)

a. This is legal, but the broker would need multiple licensure.

708. Complete the sentence. The Department (or DBPR) has the authority to issue subpoenas: a. To anyone thought to have knowledge of the case at hand b. To real estate licensees only c. Whenever it deems appropriate d. To any DBPR licensee Reference: Ch. 6, The Disciplinary Process

a. To anyone thought to have knowledge of the case at hand

849. Why does the mortgagor need to execute a note or bond when a lender is making a loan? a. To ensure that the mortgagor is aware of their obligation b. To let the world know that a loan has been given by the lender c. To override the default clause in a mortgage d. For the lender to be able to assess a lien against the mortgagor's property if in default Reference: Ch. 12, Mortgage Theories, and Documents Related to Loans

a. To ensure that the mortgagor is aware of their obligation

163. Closing date is June 8 with the day of closing belonging to the buyer. Annual real estate taxes are $2,730. Using the 365-day method, what prorated amount of taxes will be debited to the seller? a. $957.37 b. $1,181.75 c. $1,548.25 d. $1,772.63 Reference: Ch. 14, Prorating Property Taxes

b. $1,181.75 # Seller days = 31 + 28 + 31 + 30 + 31 + 7 = 158 days; Seller owes: $2,730 ÷ 365 (Daily tax) x 158 days = $1,181.75

697. A buyer purchases a home for $60,000. He obtains an 80% conventional loan at 8.5% interest, with a 2.5% loan origination fee. How much is the origination fee? a. $480 b. $1,200 c. $1,500 d. $4,080 Reference: Ch. 12, Common Mortgage Features, Mortgage Loan Fees - Loan Origination Fee

b. $1,200 Loan amount = $60,000 x 0.80 = $48,000; Origination fee = $48,000 x .025 = $1,200

895. Mrs. Smith purchases two adjacent 60-foot by 120-foot lots at a cost of $2 per square foot. She divides these lots into three lots and sells them at $300 per front foot. What will her percentage of profit be upon sale of the lots? a. 20% b. 25% c. 30% d. 35% Reference: Ch. 17, Calculating Profit on Investment

b. 25% Purchase price = 60 ft. x 120 ft. x $2 per sq. ft. x 2 lots = $28,800; Sale price of each lot = 60 front feet x 2 lots x $300 per front ft. = $36,000; Amount made = $36,000 - $28,800 = $7,200; % Profit = $7,200 (Made) ÷ $28,800 (Paid) = 0.25 or 25%

984. A buyer makes a written offer to purchase. The seller changes the terms or conditions, initials the changes, signs the contract, and sends it back to the offeror. In contract law, what is the seller's changed contract? a. An offer b. A counteroffer c. A binding offer d. Illegal Reference: Ch. 11, Contract Negotiation

b. A counteroffer

710. Who should hold an escrow deposit? a. The broker b. A disinterested third party c. The attorney d. The seller Reference: Ch. 5, Escrow Funds

b. A disinterested third party

647. Complete the sentence. An oral lease, in excess of one year, may also be referred to as: a. Invalid b. A tenancy at will c. A tenancy at sufferance d. A freehold estate Reference: Ch. 8, Estates; Ch. 11, Contracts, Statute of Frauds

b. A tenancy at will

724. How does a broker determine what the selling price should be on a net listing? a. Get the highest possible price b. Add the broker's commission and seller's closing costs to the amount the seller wants to net c. Add 10% to the net amount d. Do nothing, since net listings are illegal in Florida Reference: Ch. 11. Types of Listing Contracts - Net Listings

b. Add the broker's commission and seller's closing costs to the amount the seller wants to net

474. Mr. Smith agreed to sell his house to Mrs. Brown. The closing date was set for October 15. Smith agreed to pay for all charges incurred on the day of closing. The estimated taxes for the year are $4,800. Using the 365-day method, how would the taxes appear on the closing statement? a. Debit buyer $3,787.40, credit seller $3,787.40 b. Debit seller $3,787.40, credit buyer $3,787.40 c. Debit seller $1,012.60, credit buyer $1,012.60 d. Debit buyer $1,012.60, credit seller $1,012.60 Reference: Ch. 14, Section 2 - Prorations and Prepayments Prorating Property Taxes

b. Debit seller $3,787.40, credit buyer $3,787.40 # Buyer days = 31 (Dec) + 30 (Nov) + 16 (Oct) = 77;# Seller days = 365 - 77 = 288; Tax owed by seller = ($4,800 ÷ 365) x 288 = $3,787.40

786. When the mortgagor fulfills all his obligations under the note, what clause protects his rights to the property? a. Cognovit clause b. Defeasance clause c. Subordination clause d. Condemnation clause Reference: Ch. 12, Essential Elements of a Mortgage

b. Defeasance clause

124. The present value of a future cash flow is the basis for which appraisal technique? a. Cost depreciation b. Direct capitalization c. Market data d. Comparable sales Reference: Ch. 16, Three Approaches to Value, Income Approach

b. Direct capitalization

379. With the income approach to appraising, the value of the property today is: a. More than the future value b. Measured in future benefits c. Not considered in an appraisal d. To be paid to the appraiser Reference: Ch. 16, Principles of Value - Principle of Anticipation; Income Approach

b. Measured in future benefits

602. What is the most effective method of describing real property? a. Monuments method b. Metes and bounds method c. Government land survey method d. Lot and block method Reference: Ch. 10, Legal Descriptions

b. Metes and bounds method

346. The buyer receives all of the following items at closing, EXCEPT: a. Deed b. Mortgage c. Opinion of title d. Closing statement Reference: Ch. 12, Parties to a Mortgage

b. Mortgage

623. What must be included in real estate ads and on signs? a. Name of the sales associate b. Name of the brokerage firm c. Name of the seller d. Office phone number Reference: Ch. 5, Brokerage Office Requirements, Office Signs; Advertising

b. Name of the brokerage firm

133. What are ad valorem taxes? a. Special assessment taxes b. Real estate property taxes c. Income taxes d. Quasi-taxes Reference: Ch. 18, Property Tax Assessments

b. Real estate property taxes

427. Through what mechanism does the free enterprise system distribute goods and services in the marketplace? a. Government regulation b. The price system (market mechanism) c. Efficiency d. Production Reference: Ch. 15, The Free Enterprise System

b. The price system (market mechanism)

850. When a deed of trust is involved, who signs the note? a. Trustee b. Trustor c. Beneficiary d. Mortgages Reference: Ch. 12, Mortgage Theories, and Documents Related to Loans, Title Theory of Mortgages

b. Trustor

785. How much is provided by the Homestead Act for the basic tax exemption? a. $15,000 b. $20,000 c. $25,000 d. $30,000 Reference: Ch. 18, Real Estate Tax Exemptions and Limitations, Homestead Tax Exemptions

c. $25,000

807. How many days does the buyer of a new timeshare unit have to cancel the agreement? a. 3 b. 7 c. 10 d. 15 Reference: Ch. 8, Condominiums, Cooperatives, and Timeshares, Provisions of the Timeshare Act

c. 10

279. What does personal property that is permanently attached to the land become? a. An encumbrance b. An attachment c. A fixture d. An encroachment Reference: Ch. 8, Real and Personal Property

c. A fixture

220. In a real estate transaction, what type of relationship can a buyer and seller expect to have? a. A fiduciary relationship b. A relationship of trust c. An arm's length relationship d. A relationship of confidence Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

c. An arm's length relationship

777. A daughter deeded a property to her elderly mother, with the stipulation that the property would return to the daughter upon the mother's death. What type of estate does the daughter possess? a. A life estate b. A remainder estate c. An estate in reversion d. No legal estate Reference: Ch. 8, Estates

c. An estate in reversion

655. Once an offer is accepted and the escrow deposit is in the broker's account, the broker holds the deposit on behalf of which party or parties? a. Seller b. Buyer c. Both the buyer and seller d. The title company Reference: Ch. 5, Escrow Funds, Broker's Rights to Escrowed Funds

c. Both the buyer and seller

590. Which type of business relationship must be in writing? a. Corporations b. Partnerships c. Corporations and limited partnerships d. Joint venture Reference: Ch. 5, Types of Business Formations

c. Corporations and limited partnerships

117. How would an escrow deposit typically appear on a closing statement? a. Credit to seller b. Debit to seller c. Credit to buyer d. Debit to buyer Reference: Ch. 14, Section 1 - Total Purchase Price, Binder Deposit

c. Credit to buyer

549. Multiple claims are made against one licensee's name, all requiring payment from the recovery fund. How is the priority of payment determined? a. Smallest first b. Largest first c. Date of claim d. Proration Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

c. Date of claim

957. Which term best describes foreclosure? a. Voluntary alienation b. A redemption action c. Enforcement of a mortgage d. A procedure taken by the mortgagor Reference: Ch. 12, Default

c. Enforcement of a mortgage

718. Where are the rules of the Florida Real Estate Commission found? a. F.S. 455 b. F.S. 475 c. F.A.C. 61J2 d. F.A.C. 62Q1 Reference: Ch. 3, The Department of Business and Professional Regulation - Authorization and Administration

c. F.A.C. 61J2

296. Under the laws of eminent domain, for what does an individual have the right for reimbursement? a. Personal anguish b. Assessed value c. Fair market value d. Intrinsic value Reference: Ch. 9, Government Limitations on Private Property Ownership - Eminent Domain

c. Fair market value

681. Which statement best describes a quitclaim deed? a. It guarantees that the seller has the right to convey title. b. It is the best deed from the grantee's point of view. c. It does not warrant the title. d. It is the same as a guardian's deed. Reference: Ch. 9, Deeds, Types of Deeds - Quitclaim Deed

c. It does not warrant the title.

822. Where is the right of the broker to accept earnest money on behalf of the seller created? a. Sales contract b. Agency disclosure form c. Listing agreement d. Real estate license law Reference: Ch. 11, Contracts

c. Listing agreement

94. What is the amount of guarantee based upon for a VA guaranteed loan? a. Appraised value b. Assessed value c. Loan amount d. Sale price Reference: Ch. 13, VA Guaranteed Loans

c. Loan amount

525. Sales associate Colleen, who works for broker Coco, was assigned the task of writing real estate advertisements in Coco's office. Is this a violation of F.S. 475? a. Yes, because only brokers can write real estate ads b. Yes, because only the listing sales associate under the direct supervision of the broker can write real estate ads c. No, because any sales associate may write an ad regardless of whether they took the listing or not, provided it is under the direct supervision of the broker and the broker's name appears in the ad d. No, because any sales associate may write an ad with the permission of the employing broker, provided it is under the direct supervision of the broker and the broker's name appears in the ad, and provided also that if a sales associate's name is used in the ad, it is the listing sales associate's name Reference: Ch. 2, Activities Requiring a Real Estate License

c. No, because any sales associate may write an ad regardless of whether they took the listing or not, provided it is under the direct supervision of the broker and the broker's name appears in the ad

939. An administrative complaint is filed against the subject of a FREC investigation. By law, how much notice must the respondent be given before an upcoming formal hearing, unless waived? a. Not less than 20 days b. Not more than 20 days c. Not less than 14 days d. Not more than 14 days Reference: Ch. 6, The Disciplinary Process

c. Not less than 14 days

468. How are property taxes accounted for on a closing statement? a. Debited entirely to the buyer b. Prepaid entirely by the buyer c. Prorated between the buyer and seller d. Debited entirely to the seller Reference: Ch. 14, Section 2 - Prorations and Prepayments

c. Prorated between the buyer and seller

569. Which type of deed is the most favorable from the grantor's point of view? a. Special warranty deed b. Warranty deed c. Quitclaim deed d. Bargain and sale deed Reference: Ch. 9, Deeds, Types of Deeds

c. Quitclaim deed

371. Which type of lending institution is formed by private investment groups to purchase real estate for investment and to make short-term construction and long-term mortgage loans? a. Credit union b. Savings association c. REIT d. Commercial bank Reference: Ch. 13, The Primary Mortgage Market

c. REIT

941. What is the term used for the sixmile wide strip of land that is contained between two meridians? a. Township b. Tier c. Range d. Check Reference: Ch. 10, Government Survey Method, Townships

c. Range

576. The annual percentage rate (APR) includes all of the following, EXCEPT: a. Interest b. Discount c. Real estate taxes d. Finance charges Reference: Ch.13, Laws Regarding Fair Credit and Lending Procedures, Truth-in-Lending Act

c. Real estate taxes

748. Complete the sentence. Trees growing on property are typically considered to be: a. Chattels b. Personal property c. Real property d. None of the above Reference: Ch. 8, Real Property

c. Real property

349. All of the following loans can be first liens, EXCEPT: a. First mortgage b. Home equity loan c. Second mortgage d. Purchase money mortgage Reference: Ch. 12, First Mortgages vs. Junior Mortgages

c. Second mortgage

181. Mary does not have a real estate license and works for AAA Syndicate, which buys, sells, manages, and leases its own property. Mary was hired to lease and sell AAA's property; she is compensated by a salary. Which statement is correct? a. Mary needs a real estate license. b. This activity is okay only if Mary is paid 50% on sales and 50% on leasing. c. There is no violation of F.S. 475. d. This activity is okay only if no more than 50% of Mary's salary is fixed. Reference: Ch. 2, Individuals Who are Exempt from Licensure

c. There is no violation of F.S. 475.

639. How would an owner show marketable title? a. A deed and tax certificate b. An abstract c. Title insurance d. A property tax bill Reference: Ch. 9, Protecting Title

c. Title insurance

953. What is the function of Fannie Mae? a. To insure FHA loans b. To regulate lending terms and policies of member banks c. To purchase existing loans d. To absorb any losses incurred by the Government National Mortgage Association (GNMA) Reference: Ch. 13, The Secondary Mortgage Market

c. To purchase existing loans

114. Which characteristic applies to the note documentary stamp tax? a. Paid by the seller b. $.70 per $100 c. .002 of the loan amount d. $.35 per $100 Reference: Ch. 14, Section 3 - Expenses, State Documentary Tax on a Promissory Note

d. $.35 per $100

263. A seller refuses to accept an offer submitted by a broker on behalf of a buyer. The offer meets the terms of the listing contract. To what is the listing broker entitled? a. No compensation because offer was rejected b. 25% of the full commission c. 50% of the full commission d. 100% of the full commission Reference: Ch. 4, Broker's Right to Compensation; Ch. 11, Listing Contracts

d. 100% of the full commission

388. All of the following are examples of physical depreciation, EXCEPT: a. Peeling paint b. Termites in the woodwork c. Dry rot in the walls d. A garage detached from a single-family home Reference: Ch. 16, Cost-Depreciation Approach

d. A garage detached from a singlefamily home

337. In a lien-theory state, what instrument would be conveyed by the mortgagee to the mortgagor when the mortgage has been paid in full? a. A reconveyance deed b. A notice of redemption c. A quitclaim deed d. A letter of satisfaction Reference: Ch. 12, Mortgage Theories and Documents Related to Loans, Satisfaction of Mortgage

d. A letter of satisfaction

369. All of the following entities may assign a mortgage, EXCEPT: a. Freddie Mac b. A mortgagee c. Fannie Mae d. A mortgagor Reference: Ch. 12, Parties to a Mortgage, Selling the Mortgage Contract; Ch. 13, The Secondary Mortgage Market

d. A mortgagor

129. What is required for a person who represents themselves as a business broker? a. A business sales associate's license b. A business broker's license c. An appraiser's license d. A real estate license Reference: Ch. 17, Business Brokerage

d. A real estate license

355. Which mortgage clause calls for the entire balance to be paid? a. Cognovit clause b. Special-purpose and circumstance clause c. Defeasance clause d. Acceleration clause Reference: Ch. 12, Essential Elements of a Mortgage

d. Acceleration clause

629. If the grantor is insolvent, which of the following deeds would be the best from the buyer's point of view? a. Quitclaim deed b. General warranty deed c. Bargain and sale deed d. Any deed Reference: Ch. 9, Deeds, Types of Deeds

d. Any deed

499. A broker gave a number of business cards to a hotel registration clerk and asked the clerk to refer customers to him. For each customer the clerk refers, the broker promises to pay a fee of $20. What will happen if this fee is paid? a. The broker will be in violation of the law. b. The hotel clerk will not be in violation of the law. c. Neither the broker nor the clerk will be in violation of the law. d. Both the broker and the clerk will be in violation of the law. Reference: Ch. 2, Activities Requiring a Real Estate License; Ch. 4, Broker's Right to Compensation, Referral Fees

d. Both the broker and the clerk will be in violation of the law.

210. John Smith is the broker of ABC Realty. He is preparing to open a branch office. All of the following items are required on the branch office sign, EXCEPT: a. Licensed real estate broker b. ABC Realty c. John Smith d. Branch office Reference: Ch. 5, Brokerage Office Requirements, Office Signs

d. Branch office

374. Which appraisal method values the land separately from the improvements? a. Gross multiplier b. Income c. Comparable sales d. Cost-depreciation Reference: Ch. 16, Three Approaches to Value

d. Cost-depreciation

393. Which condition would NOT indicate functional obsolescence? a. Too few electrical outlets b. A house with one bathroom c. A poor floor plan d. Damaged carpet Reference: Ch. 16, Cost-Depreciation Approach

d. Damaged carpet

625. In a general partnership, each partner does NOT necessarily have which of the following? a. Power to bind the others by their activity b. A share in the management of the business c. Liability for the debts of the partnership d. Equal shares of the profits of the partnership Reference: Ch. 5, Types of Business Formations, General Partnership

d. Equal shares of the profits of the partnership

336. What title does a buyer have when they sign a sales contract (or have purchased under contract for a deed)? a. Ostensible title b. Real title c. Actual title d. Equitable title Reference: Ch. 11, Real Estate Sales Contract; Contract for Deed

d. Equitable title

119. What results in a decrease of land mass? a. Accretion b. Littoral c. Riparian d. Erosion Reference: Ch. 8, Real Property

d. Erosion

861. All of the following types of estates may be mortgaged, EXCEPT: a. Fee simple estate b. Life estate c. Estate for years d. Estate at sufferance Reference: Ch. 8, Estates 862. In a lien-theory stat

d. Estate at sufferance

386. Amenities, or features, used to compare properties in an appraisal could include all of the following, EXCEPT: a. Intangible amenities b. Tangible amenities c. Location d. Ethnic makeup Reference: Ch. 16, Sales Comparison Approach

d. Ethnic makeup

989. A home has a poor interior traffic pattern. What type of adjustment might be applied when valuing the property? a. Physical deterioration b. External obsolescence c. Locational obsolescence d. Functional obsolescence Reference: Ch. 16, Cost-Depreciation Approach

d. Functional obsolescence

131. Which asset is the most difficult to set a dollar value on for a business? a. A leasehold estate b. Existing equipment c. Corporate stock d. Goodwill Reference: Ch. 17, Accounting Terms - Assets

d. Goodwill

302. Which set of terms is NOT synonymous? a. Vendee, purchaser b. Mortgagee, lender c. Lessor, landlord d. Grantee, seller Reference: Ch. 9, Leases; Ch. 9, Deeds; Ch. 11, Real Estate Sales Contracts; Ch. 12, Parties to a Mortgage

d. Grantee, seller

290. Which statement accurately describes an owner's title insurance policy? a. It is transferable. b. It covers the amount of the mortgage. c. It guarantees against all defects and encumbrances. d. It guarantees against all defects and encumbrances to which no exception has been taken. Reference: Ch. 9, Title Insurance

d. It guarantees against all defects and encumbrances to which no exception has been taken.

199. Jeff is the owner of a building that is leased to Craig. If Jeff sells the building, what is the status of the lease? a. It becomes a tenancy at will b. It must be renewed c. It is terminated d. It is binding on the new owner Reference: Ch. 8, Non-freehold (Leasehold) Estates

d. It is binding on the new owner

230. What must be included on a real estate brokerage sign? a. Sales associate's name b. Office phone number c. Brokerage firm's license number d. Name of the brokerage firm Reference: Ch. 5, Office Signs

d. Name of the brokerage firm

185. Which action would cause an applicant's request for licensure be denied without prejudice? a. Cheating on the state exam b. Having been convicted of fraud c. Having been disbarred from the legal profession d. Omitting one or more answers to questions on the application Reference: Ch. 2, Application Approval or Denial

d. Omitting one or more answers to questions on the application

308. Which of the following is a characteristic of a parol contract? a. In writing b. Signed by two witnesses c. Covered by statue of frauds d. Oral Reference: Ch. 11, Contracts

d. Oral

766. A broker had a listing in which part of it was oral and part of it was written and signed above the initials "L.S.," but all parties understood all of the terms and conditions and agreed to them. Which best describes this agreement? a. Parol b. Formal c. Unilateral d. Parol and formal Reference: Ch. 11, Contracts, Classification of Contracts

d. Parol and formal

390. Who must pay any points that are due on a VA guaranteed loan? a. Seller b. Buyer c. Lender d. Party specified in the contract Reference: Ch. 13, VA Guaranteed Loans

d. Party specified in the contract

358. Which mortgage clause permits the mortgagee to have a third party appointed to collect income and manage the property until foreclosure proceedings have been accomplished? a. Personal representative clause b. Administrator's clause c. Redemption clause d. Receivership clause Reference: Ch. 12, Essential Elements of a Mortgage

d. Receivership clause

927. Which clause in a deed would include the deed restrictions? a. Premises b. Granting c. Habendum d. Reddendum Reference: Ch. 9, Clauses in Deeds

d. Reddendum

406. What is the opposite of N10°E? a. N90°W b. S40°E c. N10°W d. S10°W Reference: Ch. 10, Surveyor's Method

d. S10°W

352. What is included in the annual percentage rate (APR)? a. Annual interest b. Finance charge c. Simple annual interest d. Simple annual interest plus finance charges Reference: Ch. 13, Truth-in-Lending Act

d. Simple annual interest plus finance charges

964. If a seller lists a house with a broker and discriminates against a buyer based on religion, the seller would have violated which regulation? a. F.S. 475 b. The Truth-in-Lending Act c. The Civil Rights Act of 1866 d. The Civil Rights Act of 1968 Reference: Ch. 7, Federal Housing Laws

d. The Civil Rights Act of 1968

663. A real estate sales associate may accept commissions from which of the following? a. A buyer b. A seller c. A mortgage broker d. The sales associate's employer Reference: Ch. 5, Sales Associate's Duties, Compensation

d. The sales associate's employer

401. Which government survey legal description is the closest to the Tallahassee Principal Meridian? a. Tier 2 S, Range 3 E b. Tier 1 N, Range 4 W c. Tier 2 N, Range 2 E d. Tier 4 S, Range 1 E Reference: Ch. 10, Government Survey Method

d. Tier 4 S, Range 1 E

64. Three friends buy a property together with equal shares at the same time. If they have the right of survivorship, what type of tenancy have they created? a. Joint tenancy b. Tenancy in common c. Tenancy for years d. Tenancy by the entireties Reference: Ch. 8, Estates

a. Joint tenancy

2. How is a real estate appraiser typically paid? a. A fee based upon seniority b. A fee based upon time and difficulty of the appraisal c. A fee based upon the value of the property appraised d. A commission based upon the value of the property Reference: Ch. 1, Appraising

b. A fee based upon time and difficulty of the appraisal

43. Who has the right to file a complaint against a licensee with the DBPR? a. FREC b. Anyone c. DRE d. DBPR Reference: Ch. 6, The Disciplinary Process

b. Anyone

48. Where must the appeals of FREC final orders be filed? a. Circuit Court of Appeals b. District Court of Appeals c. Offices of the Association of REALTORS d. Offices of the Department of Financial Services Reference: Ch. 6, The Disciplinary Process

b. District Court of Appeals

59. Under the Truth in Lending Act, in credit advertising, which would not be considered a "triggering term"? a. $1,500 down b. Easy terms c. 6% interest d. 10% down Reference: Ch. 13, Laws Regarding Fair Credit and Lending Procedures, Triggering Terms

b. Easy terms

33. A broker sells a rental list to a prospective tenant for $200. In a written agreement, the broker states that the fee is nonrefundable. This is: a. Legal because it was disclosed in advance b. Illegal under F.S. 475 c. Legal but not ethical d. Legal because the fee was less than $500 Reference: Ch. 5, Rental Information

b. Illegal under F.S. 475

70. What would the best bundle of rights with a timeshare include? a. Right to use b. Interval ownership c. Membership d. Leasehold Reference: Ch. 8, Timeshare Ownership

b. Interval ownership

39. When there is a dispute over escrow funds, the procedures include four choices. Which choice involves a third person recommending a solution? a. Arbitration b. Mediation c. Litigation d. Escrow disbursement order Reference: Ch. 5, Dispute Settlement Procedures

b. Mediation

91. What is stated in the statute of limitations? a. The sentencing guidelines for violations of the law b. The time frame in which a contract can be enforced c. To be enforceable, real estate contracts must be written d. Contracts must be notarized to be enforceable Reference: Ch. 11, Statute of Limitations

b. The time frame in which a contract can be enforced

57. A developer advertises homes for sale with a total down payment of $1,500. The developer knows that all of the houses with that amount of down payment have been sold. Is this transaction covered under truth-in-lending laws? a. No, because the advertising was done by a builder/developer, not a broker b. Yes, because this is bait and switch advertising and is illegal c. No, because single-family residence is exempt from Regulation Z d. Yes, because this is puffery and is illegal Reference: Ch. 5, False Advertising; Ch. 13, Laws Regarding Fair Credit and Lending Procedures

b. Yes, because this is bait and switch advertising and is illegal

42. What is the maximum criminal penalty that a court could impose for a second-degree misdemeanor? a. $2,000 fine and/or two years in jail b. $1,000 fine and/or one year of jail time c. $500 fine and/or 60 days of jail time d. $5,000 fine and/or five years in jail Reference: Ch. 6, Criminal Penalties

c. $500 fine and/or 60 days of jail time

45. What is the maximum number of years that FREC may suspend a real estate license? a. 3 b. 5 c. 10 d. 15 Reference: Ch. 6, Range of Penalties - Suspension

c. 10

98. What is it called when a buyer buys a property and takes over responsibility on an existing loan? a. Agreement for deed b. Subject to the mortgage c. Assumption of the mortgage d. Any of the above Reference: Ch. 12, Sale of Mortgaged Property

c. Assumption of the mortgage

54. Telling homeowners that minority families are moving into their neighborhood in an attempt to get them to sell their home and move is referred to as which of the following? a. Steering b. Redlining c. Blockbusting d. Boycotting Reference: Ch. 7, Federal Fair Housing Act

c. Blockbusting

80. Private restrictions are enforced by private citizens. Which of the following is the strongest control they have over a property owner? a. Leases b. Easements c. Deed restrictions d. Liens Reference: Ch. 9, Private Limitations on Property Ownership

c. Deed restrictions

30. Sales associate Glenn works for broker John. If Glenn receives an escrow deposit on Tuesday, what should he do? a. Deliver it to his broker by Friday (third business day) b. Hold deposit until contract is accepted c. Deliver it to his broker immediately (next business day) d. Deliver it to his escrow account immediately Reference: Ch. 5, Depositing Escrow Funds

c. Deliver it to his broker immediately (next business day)

72. What term refers to the power that the government has to take land for the public good? a. Encumbrance b. Escheat c. Eminent domain d. Easement Reference: Ch. 9, Methods of Acqu

c. Eminent domain

41. Complete the sentence. If a licensee does not dispute a citation, it has the same effect as a: a. Cease and desist order b. Reprimand c. Final order d. Formal complaint Reference: Ch. 6, Citation Authority

c. Final order

29. What must all advertising of listed property contain? a. Name of the sales associate b. Telephone number for the brokerage firm c. Name of the brokerage firm d. Telephone number of the sales associate Reference: Ch. 5, Advertising

c. Name of the brokerage firm

31. A broker may hold escrow deposits in any of the following, EXCEPT: a. A savings association b. A commercial bank c. A credit union d. A mutual fund Reference: Ch. 5, Escrow Funds, Escrow Account

d. A mutual fund

4. What is it called when a developer gives land to a governmental body? a. Eminent domain b. Condemnation c. Lis pendens d. Dedication Reference: Ch. 1, Construction and Development

d. Dedication

61. A property that borders a river or stream includes which rights? a. Allodial b. Alluvial c. Littoral d. Riparian Reference: Ch. 8, Real and Personal Property

d. Riparian

34. A sales associate wants to use a trade or fictitious name. Which statement applies? a. The name must be registered with the county clerk. b. The name must be registered with FREC. c. This would violate F.S. 475. d. The name must be registered with the secretary of state. Reference: Ch. 5, Fictitious (or Trade) Names

c. This would violate F.S. 475.

90. What does the statute of frauds require? a. Lawsuits about oral contracts must be filed within four years b. All contracts must be in writing c. To be enforceable, a contract transferring an interest in real estate must be in writing d. Violations are punishable by fines not to exceed $1,000 Reference: Ch. 11, Statute of Frauds

c. To be enforceable, a contract transferring an interest in real estate must be in writing

841. A property is described as follows. The point of beginning is described with a cement monument. All of the other points are arrived at by angles and directions until you return to the point of beginning. Which method of legal description has been employed? a. Metes and bounds method b. Lot and block method c. Government land survey method d. Assessor's method Reference: Ch. 10, Property Description Methods

a. Metes and bounds method

223. Which term refers to the misstatement, omission, or concealment of a factual matter? a. Misrepresentation b. Conspiracy c. Conversion d. Puffery Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

a. Misrepresentation

370. All of the following are primary lenders, EXCEPT: a. Mortgage loan originators b. Commercial banks c. Life insurance companies d. Savings associations Reference: Ch. 13, The Primary Mortgage Market

a. Mortgage loan originators

810. Primary lenders originate loans and include all of the following, EXCEPT: a. Mortgage loan originators b. Commercial banks c. Savings associations d. Life insurance Reference: Ch. 13, The Primary Mortgage Market

a. Mortgage loan originators

660. Larry, Moe, and Curly form a partnership by oral agreement. Moe and Curly buy a property and sign a contract under the partnership name. Which applies? a. Only Moe and Curly are liable. b. All three are liable. c. The partnership is liable. d. No one is liable. Reference: Ch. 5, Types of Business Formations, General Partnership

b. All three are liable.

942. Which process refers to sand deposits that build up on the shoreline as a result of accretion? a. Erosion b. Alluvion c. Addition d. Littoral Reference: Ch. 8, Real and Personal Property, Real Property

b. Alluvion

299. Where do special assessment liens on property rank in priority of payment? a. After private liens b. Ahead of private liens c. Ahead of real property tax liens d. Ahead of all liens Reference: Ch. 9, Liens

b. Ahead of private liens

278. Which of the following shares of real property will a widow with no children receive at her husband's death in the absence of a will? a. One-third b. All c. One-half d. Life estate Reference: Ch. 8, Elective Share

b. All

339. What part of an amortized mortgage payment reduces the principal balance? a. Debt service b. Amortization c. Interest d. Principal and interest Reference: Ch. 13, Amortized Mortgage

b. Amortization

282. Which type of estate refers to the lessor's interest in leased property? a. An estate for years b. An estate in reversion c. An estate by the entireties d. A leasehold estate Reference: Ch. 8, Estates

b. An estate in reversion

226. When moving from one branch office to another, what must a broker do? a. Send in the old branch office registration with a request for transfer b. Apply for and obtain a new registration for the new branch and pay the proper fee c. Change the address on his branch office registration certificate d. Be at least five miles from the main office Reference: Ch. 5, Branch Office Requirements

b. Apply for and obtain a new registration for the new branch and pay the proper fee

76. How is a quitclaim deed most often used? a. As a tax deed b. As a way to clear clouds on title c. As a personal representative's deed d. As a guardian's deed Reference: Ch. 9, Types of Deeds

b. As a way to clear clouds on title

617. What are real estate taxes are based upon? a. Market value b. Assessed value c. Appraised value d. Salvage value Reference: Ch. 18, Property Tax Assessments

b. Assessed value

943. What is the term used for the buyer of a mortgage in the secondary mortgage market? a. Assignor b. Assignee c. Vendor d. Vendee Reference: Ch. 12, Sale of Mortgaged Property, Selling the Mortgage Contract; Ch. 13, The Secondary Mortgage Market

b. Assignee

666. Under which agreement does a party give up all of their rights under a lease? a. Sublease b. Assignment c. Transfer of entitlement agreement d. Release of lien Reference: Ch. 9, Leases, Assignment, and Sublease

b. Assignment

683. Which business structure makes all principals personally responsible for any debts incurred in the name of the entity? a. Corporation b. Partnership c. Limited partnership d. Joint venture Reference: Ch. 5, Types of Business Formations

b. Partnership

429. Building activity is related to the business cycle. When in the expansion phase of the business cycle, what is the next phase? a. Contraction b. Peak c. Revival d. Recovery Reference: Ch. 15, The Business Cycle

b. Peak

88. Which action can terminate a contract? a. Novation b. Performance c. Rejection d. Subrogation Reference: Ch. 11, Contract Termination

b. Performance

840. Which survey method should be used when there are recorded subdivisions? a. Metes and bounds method b. Plat method c. Government land survey method d. Monuments method Reference: Ch. 10, Property Description Methods

b. Plat method

641. Under what authority are cities and counties allowed to enact zoning ordinances? a. The local planning commission b. Police power c. Eminent domain d. F.S. 475 Reference: Ch. 9, Limitations on Property Ownership

b. Police power

120. What is the description of the township located due east of T4N, R3W? a. T4N, R4W b. T4N, R2W c. T3N, R2W d. T5N, R4W Reference: Ch. 10, Government Survey Method

b. T4N, R2W

734. A seller and a broker make an agreement that the broker may receive 100% of the deposit if the buyer defaults. In this locality, a 50/50 split of forfeited deposits is customary. What may the broker do? a. Take only 50% b. Take 100% c. Take only their customary commission d. Nothing, but they may be disciplined for unfair business practice Reference: Ch. 4, Broker's Right to Compensation, Payment of Commission; Ch. 11, Contracts

b. Take 100%

277. Which tenancy exists when a tenant remains in possession of a property after the termination of the lease without the landlord's agreement? a. Tenancy at will b. Tenancy at sufferance c. Tenancy for years d. Tenancy in common Reference: Ch. 8, Estates

b. Tenancy at sufferance

289. Which estate or tenancy shows an ownership interest in land? a. Tenancy for years b. Tenancy in common c. Tenancy at will d. Estate for years Reference: Ch. 8, Estates

b. Tenancy in common

552. Three members of a family purchase property without the right of survivorship. One family member dies. What type of estate do the two remaining members have? a. Joint tenancy b. Tenancy in common c. Tenancy by the entireties d. 100% fee simple ownership together Reference: Ch. 8, Estates

b. Tenancy in common

819. Adam, Bob, and Chris form a partnership to buy property. What would the ideal form of ownership be from Chris' family's point of view? a. Tenancy at will b. Tenancy in common c. Joint tenancy d. Life tenancy Reference: Ch. 8, Estates

b. Tenancy in common

761. Jack and Jane each purchased 50% interest in the same building, at different times. What are the two owners considered to be? a. Joint tenants b. Tenants in common c. Tenants at sufferance d. Tenants in severalty Reference: Ch. 8, Estates

b. Tenants in common

696. If 350 feet of fence costs $1,575.00, what is the cost for 500 feet of fence? a. $3,150.00 b. $2,289.29 c. $2,250.00 d. $1,686.11

c. $2,250.00 Cost per foot = $1,575.00 ÷ 350 feet = $4.50 per foot; 500 ft. x $4.50 = $2,250

27. In which instance must the agency disclosure forms developed by the state be used? a. Commercial leasing b. Residential leasing c. Residential sales d. Residential auctions Reference: Ch. 4, Brokerage Relationship Disclosure Act

c. Residential sales

996. Brown owns an apartment complex with 24 units that produce a net monthly rent of $8,500. This $8,500 per month represents a 9.5% annual return to the owner. What did Brown pay for the building? a. $1,073,684 b. $1,048,325 c. $89,474 d. $9,690 Reference: Ch.15, Income Approach

a. $1,073,684 Annual income = $8,500 monthly rent x 12 months = $102,000; Value = $102,000 Income ÷ 0.095 Rate = $1,073,684

462. What would the value of a homestead exemption be for a property assessed at $285,000, if the city tax rate is nine mills, the county rate is eight mills and the school board rate is ten mills? a. $1,100 b. $560 c. $480 d. This question cannot be answered as the school board rate exceeds the cap. Reference: Ch. 18, Calculating a Real Estate Tax Levy

a. $1,100 Basic exemption = $25,000 x .027 = $675; 2nd exemption = $25,000 x .017 (city and county only) = $425; Total exemptions = $675 + $425 = $1,100

825. A court awarded a judgment to Mr. and Mrs. Brown against broker Smith for $30,000 that included $20,000 of actual damages and $10,000 of punitive damages. The bankruptcy court ordered Smith to pay $7,000. How much will the Real Estate Recovery Fund pay? a. $13,000 b. $23,000 c. $25,000 d. $30,000 Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

a. $13,000

173. An investor purchased an office building for $655,000, with acquisition costs of $42,300. If the building represents 80% of the cost, what is the annual IRS depreciable allowance? a. $14,303.59 b. $16,794.87 c. $23,818.18 d. $25,356.36 Reference: Ch. 17, Depreciation

a. $14,303.59 Total acquisition cost = $655,000 + $42,300 = $697,300; Basis for depreciation = $697,300 (Total acquisition cost) x .80 = $557,840; Annual depreciation allowance = $557,840 (Basis for depreciation) ÷ 39 years (Nonresidential investment property) = $14,303.59

437. A mortgage is $55,000 with 12% interest for 30 years, and monthly payments of $565.74. If the loan is held to maturity, how much interest would the borrower have paid? a. $148,666.40 b. $198,000.00 c. $203,666.40 d. $403,333.33 Reference: Ch. 13, Amortizing Loan Payments

a. $148,666.40 Total paid = $565.74 x 30 years x 12 months = $203,666.40; Total interest paid = $203,666.40 (Total paid) - $55,000 (amount borrowed) = $148,666.40

46. For multiple claims against a licensee, what is the maximum reimbursement from the Florida Real Estate Recovery Fund? a. $150,000 b. $50,000 c. $25,000 d. $15,000 Reference: Ch. 6, Florida Real Estate Recovery Fund

a. $150,000

445. A building cost $55 per square foot to build today but cost $45 per square foot to build when it was new ten years ago. It was kept in good condition and appears to be only seven years old. It contains 3,000 square feet. The lot measures 100 feet by 120 feet and comparable sites are selling for $3.10 per square foot. Site improvements are valued at $4,000. Using a 35-year useful life, estimate the value of the property. a. $173,200 b. $159,057 c. $149,200 d. $137,629 Reference: Ch. 16, Cost-Depreciation Approach

a. $173,200 Total depreciation rate = Effective age ÷ Total economic life = 7 ÷ 35 = 0.2; Reproduction costs = 3,000 x $55 = $165,000; Total accrued depreciation over life = Reproduction cost x Total depreciation rate = $165,000 x 0.2 = $33,000; Value of building = Reproduction cost - Total accrued depreciation over life = $165,000 - $33,000 = $132,000; Value of land and improvements = $4,000 + (100 x 120 x $3.10) = $41,200; Value of property = $132,000 + $41,200 = $173,200

991. A commercial building is 15% vacant but still has 85,000 square feet rented out. The municipality has taxed the owner of the property at a rate $.20 per square foot under the roof. What are the annual taxes on the property? a. $20,000 b. $17,000 c. $3,000 d. $2,550 Math Concept: Find the total square feet and multiply by the tax rate.

a. $20,000 Total square feet x .85 = 85,000 square feet, so Total sq. ft. = 85,000 ÷ 0.85 = 100,000 sq. ft.; Tax = 100,000 sq. ft. x $.20 = $20,000

464. A buyer purchases Mr. Orange's home for $190,000, assuming the first mortgage, which covers 80% of the purchase price. Mr. Dis Count, a licensed mortgage loan originator, arranges a second mortgage for 46% of the difference. Mr. Dis Count wants 2½ points as an origination fee. What will the total down payment be, including the origination fee? a. $20,957 b. $17,480 c. $14,145 d. $437 Reference: Ch. 12, Mortgage loan Fees

a. $20,957 1st mortgage = $190,000 x 80% = $152,000; 2nd mortgage = ($190,000 - $152,000) x 46% = $17,480; Total loans = $152,000 + $17,480 = $169,480; Origination fee on 2nd mortgage = $17,480 x 2.5% = $437; Down payment = ($190,000 - $169,480) + $437 = $20,957

447. An investment property has 60 identical units. It can have an income of $566,000 annually. It has a monthly operating expense of $20,000 and 3% of potential gross income is in reserve. The usual vacancy is three units per month. How much is the net operating income (NOI)? a. $280,720 b. $306,662 c. $308,234 d. $500,720 Reference: Ch. 16, Income Approach, Direct Capitalization Technique

a. $280,720 V&C = ($566,000 ÷ 60) x 3 = $28,300; Reserves = $566,000 x 3% = $16,980; NOI = ($566,000 - $28,300) - ($20,000 x 12 months) - $16,980 = $280,720

893. An apartment building has expenses of $700,000, effective gross income of $1,000,000 and a cap rate of 8%. What is its value? a. $3,750,000 b. $8,750,000 c. $12,500,000 d. $80,000,000 Reference: Ch. 16, Income Approach, Direct Capitalization Technique

a. $3,750,000 NOI = $1,000,000 (EGI) - $700,000 (OE) = $300,000; Value = $300,000 (NOI) ÷ 0.08 (Cap rate) = $3,750,000

815. A broker has an escrow account for his property management firm. How much of the broker's own money can be deposited to open and maintain the account? a. $5,000 b. $1,000 c. $200 d. $0 Reference: Ch. 5, Escrow Account

a. $5,000

897. Three-bedroom, two-bath homes in an area rent for $450 per month. In the same area, three-bedroom/onebath homes rent for $400 per month. If the GRM is 120, what is the estimated value of a bathroom? a. $6,000 b. $5,500 c. $5,000 d. $4,167 Reference: Ch. 16, Income Approach, Gross Multiplier Technique

a. $6,000 Price (3-2) = $450 (Gross monthly rent) x 120 (GRM) = $54,000; Price (3-1) = $400 (Gross monthly rent) x 120 (GRM) = $48,000; Bathroom = $54,000 - $48,000 = $6,000

463. It costs the city $20 per foot to pave the road in front of a 100-foot lot. The city has agreed to pay for 30% of the cost. What would be the amount of the special assessment tax? a. $700 b. $1,000 c. $1,400 d. $2,000 Reference: Ch. 18, Special Assessments

a. $700 Assessment = 100 front-feet x $20 x 70% Owner's share ÷ 2 Sides of the street = $700

799. If a family could qualify to buy a home worth 2 ½ times their annual income, what price home could they afford to buy if they earned $550 per week? a. $71,500 b. $66,000 c. $28,600 d. $26,400 Math Concept: Affordable price is equal to 2.5 x their current annual income.

a. $71,500 Annual income = $550 x 52 weeks = $28,600; Affordable price = $28,600 (Annual income) x 2.5 = $71,500

692. A property is purchased based on a $50,000 a year income, with a 15% cap rate (yield). If the new owner can sell the building based on a 12% yield, what would be his profit? a. $83,334 b. $60,000 c. $15,000 d. $6,000 Reference: Ch. 16, Income Approach, Using the IRV Formula to Derive Capitalization Rates

a. $83,334 Value with 15% cap rate = $50,000 (Income) ÷ 0.15 (Rate) = $333,333; Value with 12% cap rate = $50,000 (Income) ÷ 0.12 (Rate) = $416,667; Profit = $416,667 - $333,333 = $83,334

995. A comparable property sold two years ago for $80,000. Since then, properties have been appreciating at 5% annually. How much would the comparable property be worth today? a. $88,200 b. $88,000 c. $86,000 d. $84,000 Reference: Ch. 16, Sales Comparison Approach

a. $88,200 1st year: $80,000 + ($80,000 x 0.05) = $84,000; 2nd year: $84,000 + ($84,000 x 0.05) = $88,200

699. Mrs. Brown owns a 100-acre tract in Dade County. She wants to sell 20 lots, with each containing 21,780 square feet. How many acres will she be selling? a. 10 b. 15 c. 17 d. 20 Reference: Ch. 10, Common Area Measurements

a. 10 Total square feet = 20 lots x 21,780 sq. ft. = 435,600 sq. ft.; Convert to acres: 435,600 sq. ft. ÷ 43,560 sq. ft. per acre = 10 acres

450. If a property was purchased for $200,000 with a $30,000 down payment and the PGI is $50,000, vacancies are 5% and the expenses are $25,500 (which includes $2,000 in reserves). What is the cap rate or capitalization rate? a. 11.0% b. 11.6% c. 12.9% d. 22.5% Reference: Ch. 16, Income Approach, Direct Capitalization Technique

a. 11.0% V&C = $50,000 x 5% = $2,500; NOI = ($50,000 - $2,500) - $25,500 = $22,000; Cap rate = $22,000 ÷ $200,000 = 0.11 or 11%

85. The southeast corner of Section 31, Township 1 North, Range 3 West, is how many miles from Tallahassee? a. 17 b. 18 c. 23 d. 24 Reference: Ch. 10, Government Survey Method

a. 17 Each township is 6 miles wide, so the west-most edge of "Range 3 West" is 18 miles (6 mi. x 3 West) from Tallahassee. But the SE corner of Section 31 is one additional mile east, so the distance is 18 - 1=17 miles.

425. What is the maximum interest rate on a tax certificate? a. 18% b. 10% c. 9% d. 5% Reference: Ch. 18, Paying the Tax Levy, Tax Certificate Sale

a. 18%

599. A developer is building a subdivision on a 20-acre tract. The subdivision will have 40 equal size lots. Ten percent of the total tract will be allowed for a common recreation area. With access roads totaling 20 feet by 600 yards, how many square feet are contained in each lot? a. 18,702 square feet b. 19,602 square feet c. 20,000 square feet d. 21,780 square feet Reference: Ch. 10, Common Area Measurements

a. 18,702 square feet Concert acres to sq. ft.: 20 acres x 43,560 sq. ft. per acre = 871,200 sq. ft.; Recreation area = 871,200 x 0.10 = 87,120 sq. ft.; Access roads = 20 ft. x (600 yds. X 3 ft. per yd.) = 36,000 sq. ft.; Total for lots = (871,200 - 87,120) - 36,000 = 748,080 sq. ft.; Each lot = 748,080 ÷ 40 lots = 18,702 sq. ft.

138. Failure to pay property taxes will lead to the sale of tax certificates. In order to force the sale of the property, how many years must the investor wait? a. 2 b. 3 c. 5 d. 7 Reference: Ch. 18, Paying the Tax Levy, Tax Certificate Sale

a. 2

977. How many acres are contained in the NE 1/4 of the SW 1/4 of the SE 1/4 of the NE 1/4 of Section 9, Township 23 S, Range 32 E? a. 2 1/2 acres b. 5 acres c. 10 acres d. 13 acres Reference: Ch. 10, Calculating the Acreage in a Parcel from a Legal Description

a. 2 1/2 acres 640 acres ÷ 4 ÷ 4 ÷ 4 ÷ 4 = 2.5 acres

443. If 10,000 new households are expected in an area over the next five years, and each household will use about 1/4 acre of land, how many additional acres will the community have to service? a. 2,500 b. 5,000 c. 7,500 d. 12,500 Math Concept: Find the number of quarter acres for 10,000 households.

a. 2,500 ¼ = .25, so Additional acres = 10,000 x 0.25 acres = 2,500 acres

152. A property manager of an office building leases 2,500 square feet of space to a doctor's office, which is 12.5% of the total space. What is the total square footage of the building? a. 20,000 b. 40,000 c. 100,000 d. 200,000

a. 20,000 Total x 12.5% = 2,500, so Total = 2,500 ÷ .125

900. A square piece of property measures 938 feet around the perimeter. What are the dimensions of the property? a. 234.5 feet by 234.5 feet b. 469 square feet c. 234.5 square feet d. 269 feet by 200 feet Math Concept: Perimeter ÷ 4 Sides = Length of each side

a. 234.5 feet by 234.5 feet 938 ft. ÷ 4 sides = 234.5 ft. per side; Dimensions = 234.5 ft. by 234.5 ft., which is 54.990.25 sq. ft. (234.5 x 234.5)

790. The tax is excluded on the capital gain from the sale of a personal residence if it was the principal residence for at least how long? a. 24 months b. 12 months c. 18 months d. 36 months Reference: Ch. 18, The Effect of Federal Income Taxes on Homeownership - Sale of Principal Residence

a. 24 months

399. Residential investment property is depreciated over a useful life of how many years? a. 27.5 years b. 31.5 years c. 39 years d. 17.5 years Reference: Ch. 17, Impact of Federal Taxation, Depreciation

a. 27.5 years

597. Current tax laws allow owners of investment properties to depreciate a portion of their investment over what period of time for the types of property listed? a. 27.5 years for residential properties and 39 years for non-residential properties b. 27.5 years for non-residential properties and 39 years for residential properties c. 27.5 years for all investment properties d. 39 years for all investment properties Reference: Ch. 17, Impact of Federal Taxation, Depreciation

a. 27.5 years for residential properties and 39 years for non-residential properties

126. What method can be used to depreciate residential real estate purchased after 1986? a. 27.5 years straight-line b. 39 years straight-line c. 27.5 years double declining d. 39 years double declining Reference: Ch. 17, Impact of Federal Taxation, Depreciation

a. 27.5 years straight-line

805. How many days does a buyer of a resale condominium have to cancel the agreement? a. 3 b. 7 c. 10 d. 15 Reference: Ch. 8, Condominiums, Cooperatives, and Timeshares, Condominiums

a. 3

465. The quoted interest rate on a conventional loan is 12.5%, but after allowing for the origination fee, the true APR is 13%. Approximately how many points did the bank charge for the loan? a. 4 b. 5 c. 6 d. 8 Reference: Ch. 12, Mortgage Loan Fees - Effective Yield

a. 4 Rule of thumb Æ each point charged adds 1/8%; Amount added = 13 - 12.5 = .5 or 1/2; 1/2 = 4/8, or (4 x 1/8) or 4 points

409. How many acres are in the following: The NW 1/4 of the NW 1/4 of the SW 1/4 of the SW 1/4 and the SW 1/4 of the SW 1/4 of the NW 1/4 of the SW 1/4 of Section 27. a. 5 acres b. 2.5 acres c. 1.25 acres d. Approximately .001 acre Reference: Ch. 10, Calculating Acreage in a Parcel Containing Contiguous Tracts

a. 5 acres Tract 1: 640 ÷ 4 ÷ 4 ÷ 4 ÷ 4 = 2.5 acres; Tract 2: 640 ÷ 4 ÷ 4 ÷ 4 ÷ 4 = 2.5 acres. Total = 2.5 acres (Tract 1) + 2.5 acres (Tract 2) = 5 acres

793. A property has a net operating income of $20,000.00, and $15,000 in expenses that includes $2,000.00 in property taxes. If property taxes were to increase by 45%, by what percentage will the expenses increase? a. 6.0% b. 5.3% c. 4.5% d. 2.5% Reference: Ch. 16, Three Approaches to Value, Income Approach

a. 6.0% Increased taxes = $2,000 x 1.45 = $2,900, which is an increase of $900. Percentage increase in expenses = $900 ÷ $15,000 = 0.06, or 6%.

903. With whom can a broker share a commission? a. A New Jersey broker who has not violated any Florida laws b. A person who gave a referral c. An attorney d. An auctioneer Reference: Ch. 4, Broker's Right to Compensation, Referral Fees

a. A New Jersey broker who has not violated any Florida laws

902. Who may directly receive compensation for performing any of the eight services of real estate? a. A broker b. A sales associate c. An unlicensed person d. A broker associate Reference: Ch. 2, Activities Requiring a Real Estate License, Ch. 4, Broker's Right to Compensation; Ch. 5, Sales Associate Duties, Compensation

a. A broker

951. Which condition is most likely to occur when the demand is less than the supply of available housing? a. A buyers' market develops b. A sellers' market develops c. Interest rates will rise d. Rents will rise Reference: Ch. 17, Competition in the Marketplace

a. A buyers' market develops

589. Which of the following provides "quiet enjoyment" on a deed? a. A covenant b. A noise restriction c. An encumbrance d. A noise variance Reference: Ch. 9, Deeds

a. A covenant

728. After going through the complaint process, the administrative law judge found a broker guilty of two violations of F.S. 475. The Florida Real Estate Commission can impose all of the following penalties, EXCEPT: a. A fine of $15,000 b. A suspension of not more than ten years c. A reprimand d. Revocation Reference: Ch. 6, The Disciplinary Process

a. A fine of $15,000

225. A licensed broker and one of their employed sales associates purchase a parcel of real estate together. What relationship have they formed? a. A joint venture b. A limited partnership c. A general partnership d. An illegal venture, since only brokers can be members of a real estate partnership Reference: Ch. 5, Types of Business Formations

a. A joint venture

609. Which encumbrance might cloud a title? a. A judgment b. Zoning c. A right-of-way d. An easement Reference: Ch. 9, Private Limitations on Property Ownership

a. A judgment

577. What is a tax shelter? a. A legal method of decreasing tax liability b. An illegal method for hiding taxable income c. An illegal method of hiding funds from the IRS d. A legal form of property tax exemption Reference: Ch. 17, Real Estate Investment Terminology - Tax Shelter

a. A legal method of decreasing tax liability

540. Without specific authorization, it is a violation for a sales associate to accept which of the following as a deposit? a. A postdated check b. Cash c. Specie (coin) d. Valuable consideration Reference: Ch. 5, Escrow Funds

a. A postdated check

637. How can defects or clouds on a title be cleared? a. A quitclaim deed b. Title insurance c. An abstract d. A radon gas disclosure Reference: Ch. 9, Deeds, Curing Defects in Title

a. A quitclaim deed

332. All of the following activities would be considered fraudulent, EXCEPT: a. A selling agent and a buying agent agree to split a commission with permission by all parties to the transaction. b. An agent for the buyer develops a scheme with the selling agent to obtain a contract with a higher purchase price. c. A buyer's agent chose not to inform the buyer about a planned airport extension adjacent to a prospective property. d. A broker arranges to collect commission from both parties in a transaction without informing the seller. Reference: Ch. 4, Broker's Right to Compensation; Ch. 6, Administrative Penalties, Fraudulent Activities

a. A selling agent and a buying agent agree to split a commission with permission by all parties to the transaction.

747. What would most likely be required to build a church in a residential neighborhood? a. A special use exception b. A variance c. Approval of a regional planning council d. An appropriate buffer zone Reference: Ch. 19, Zoning, Land Use Restrictions, and Building Codes, Zoning Board of Adjustment

a. A special use exception

531. An earnest money deposit can be placed in all of the following institutions, EXCEPT: a. A stock association b. A commercial bank c. A savings association d. A credit union Reference: Ch. 5, Escrow Funds, Escrow Account

a. A stock association

677. To whom does a deed of trust convey title? a. A third party b. The bank c. The mortgager d. The beneficiary Reference: Ch. 12, Mortgage Theories and Documents Related to Loans, Title Theory of Mortgages

a. A third party

506. What is the expected result when the banks stock up their reserves? a. A tight money market b. An easy money market c. Prepayment of loans d. Easier financing Reference: Ch. 13, Federal Reserve System

a. A tight money market

976. Which mortgage clause would allow the mortgagee to call the note due in the event of a default by the mortgagor? a. Acceleration clause b. Prepayment clause c. Defeasance clause d. Subordination clause Reference: Ch. 12, Essential Elements of a Mortgage

a. Acceleration clause

824. A licensee is suspended for three years. After the three years have passed, their license will be active: a. After all penalties and conditions have been fulfilled b. After they pass the state exam c. After they attend a continuing education course and pass the state exam d. And it will automatically be renewed Reference: Ch. 3, Licensing Periods, Reissue

a. After all penalties and conditions have been fulfilled

787. The Raymonde Corporation acquires 60 acres of ranch land, subsequently subdivides it into fiveacre ranchettes, and offers them for sale. The officers and directors of the corporation agree to pay themselves regular salaries. The corporation will pay each officer or director a commission of 15% of the sales price of any ranchette that said officer or director sells. Which is correct? a. All officers and directors of the corporation must be registered, licensed brokers with the FREC for this agreement to be legal. b. Since the corporation may sell its own land, this agreement is legal. c. The officers and directors are engaged in a syndicate. d. Civil action may be brought and enforced by the officers and directors if anyone stops this agreement. Reference: Ch. 2, Activities Requiring a Real Estate License

a. All officers and directors of the corporation must be registered, licensed brokers with the FREC for this agreement to be legal.

385. What is "price?" a. Amount actually paid in a real estate transaction b. Assessed value of a property c. Market value d. Actual or estimated amount to obtain, create, or reproduce a property Reference: Ch. 16, Cost, Price, and Value

a. Amount actually paid in a real estate transaction

515. A real estate license is required for all of the following individuals, EXCEPT: a. An appraiser on salary with a financial institution b. A person showing timeshare condo units c. An out-of-state auctioneer selling Florida farmland d. A person selling business opportunities Reference: Ch. 2, Persons Who are Required to be Licensed, Individuals Who are Exempt from Licensure

a. An appraiser on salary with a financial institution

239. In the complaint process, if there is no dispute over material facts, how may the case be resolved? a. An informal proceeding b. Going to court and filing a bill of interpleader c. A formal hearing d. A binding arbitration Reference: Ch. 6, The Disciplinary Process

a. An informal proceeding

89. Which item is an essential element of a sales contract? a. An offer and acceptance b. Witnesses c. A notary seal d. An earnest money deposit Reference: Ch. 11, Essentials of a Valid Contract

a. An offer and acceptance

947. Which condition exists when the cost of an improvement exceeds the value? a. An over-improvement b. Physical deterioration c. External obsolescence d. Component obsolescence Reference: Ch. 16, Three Approaches to Value, Cost-Depreciation Approach

a. An over-improvement

421. You purchased two tax certificates at auctions. Three years later, what may you do? a. Apply for a tax deed b. Claim the property c. Force foreclosure d. Apply for a general warranty deed Reference: Ch. 18, Paying the Tax Levy, Redemption of a Tax Certificate

a. Apply for a tax deed

910. Five individuals form a limited partnership with three of them acting as limited partners. The partnership purchases a 100-acre tract and subdivides it into one-, two-, and five-acre tracts. Mr. Ray brings the partnership a prospective purchaser, who offers to buy a twoacre lot for $10,000. The sale is completed, and Mr. Ray receives a 5% commission. Which is correct? a. As long as Mr. Ray is a real estate licensee with a current and active license, there is no violation of the law. b. All of the partners must be active brokers. c. All of the general partners must be either brokers or sales associates. d. All of the partners must be brokers, and one of the general partners must be active. Reference: Ch. 2, Persons Who are Required to be Licensed

a. As long as Mr. Ray is a real estate licensee with a current and active license, there is no violation of the law.

321. An owner wants to build a 15-foot deck on the side of a house. There is a ten-foot setback requirement. If he builds the deck, there would be only five feet left over. What can the owner do? a. Ask for a variance b. Request a special exception or special use c. Build the deck under a nonconforming use d. Send the plans to the building department for approval Reference: Ch. 19, Zoning Board of Adjustment

a. Ask for a variance

607. Where will a metes and bounds description always start and finish? a. At the same point b. At different points c. At two points that are close to each other d. At points designated as appropriate by the surveyor Reference: Ch. 10, Surveyor's Method

a. At the same point

605. All of the following cause forfeiture of a corporation's charter, EXCEPT: a. Bankruptcy b. Failure to pay the annual report fee c. Court action d. Action of the stockholders Reference: Ch. 5, Types of Business Formations, Corporation for Profit

a. Bankruptcy

928. What is the classification for economic activity that brings money into an area? a. Basic b. Secondary c. Service d. Dynamic Reference: Ch. 19, Florida's Comprehensive Plan, Preparing the Comprehensive Plan

a. Basic

253. A broker is sued for misrepresentation. The court awards the buyer $100,000 in damages. What kind of penalty is this? a. Civil b. Administrative c. Criminal d. Civic Reference: Ch. 6, License Law Violations

a. Civil

498. What is necessary to qualify for the $500,000 exclusion from the capital gains tax realized from the sale of a principal residence? a. Be a married couple, filing jointly b. Neither spouse has previously used the exclusion c. The replacement residence must be of equal or greater value than the one being sold d. The home must have served as a principal residence at least three of the last five years Reference: Ch. 18, Tax Benefits of Homeownership - Sale of a Principal Residence

a. Be a married couple, filing jointly

184. What must a sales associate do to be eligible to take the broker examination? a. Be employed by one or more actively licensed brokers for at least 24 months within the preceding five years b. Work for one broker for at least 12 months as an active sales associate c. Have a total of one year as an active sales associate with a broker or owner-developer within the last five years d. Prove that they have been actively engaged in the selling of real estate within the last five years Reference: Ch. 2, Obtaining a Florida Real Estate License - Broker

a. Be employed by one or more actively licensed brokers for at least 24 months within the preceding five years

746. While using the cost-depreciation approach, the appraiser may compare the subject property to recently built buildings. What are these new buildings referred to as? a. Benchmark structures b. Contemporary structures c. Comparable structures d. Modern structures Reference: Ch. 16, Three Approaches to Value, Cost-Depreciation Approach

a. Benchmark structures

305. Broker Bob has an exclusive listing. The owner calls and asks if Bob has any offers. Bob says no. Broker Charles submits an offer to the owner that is accepted. Which statement is correct? a. Bob can sue for unliquidated damages but not commission. b. Bob and Charles must share the commission. c. Bob receives no commission and can do nothing about it. d. Bob is entitled to full commission. Reference: Ch. 11, Types of Damages; Types of Listing Contracts

a. Bob can sue for unliquidated damages but not commission.

198. Which items would be optional on a branch office sign? a. Branch office name b. The words, "Licensed Real Estate Broker" c. The name of the business entity d. The name of an individual broker Reference: Ch. 5, Office Signs

a. Branch office name

215. Broker Brown lists Smith's property for $20,000. Broker Brown hears from a friend on the planning commission that they are intending to put a highway right next to Mr. Smith's property, making his lot a corner lot. He tells another friend about what he has heard, and the friend buys the property for $20,000. Which statement is correct? a. Broker Brown's license may be suspended for not telling Smith. b. Broker Brown is not obligated to pass on rumors to the seller. c. Broker Brown has done nothing wrong. d. Broker Brown is guilty of culpable negligence. Reference: Ch. 4, Authorized Real Estate Brokerage Relationships; Ch. 6, Exhibit 6.3

a. Broker Brown's license may be suspended for not telling Smith.

889. Broker Jones was convicted of embezzlement of funds from an employer and was sentenced to five years in the state penitentiary. Since broker Jones returned all of the embezzled funds, the sentence was withdrawn. Which is most correct? a. Broker Jones's license may be suspended since the DBPR is really not concerned with whether or not his sentence was withdrawn. b. Broker Jones can continue to work as a broker and hasn't done anything that would affect a license. c. Broker Jones's license will be automatically revoked. d. Since broker Jones's sentence was withdrawn, the DBPR will not feel that anything was done wrong and will feel no need to suspend his license. Reference: Ch. 6, The Disciplinary Process

a. Broker Jones's license may be suspended since the DBPR is really not concerned with whether or not his sentence was withdrawn.

758. Who are the parties to the contract after a sales contract has been completed, and the money placed into escrow pending closing of the transaction? a. Buyer and seller b. Trustee and seller c. Buyer, seller, and broker d. Vendor, vendee, and broker Reference: Ch. 11, Real Estate Sales Contract, Parties to a Sales Contract

a. Buyer and seller

539. Broker Bond sold buyer Christina a property and told Christina that, if she were not happy with the property within a period of one year, he would purchase the property back from her at the price she bought it for. Which of the following is correct if ten months later Christina decided she did not want the property? a. By purchasing the property as promised, the broker would show good faith and eliminate any charge of false promise. b. If the broker had moved out of the state, the broker would not be liable to honor the terms and conditions of the contract. c. If the broker was actually a broker associate, and during the one-year period had transferred to another broker's office, he would have no further liability on the contract. d. This is a fraudulent transaction. Reference: Ch. 6, Administrative Penalties, Fraudulent Activities - Promise to Resell

a. By purchasing the property as promised, the broker would show good faith and eliminate any charge of false promise.

908. How is the interest rate determined on an FHA insured mortgage loan? a. By the market b. By the Federal Reserve c. By the secretary of the Department of Housing and Urban Development d. By the Congress Reference: Ch. 13, FHA Insured Mortgage Loan Programs

a. By the market

567. The principle of substitution is used in all appraisal approaches for estimating market value but is best illustrated with which valuation approach? a. Comparable sales b. Cost-depreciation c. Income d. 4/3/2/1 Reference: Ch. 16, Three Approaches to Value

a. Comparable sales

222. Which of the following documents not only recommends that the principal sign it, but requires it? a. Consent to Transition to Transaction Broker b. Notice of Nonrepresentation c. Single Agent Notice d. Transaction Broker Notice Reference: Ch. 4, Brokerage Relationship Disclosure Act - Definitions

a. Consent to Transition to Transaction Broker

631. Which type of lien may be retroactive to an earlier date, thus taking priority over other liens? a. Construction lien b. Judgment lien c. Vendor lien d. IRS lien Reference: Ch. 9, Liens

a. Construction lien

234. All of the following are required to be displayed at a broker's office, EXCEPT: a. Copies of each sales associate's license b. A fair housing poster c. A proper sign on or about the entrance d. The license status of any broker's listed on the office sign Reference: Ch. 5, Office Signs; Ch. 7, HUD Poster

a. Copies of each sales associate's license

389. Which appraisal approach would usually be requested by insurance companies? a. Cost-depreciation approach b. Sales comparison approach c. Income capitalization approach d. Land residual approach Reference: Ch. 16, Three Approaches to Value

a. Cost-depreciation approach

135. Who can assess property for tax purposes? a. County property appraiser b. County commission c. School board d. Special taxing district Reference: Ch. 18, Property Tax Assessments

a. County property appraiser

125. How would a purchase money mortgage appear on a closing statement? a. Credit the buyer and debit the seller b. Credit the seller and debit the buyer c. Debit the seller and debit the buyer d. Credit the seller and credit the buyer Reference: Ch. 13, Types of Mortgages, Purchase Money Mortgage; Ch. 14, Section 1 - Total Purchase Price, First or Second Mortgage Balance

a. Credit the buyer and debit the seller

912. How would a second mortgage, that does not involve the seller, be reflected on a closing statement? a. Credit to the buyer b. Debit to the seller c. Credit to the seller d. Debit to the buyer Reference: Ch. 14, Section 1 - Total Purchase Price, First or Second Mortgage

a. Credit to the buyer

915. How would a new mortgage appear on the closing statement? a. Credit to the buyer b. Debit to the buyer c. Credit to the seller d. Debit to the seller Reference: Ch. 14, Section 1 - Total Purchase Price, First or Second Mortgage

a. Credit to the buyer

909. What is the term that is used to refer to the data that an appraiser accumulates and updates, including such things as maps, cost information, and previous appraisals? a. Data plant b. Database c. Data file d. Stock Reference: Ch. 16, The Appraisal Process

a. Data plant

473. The buyer has agreed to assume the existing mortgage of $74,260.00 at 8 1/2% interest, with monthly payments of $622.60. The remaining term of the loan is 22 years, and the closing date is May 18 (prorate as of midnight the day prior to closing). Prorate the interest using the calendar year. How will the interest portion of the payment be prorated on the closing statement? a. Debit seller $288.46, credit buyer $288.46 b. Debit seller $288.46, credit buyer $237.56 c. Debit seller $341.43, credit buyer $341.43 d. Debit buyer $293.99, credit seller $293.99 Reference: Ch. 14, Section 2 - Prorations and Prepayments, Prorating Interest on an Assumed Mortgage

a. Debit seller $288.46, credit buyer $288.46 # Seller days = 17; Prorated amount = ($74,260 x .085 ÷ 12) ÷ 31 x 17 days = $288.46

466. How is an existing mortgage that is being retired at closing shown on a closing statement? a. Debit to seller b. Debit to buyer c. Credit to seller d. Prorated between the buyer and seller Reference: Ch. 14, Section 1 - Total Purchase Price, First or Second Mortgage Balance

a. Debit to seller

394. What would be an investor's motivation for deducting depreciation? a. Maximizing cash flow b. Minimizing cash flow c. Maximizing liability d. Minimizing income Reference: Ch. 17, Depreciation

a. Maximizing cash flow

741. Which term refers to the estimated time that an improvement will be profitably useful? a. Economic life b. Market age c. Effective age d. Actual age Reference: Ch. 16, Three Approaches to Value, Cost-Depreciation Approach

a. Economic life

925. What is the principal of a broker also known as in the agency form of business? a. Employer in a single agency b. The one paying the commission c. Seller d. Buyer Reference: Ch. 4, Single Agent

a. Employer in a single agency

973. Which is NOT classified as a private restriction on the ownership of real property? a. Escheat b. Leases c. Liens d. Deed restrictions Reference: Ch. 9, Limitations on Property Ownership

a. Escheat

288. Which estate would NOT convey legal title? a. Estate for years b. Fee simple estate c. Life estate d. Estate by the entireties Reference: Ch. 8, Estates

a. Estate for years

514. Under what condition does the DBPR have the power to investigate complaints against unlicensed individuals? a. Even if it is only indicated that the real estate license law is probably being violated b. Only if it involves a dealing with a licensee c. Under no circumstances d. Only if it has first established that the real estate license law has, in fact, been violated Reference: Ch. 6, The Disciplinary Process, Administrative Actions against Unlicensed Individuals

a. Even if it is only indicated that the real estate license law is probably being violated

717. Which homeowner's right can keep someone off of their property? a. Exclusion b. Use c. Reduction d. Trespass Reference: Ch. 8, Real and Personal Property, Legal Rights in Property

a. Exclusion

470. Which of the following is an entry on a broker's cash reconciliation statement? a. Expenses of the buyer are shown as a disbursement b. Expenses of the seller shown as a receipt c. Expenses of the buyer shown as a receipt d. Expenses of the broker shown as a disbursement Reference: Ch. 14, Section 5 - Broker's Statement

a. Expenses of the buyer are shown as a disbursement

669. Complete the sentence. When all terms and conditions have been clearly stated, a contract is said to be: a. Expressed b. Formal c. Parol d. Executed Reference: Ch. 11, Contracts. Classification of Contracts

a. Expressed

530. Recommendations regarding changes in educational curriculum come under the powers of which entity? a. FREC b. Florida governor c. Post-license commission committee d. Secretary of state Reference: Ch. 3, Powers of the Commission

a. FREC

415. The following are exempt or immune from property taxes, EXCEPT: a. Farmland b. Nonprofit hospitals c. Libraries d. Churches Reference: Ch. 18, Real Estate Tax Exemptions and Limitations

a. Farmland

108. Which estate or tenancy is the most comprehensive? a. Fee simple b. Life estate c. Estate for years d. Free sample estate Reference: Ch. 8, Estates

a. Fee simple

521. A broker sells Jayne, a prospective renter, a rental list for $100 on May 1. If Jayne wants a refund, by what date must Jayne request the refund? a. May 31 b. June 1 c. May 15 d. June 15 Reference: Ch. 5, Rental Information

a. May 31

144. What must a person do in order to qualify for the homestead tax exemption? a. File for the exemption each year b. File for the exemption only once c. Live in the house all year d. Live in the house at least six months of the year Reference: Ch. 18, Homestead Tax Exemption

a. File for the exemption each year

688. Complete the sentence. A joint venture is typically created: a. For a single project b. By filing the appropriate paperwork with DBPR c. By filing the appropriate paperwork with the secretary of state d. To avoid paying taxes Reference: Ch. 5, Types of Business Formations, Joint Venture

a. For a single project

490. Broker Dan and broker Fred both have an open listing on Gail's home. Broker Dan showed Gail's home to customer Paula. Six months later broker Fred shows Gail's home to Paula and Paula buys it. Which is correct? a. Gail owes Fred a commission. b. Gail owes Dan a commission. c. Fred and Dan must share the commission. d. Gail must pay both brokers a commission. Reference: Ch. 11, Listing Contracts, Types of Listing Contracts - Open Listing

a. Gail owes Fred a commission.

628. When a buyer withdraws an offer prior to it being accepted by the seller, what should the broker do? a. Give the deposit back to the buyer b. Give the deposit to the seller c. Retain the deposit as a commission d. Call the division of real estate for instructions Reference: Ch. 5, Escrow Funds, Broker's Rights to Escrowed Funds; Ch. 11, Contract Negotiation, Termination of Offers

a. Give the deposit back to the buyer

967. Which assets found with a business brokerage are NOT usually found with a real estate corporation? a. Goodwill and personal property b. Personal property and fixtures c. Personal property and timber sales d. Personal property and leases Reference: Ch. 17, Business Brokerage

a. Goodwill and personal property

99. When calculating housing and total obligations ratios, which income value does the lender use? a. Gross monthly income b. Net monthly income c. Gross annual income d. Net annual income Reference: Ch. 12, Lender Risk, Income Ratios

a. Gross monthly income

820. Which of the following is a characteristic of the real estate market? a. Heterogeneous b. Reacts very quickly to changes c. Mobile d. Homogeneous Reference: Ch. 15, Characteristics of the Real Estate Market

a. Heterogeneous

16. Complete the sentence. A broker who holds more than one broker license: a. Holds multiple licenses b. Is in violation of the license law c. Must register one as a branch license d. Can have only one active at a time Reference: Ch. 3, Group and Multiple Licenses

a. Holds multiple licenses

784. A Georgia broker accompanies his prospects to Florida and shows them three homes. After finding a home that the prospects like, the Georgia broker finds a Florida broker to give the deal to. The Georgia broker requests 50% of the commission as a share for assisting in the sale. Which statement applies? a. If the Florida broker pays the Georgia broker, both will have violated F.S. 475. b. The Georgia broker can be paid, provided it is no more than 50%. c. If the Florida broker pays the Georgia broker, no laws will be broken. d. Provided that the check is mailed to Georgia, there is no violation. Reference: Ch. 4, Broker's Right to Compensation, Referral Fees

a. If the Florida broker pays the Georgia broker, both will have violated F.S. 475.

21. The Florida Real Estate Commission may do all of the following, EXCEPT: a. Impose imprisonment as a penalty b. Pass rules to implement the license law c. Make determination of violations d. Establish licensing fees Reference: Ch. 6, Range of Penalties

a. Impose imprisonment as a penalty

715. Complete the sentence. Real estate commissions are usually based on the total sales price: a. Including encumbrances b. Not including seller's closing expenses c. Not including encumbrances d. Including the commission, but not encumbrances or expenses Reference: Ch. 11, Listing Contracts, Calculating a Brokerage Commission

a. Including encumbrances

558. A real estate license is not renewed at the end of the license period. Provided this is not the first renewal, what is the license status? a. Involuntary inactive b. Voluntary inactive c. Revoked d. Suspended Reference: Ch. 3, Licensing Periods, Renewal

a. Involuntary inactive

568. A broker was found guilty of fraud, and the broker's license was revoked by the Commission. What will the license status become for all sales associates registered with that broker? a. Involuntary inactive b. Revoked c. Suspended d. Reissued Reference: Ch. 3, Active and Inactive Licenses, Void and Ineffective Licenses

a. Involuntary inactive

494. A broker has an abstract accompanied by an opinion of title by a qualified attorney in his files that was prepared one year ago. When potential buyers inquired whether or not the title to the property was merchantable, the broker gave them a copy of the abstract and opinion of title and assured them that the title was indeed merchantable. The broker: a. Is in violation of the license law b. Is not in violation of the license law c. Has acted properly, and if a title problem arises, the purchaser may sue the attorney d. Should have delivered the original documents to the purchaser rather than copies Reference: Ch. 6, Administrative Penalties, Fraudulent Activities - Rendering an Opinion of Title; Ch. 9, Protecting Title

a. Is in violation of the license law

329. In order for a broker to appoint designated sales associates to represent the buyer and seller, all of the following conditions must be met, EXCEPT: a. It is a residential transaction. b. It is a nonresidential transaction. c. The buyer and seller must sign statements. d. The buyer and seller must have assets of at least one million dollars. Reference: Ch. 4, Designated Sales Associate

a. It is a residential transaction.

781. Which time period applies to an estate for years? a. It is for a fixed time period. b. It must be for at least one year. c. It must be for at least two years. d. It cannot be for more than one year. Reference: Ch. 8, Estates, Non-freehold Estates

a. It is for a fixed time period.

505. If a licensee fails to renew their license at the end of the prescribed period, what is the status of the license? a. It may remain inactive for a maximum of two years. b. It may remain inactive for a maximum of ten years. c. It is automatically suspended. d. It must be renewed as soon as possible. Reference: Ch. 3, Licensing Periods, Renewal

a. It may remain inactive for a maximum of two years.

730. Which statement correctly applies to a branch office sign? a. It must be easily observed and read by anyone entering the office. b. It must contain the words "branch office." c. It must have the names of all active sales associates. d. It may have the names of all active and inactive officers and directors. Reference: Ch. 5, Brokerage Office Requirements, Office Signs

a. It must be easily observed and read by anyone entering the office.

319. Which statement best applies to a planned unit development (PUD)? a. It provides a higher number of dwellings and maximum utilization of open areas. b. It typically includes only residential use. c. It requires areas to be left open for future growth. d. It is a less efficient use of land than other types of communities. Reference: Ch. 19, Planned Unit Development

a. It provides a higher number of dwellings and maximum utilization of open areas.

731. How will a licensee's license status be affected when payment from the Real Estate Recovery Fund is necessary due to their wrongdoing? a. It will be suspended until repayment is made to the fund. b. It will be revoked on the date the payment is made from the fund. c. It will be canceled until FREC can determine what to do. d. It will be rendered null and void when the claim is made. Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

a. It will be suspended until repayment is made to the fund.

657. Bob and Mary have agreed to participate in a limited number of transactions. Bob and Mary have no right to obligate or bind each other. What business relationship have they formed? a. Joint venture b. Corporation c. Partnership d. Limited liability company Reference: Ch. 5, Types of Business Formations

a. Joint venture

380. A house valued comparably to all houses in the neighborhood was assessed at a tax base $5,000.00 less than the others. Excluding any special tax exemptions, what should the property sell for? a. Less than the others b. More than the others c. Same as the others d. The property will not sell at all Reference: Ch. 16, Comparable Sales Approach; Ch. 18, Property Tax Assessments

a. Less than the others

636. What term is used to refer to damages that are specified in a contract? a. Liquidated damages b. Unliquidated damages c. Punitive damages d. Compensatory damages Reference: Ch. 11, Contract Termination, Types of Damages

a. Liquidated damages

195. Aaron Applicant has passed the state examination for becoming a sales associate. An hour later, Aaron has the opportunity to list his neighbor's house. Aaron may: a. List the house as long as he has an employing broker and both Aaron and the employing broker are properly registered on the records of the DBPR b. Not list the property until he has sent a copy of his pass slip and a copy of his employing broker's business tax receipt number to the Division of Real Estate for certification c. List the property as long as he has been properly preregistered with his new owner-developer, and the pass slip is physically in his possession d. Not list the property until he has joined and paid the required fees to the local Association of REALTORS Reference: Ch. 2, Employment

a. List the house as long as he has an employing broker and both Aaron and the employing broker are properly registered on the records of the DBPR

588. What instrument gives the broker authority to represent the seller in a real estate transaction? a. Listing agreement b. Buyer broker agreement c. Sales contract d. Agency disclosure Reference: Ch. 11, Listing Contracts

a. Listing agreement

314. The buyer signs an offer with a deposit, but the seller changes the price. What should the sales associate do? a. Make the necessary changes, have the seller sign and initial the changes, and then have the buyer initial the changes b. Make the changes, have the buyer sign, and then have the seller sign c. Prepare a new offer reflecting the changes and then have all parties sign d. Advise the seller that there can be no changes Reference: Ch. 11, Real Estate Sales Contracts

a. Make the necessary changes, have the seller sign and initial the changes, and then have the buyer initial the changes

326. What is the role of the local planning agency in matters concerning site planning, subdivision plat approval, and sign acceptability? a. Makes recommendations that are subject to the local governing body b. Is accountable to no other authority c. Has no authority d. Is not concerned Reference: Ch. 19, Authority of the Local Planning Agency

a. Makes recommendations that are subject to the local governing body

667. What is the most probable price that a property will bring in an open and competitive market? a. Market value b. Cost c. Replacement cost d. Reproduction cost Reference: Ch. 16, Appraisal Concepts and Definitions, Cost, Price, and Value

a. Market value

587. All of the following are application requirements for obtaining a Florida real estate license, EXCEPT: a. Must be a Florida resident b. Must be a high school graduate or its equivalent c. Must be at least 18 years of age d. Must submit a completed application and fee payment Reference: Ch. 2, Obtaining a Florida Real Estate License, General Qualifications for Licensure

a. Must be a Florida resident

37. A borrower applied for and received an adjustable rate mortgage (ARM). The interest rate increased more than the periodic cap would allow. The new payment does not cover the full interest that is added to the principal balance and deferred. What is this called? a. Negative amortization b. Index rate c. Margin d. Teaser rate Reference: Ch. 13, Adjustable Rate Mortgage (ARM)

a. Negative amortization

671. Which type of lease is typically used in commercial real estate where the tenant pays both rent and expenses? a. Net lease b. Gross lease c. Percentage lease d. Ground lease Reference: Ch. 9, Types of Leases

a. Net lease

578. If a broker changes their business address, what change will be made to the license status for all the sales associates employed by that broker? a. No change; they remain in force as long as the change is reported to the Department within ten days. b. They become cancelled. c. They become suspended. d. They become revoked. Reference: Ch. 3, Licensing Periods, Reissue; Ch. 5, Sales Associate's Duties, Change of Employer or Address

a. No change; they remain in force as long as the change is reported to the Department within ten days.

635. A broker listed five condos for rent on the beach in Florida. Three of the units rented for $1,000 per month, and two of the units rented for $500 per month during the season. The broker placed an ad in a Chicago newspaper, reading "Beachfront condos for rent. $500 per month, call Ocean Front Realty (407) 368- 0044." The two $500 units were not available at the time the ad ran. Is this legal? a. No, as the $500 units were not available. b. Yes, the broker has done nothing wrong. c. Yes, but would be a violation if the ad was in a Florida paper. d. No, because Florida brokers are not permitted to run ads in out-of-state newspapers. Reference: Ch. 5, Brokerage Office Requirements, False Advertising; Ch. 6, Criminal Penalties, SecondDegree Misdemeanors; Exhibit 6.3(d)

a. No, as the $500 units were not available.

935. To be a member of FREC, a person must have at least how many years of real estate experience? a. None b. Two c. Five d. Ten Reference: Ch. 3, The Florida Real Estate Commission, Composition of the Commission

a. None

640. A broker followed the instructions in a FREC escrow disbursement order, but was the victim of a civil court judgment that resulted in a payment of $10,000 from the Real Estate Recovery Fund. What consequence will the FREC impose? a. None, the FREC will take no action against the broker. b. The FREC will probably suspend the broker's license. c. The FREC will probably revoke the broker's license. d. The FREC is required by law to suspend the broker's license. Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

a. None, the FREC will take no action against the broker.

266. A Methodist church owns a nursing home for its members. They refuse to admit anyone to the home who is not a member of their church. This is: a. Not a violation of the Fair Housing Act b. A violation of the Civil Rights Act of 1866 c. A violation of the Civil Rights Act of 1968 d. A violation of the Fair Housing Act Reference: Ch. 7, Federal Fair Housing Laws

a. Not a violation of the Fair Housing Act

104. Where are the interest rate, payment, and other terms of a loan found? a. Note b. Lease c. Satisfaction d. Mortgage Reference: Ch. 12, Mortgage Theories and Documents Related to Loans

a. Note

871. Three active licensed brokers are partners in a real estate brokerage partnership. One of the brokers dies. What happens to the partnership? a. Nothing, since there is still at least one active broker to run the business. b. The other partners who are brokers have their licenses suspended during the period of reorganization. c. The partnership will need to reregister using the proper forms so that the business entity may continue to function. d. Once any of the partners die, that business entity may never be reformed. Reference: Ch. 5, Types of Business F

a. Nothing, since there is still at least one active broker to run the business.

678. What must a sales associate do when they change employers? a. Notify the Department using a change of status form b. Take all of their listings and files with them c. Wait 30 days to begin to operate d. Nothing, no action is necessary Reference: Ch. 5, Sales Associate's Duties, Change of Employer or Address

a. Notify the Department using a change of status form

855. Which term refers to the substitution of a debtor or a creditor for another? a. Novation b. Subordination c. Defeasance d. Equity of redemption Reference: Ch. 12, Sale of Mortgaged Property

a. Novation

958. A broker's legal duty to the principal includes all of the following EXCEPT: a. Obeying all instructions b. Acting in good faith c. Obtaining the best price d. Disclosing all material facts Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

a. Obeying all instructions

711. Which expense is an example of a fixed operating expense? a. Real estate taxes b. Maintenance c. Management d. Utilities Reference: Ch. 16, Income Approach, Direct Capitalization Technique

a. Real estate taxes

971. Complete the sentence. Real estate investment analysis is a determination of the extent to which certain real estate investments will fit an investor's: a. Objectives b. Gross income requirements c. Experience d. Operating expense ratio Reference: Ch. 17, Real Estate Investment Analysis

a. Objectives

87. What type of listing can be held by more than one broker at the same time? a. Open listing b. Exclusive right of sale listing c. Exclusive listing d. All of the above Reference: Ch. 11, Types of Listing Contracts

a. Open listing

638. Which action by a broker is an example of commingling? a. Placing escrow money into their personal account b. Failing to disclose material facts c. Failing to give an agency disclosure d. Steering buyers to an ethnic neighborhood Reference: Ch. 5, Escrow Funds, Escrow Account

a. Placing escrow money into their personal account

109. Which term refers to the government's right to limit or control the actions of citizens in the form of such things as zoning codes and building codes? a. Police power b. Eminent domain c. Escheat d. Taxation Reference: Ch. 9, Limitations on Property Ownership, Government Limitations on Private Property Ownership

a. Police power

139. Which governmental power authorizes a city to make zoning laws? a. Police power b. Eminent domain c. Escheat d. Riparian doctrine Reference: Ch. 9, Government Limitations on Private Property Ownership

a. Police power

40. Which step follows the investigation in the complaint process? a. Probable cause determination b. Administrative complaint c. Formal hearing d. Informal hearing Reference: Ch. 6, The Disciplinary Process

a. Probable cause determination

5. What business is a licensee engaged in who markets, leases, and maintains property for someone else? a. Property management b. Business brokerage c. Universal agency d. Estoppel Reference: Ch. 1, Specialization within the Real Estate Profession

a. Property management

283. What do homestead rights provide? a. Protection from the negligence of a spouse b. Protection from a prior judgment c. Compliance with fair housing laws d. Protection from property tax foreclosure Reference: Ch. 8, Constitutional Homestead Rights

a. Protection from the negligence of a spouse

533. A qualified applicant from a mutual recognition state who is requesting a license by mutual recognition is required to do which of the following? a. Provide proof of licensure in a mutual recognition state b. Provide a notarized letter stating their intent to become a Florida resident c. Provide proof of Florida residency for a minimum of the last six months d. Pass a 100-question law exam Reference: Ch. 2, Obtaining a Florida Real Estate License, Obtaining a License by Mutual Recognition

a. Provide proof of licensure in a mutual recognition state

673. Two brokers sharing space in a manner whereby the public presumes the brokers are partners may be engaged in what is referred to as a: a. Quasi-partnership b. General partnership c. Limited partnership d. Joint venture Reference: Ch. 5, Types of Business Formations

a. Quasi-partnership

232. Broker Rick sold Janey a rental list on March 8 for $100.00. Janey inspected all the properties and found them to be occupied. On April 6, Janey demands a refund. What action should Broker Rick take? a. Refund $100 immediately b. Refund $100 within 30 days c. Refund $75 d. None, no refund is due Reference: Ch. 5, Rental Information

a. Refund $100 immediately

706. With what would an appraiser utilizing the cost-depreciation approach be most concerned? a. Reproduction cost b. Market value c. Assessed value d. The price the seller paid for the property Reference: Ch. 16, Three Approaches to Value, Cost-Depreciation Approach

a. Reproduction cost

58. What is the main purpose of Regulation Z? a. Require lenders to disclose the true cost of credit to consumers b. Require lenders to disclose closing costs to borrowers c. Require brokers to disclose closing costs to buyers d. Require sales associates to disclose commissions to customers Reference: Ch. 13, Laws Regarding Fair Credit and Lending Procedures, Truth-in-Lending Act

a. Require lenders to disclose the true cost of credit to consumers

6. In which service of real estate must a licensee disclose the agency relationship and the responsibilities of that relationship to the public? a. Residential sales b. Residential leasing c. Real estate appraisals d. Real estate auctions Reference: Ch. 4, Disclosure Requirements

a. Residential sales

632. If you owned one section of land described as S25, T2S, R2W, what section would be two sections to the west of your section? a. S27, T2S, R2W b. S29, T2S, R1W c. S23, T2S, R2W d. S23, T2S, R1W Reference: Ch. 10, Government Survey Method

a. S27, T2S, R2W

113. The primary purpose of the Federal Home Loan Bank System is to provide support for which of the following? a. Savings associations b. Federal commercial banks c. Mortgage brokers d. Insurance companies Reference: Ch. 13, The Secondary Mortgage Market - Freddie Mac

a. Savings associations

205. A broker, while looking for a deal for his best friend, gets a listing. The seller must sell because of a family emergency. What should the broker say to his best friend? a. Say nothing about the seller, and ask the buyer to make an offer b. Tell the buyer that the seller must sell quickly so that he would probably accept any reasonable offer c. Give the buyer only the suggestion that the seller is motivated d. Tell the buyer that a dual agency exists Reference: Ch.

a. Say nothing about the seller, and ask the buyer to make an offer

73. Which clause in a deed states that the grantor was in possession and has the right to sell the property? a. Seisin b. Granting c. Premises d. Habendum Reference: Ch. 9, Clauses in Deeds

a. Seisin

690. Which of the following terms refers to a purchase money mortgage? a. Seller financing b. Chattel mortgage c. HELOC d. Bank loan Reference: Ch. 13, Loan Repayment Methods, Purchase Money Mortgage

a. Seller financing

24. What must be given to a seller who is about to enter into a fiduciary relationship with a brokerage firm? a. Single Agency Notice b. Transition to Transaction Broker Notice c. Transaction Broker Notice d. No Brokerage Relationship Notice Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

a. Single Agency Notice

258. Broker Smith, in selling building lots, offers each buyer the opportunity to purchase, for $5.00, a chance in a lottery in which (if 20 lots are sold by the end of the week) the winner would be entitled to onehalf off the price of his lot. At the end of the week, only 16 lots were sold, so Smith decided to return the entrants' $5.00. Which statement is true? a. Smith is in violation because he conducted a device, lottery, scheme, or trick. b. Smith is not in violation since the monies were returned. c. This is not a violation of F.S. 475. d. This would be a violation only if Smith in fact gave the discount to the winner of the lottery. Reference: Ch. 6, Administrative Penalties, Fraudulent Activities - Using Lotteries

a. Smith is in violation because he conducted a device, lottery, scheme, or trick.

548. To which entity must the Florida Real Estate Commission report criminal violations of F.S. 475? a. State attorney general b. Sheriff's office c. Local court d. DBPR Reference: Ch. 6, Criminal Penalties

a. State attorney general

923. A real estate sales associate is prohibited from which action? a. Suing the principal b. Suing their broker c. Working for anyone other than a broker d. Acquiring properties and listings to sell Reference: Ch. 5, Sales Associate's Duties, Compensation

a. Suing the principal

522. Janet has reached the end of her lease. She is unable to reach the landlord but stayed in the property anyway. What type of tenancy does Janet have? a. Tenancy at sufferance b. Tenancy at will c. Tenancy by the entireties d. Tenancy in gross Reference: Ch. 8, Estates, Non-freehold (Leasehold) Estates

a. Tenancy at sufferance

753. Bob, Brian, and Betty were coowners of a parcel of real estate. Bob passed away, and according to his will, his interest in the property passed to his wife. What form of tenancy did Bob have? a. Tenancy in common b. Tenancy by the entireties c. Joint tenancy d. Life tenancy Reference: Ch. 8, Estates

a. Tenancy in common

354. Which mortgage provides an interest-only loan? a. Term mortgage b. Amortized mortgage c. Reverse mortgage d. Home equity loan Reference: Ch. 13, Types of Mortgages

a. Term mortgage

709. A broker fails to fulfill the terms and conditions as stated in the listing contract. The listing contract states that the broker will advertise weekly in the Palm Beach Post Times and the Palm Beach Shiny Sheet, which they failed to do. What may the seller legally do? a. Terminate the listing contract with the broker since the broker has failed to perform b. Not terminate the contract since there has been no breach as far as the law is concerned c. Sue the broker in the equity courts for unliquidated damages d. Sue the broker in the District Court of Appeals for Interpleader Reference: Ch. 11, Listing Contracts

a. Terminate the listing contract with the broker since the broker has failed to perform

875. Regarding limited partnerships as real estate brokers, there must be one or more general and one or more limited partners in order to qualify as a licensed real estate brokerage. What does the real estate license law also require in F.A.C. 61J2-4.007? a. That each general partner be registered, at least one of whom is an active broker b. Each general and limited partner to be licensed as active brokers c. That all of the general partners be licensed as active, but none of the limited partners d. That at least one general and at least one limited partner be registered as active Reference: Ch. 5, Types of Business Formations, Real Estate Brokerage Limited Partnership

a. That each general partner be registered, at least one of whom is an active broker

704. Which of the following statements pertaining to VA and FHA loans is correct? a. The FHA insures loans. VA loans are guaranteed. b. Both the FHA and the VA make loans. c. FHA loans are guaranteed. d. Conventional loans are insured by the government. Reference: Ch. 13, FHA Insured Mortgage Loans, VA Guaranteed Loans

a. The FHA insures loans. VA loans are guaranteed.

633. Florida law requires that brokers place escrow deposits into an escrow account. What else is required by the law regarding that account? a. The broker be a signer on the account. b. The office manager be a signer on the account. c. The broker must appoint someone to oversee the escrow account. d. FREC must be informed of the location of the escrow account. Reference: Ch. 5, Escrow Funds

a. The broker be a signer on the account.

216. A seller lists a property at $75,000 but tells the broker he will go as low as $72,000. Which statement is correct? a. The broker cannot tell the buyer of the lower price. b. The broker must tell the buyer of the lower price. c. The broker can accept a $72,000 offer for the seller. d. either b or c Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

a. The broker cannot tell the buyer of the lower price.

343. A buyer takes over the seller's mortgage payments but does not assume liability. Which statement best describes this situation? a. The buyer is purchasing subject to the mortgage. b. The buyer is assuming the loan with novation. c. This is legal only when the mortgage contains a due-on-sale clause. d. This is an example of an assumption. Reference: Ch. 12, Sale of Mortgaged Property

a. The buyer is purchasing subject to the mortgage.

985. Jones sold his principal residence after living in it for the statutory period. He realized a capital gain of $125,000 on the sale. Which of the following applies? a. The capital gain is not taxable. b. The gain is taxable in the year of sale. c. Jones may defer the capital gain, but only if the sale is an installment sale. d. Forty percent of the gain is excluded from taxation. Reference: Ch. 18, The Effect of Federal Income Taxes on Home Ownership

a. The capital gain is not taxable.

396. Which definition best describes the equity a homeowner has in their home? a. The difference between the market value and the mortgage balance b. The amount of upfront cash paid upon purchase of the home c. The amount still owed on the home d. The value determined by an appraiser Reference: Ch. 12, Common Mortgage Features, Equity

a. The difference between the market value and the mortgage balance

106. Which of the following is a characteristic of an amortized or level payment mortgage? a. The early payments are mostly interest. b. The early payments are mostly principal. c. Each monthly payment increases and the balance decreases. d. With each monthly payment, the interest increases and the balance decreases. Reference: Ch. 13, Loan Repayment Methods, Amortized Mortgage

a. The early payments are mostly interest.

32. To whom do listings obtained by a sales associate belong? a. The employing broker b. The listing sales associate c. The multiple listing service d. The local association of REALTORS Reference: Ch. 5, Sales Associate's Duties

a. The employing broker

366. Which condition would decrease the supply of loanable funds for real estate loans? a. The government bonds this year are 9% compared to 8% last year. b. There is a 3% increase in family income nationwide. c. People take money from their savings accounts to put into retirement accounts. d. There is an overall increase in consumer spending. Reference: Ch. 13, The Federal Reserve System

a. The government bonds this year are 9% compared to 8% last year.

869. If a real estate licensee is involved in a personal real estate transaction, which of the following is correct? a. The licensee must disclose their license status prior to entering into any serious negotiations. b. The licensee must disclose their license status in any advertising. c. The licensee is not required to disclose their license status in a personal transaction. d. The licensee must disclose the license status on any yard sign using terminology, such as "owner agent." Reference: Ch. 5, Brokerage Office Requirements, Personal Transactions

a. The licensee must disclose their license status prior to entering into any serious negotiations.

686. Which of the following is a characteristic of a general partnership? a. The partners agree to share in the profits and debts of the partnership b. All partners must be brokers c. There must be at least one limited partner d. The shareholders agree to share in the profits and debts of the partnership Reference: Ch. 5, Types of Business Formations, General Partnership

a. The partners agree to share in the profits and debts of the partnership

877. A corporation for profit was formed for brokering real estate. "A" held a broker license and became president. "B" and "C" financed 40% of the corporation and each was made a director, who was to assume normal office duties and functions. "D" and "E" held broker associate licenses with prior brokerage corporations and were employed as broker/sales associates. Which applies? a. The president must register as an active broker and the directors must register as nonlicensed registered persons. b. A corporation for profit cannot be formed to broker real estate. c. "D" and "E" cannot be hired as broker associates but could be stockholders. d. None of the above Reference: Ch. 5, Types of Business Formations, Corporation for Profit

a. The president must register as an active broker and the directors must register as nonlicensed registered persons.

769. What does the creation of a condominium require? a. The recording of a declaration in the public records b. Filing articles of incorporation with the secretary of state c. A common elements agreement d. The approval of the bylaws by the county commission Reference: Ch. 8, Condominiums, Cooperatives, and Timeshares, Condominiums

a. The recording of a declaration in the public records

868. A seller sold a home to a buyer for $50,000. The buyer made a cash down payment of $25,000. The balance of the purchase price was secured by a pledge of $25,000 in stock certificates. The buyer defaulted on the balance of the sales price that was pledged as security. Which statement is correct regarding the seller? a. The seller has a vendor's lien and may foreclose. b. The seller may foreclose provided that they have served constructive notice that they have reserved a primary vendor's lien. c. The seller may not foreclose because stock may be pledged only as an authoritative primary security. d. The seller may foreclose only because of the tertiary law regarding pledging of stocks as a means for securing chattels. Reference: Ch. 9, Liens

a. The seller has a vendor's lien and may foreclose.

579. Which clause in a deed further assures the buyer that the present owner actually owns the property and has the right to sell? a. The warrant of seizin b. The warrant of further assurance c. The warrant of quiet enjoyment d. Warranty forever Reference: Ch. 9, Deeds, Warrants or Covenants in Deeds

a. The warrant of seizin

870. A broker has a friend in Michigan who refers prospects from time to time. The broker reimburses the friend for any expenses but does not pay the friend a commission or referral fee. Which statement applies? a. This is an unlawful practice. b. This is a lawful practice. c. This is lawful so long as the friend does not come to Florida. d. This is unlawful unless expenses are supported by receipts. Reference: Ch. 4, Broker's Right to Compensation, Referral Fees

a. This is an unlawful practice.

9. Sandy works as a sales associate for a broker and has been asked to work weekends for a developer to sell new homes on commission. What must Sandy do to work for the developer? a. Transfer her license from the broker to the owner-developer b. Notify the broker where she can be found on weekends c. Contact the state and be issued a group license d. Contact the state and be issued multiple licenses Reference: Ch. 2, Employment; Ch. 5, Sales Associate's Duties, Change of Employer or Address

a. Transfer her license from the broker to the owner-developer

93. In states which operate under title theory, the borrower: a. Transfers ownership to the mortgagee or a third party until paid b. Transfers possession to the mortgagee or a third party until paid c. Pledges the property as security on the loan d. Creates a tenancy in common with the lender Reference: Ch. 12, Title Theory of Mortgages

a. Transfers ownership to the mortgagee or a third party until paid

320. What do zoning laws regulate? a. Type of use b. Structures and building materials c. Public right of way and easements d. Color of exteriors, type of roof tile, etc. Reference: Ch. 19, Zoning

a. Type of use

345. Which loan does NOT require a down payment? a. VA guaranteed b. Conventional c. FHA insured d. Adjustable rate mortgage Reference: Ch. 13, Types of Mortgages

a. VA guaranteed

661. Which of the following elements must an option contract contain? a. Valuable consideration b. A competent grantor c. A competent mortgager d. Good consideration Reference: Ch. 11, Option Contracts

a. Valuable consideration

968. With the income approach to value, if the capitalization rate is decreased and the income remains constant, what is the effect on the value? a. Value increases b. Value remains constant c. Value decreases d. Value may increase or decrease Reference: Ch. 16, Income Approach

a. Value increases

145. If an owner felt that a zoning rule was causing an economic hardship, not of their own making, they may seek relief by requesting a(an): a. Variance b. Site plan exemption c. Special use exemption d. Nonconforming use exemption Reference: Ch. 19, Zoning Board of Adjustment

a. Variance

762. What is the status of an option without valuable consideration? a. Void b. Voidable only by the optionor c. Voidable only by the optionee d. Unenforceable Reference: Ch. 11, Option Contracts

a. Void

733. A broker loses $10,000 cash given to them by a customer. The broker is sued, resulting in a judgment of $10,000 against the broker. The Real Estate Recovery Fund paid the judgment on behalf of the broker. Payment from the recovery fund: a. Will result in a mandatory suspension b. Will result in mandatory revocation c. Will likely result in no penalty d. May result in criminal indictments Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

a. Will result in a mandatory suspension

891. Four apartment houses recently sold with the following statistics: Sales Price Annual Gross Income $1,200,000 $171,400 $1,520,400 $202,720 $1,244,000 $191,380 $1,748,800 $218,600 The subject property has a gross income of $169,000. What is the subject property worth? a. $1,218,000 b. $1,225,250 c. $1,428,300 d. $2,344,900 Reference: Ch. 16, Income Approach, Gross Income Multiplie

b. $1,225,250 GIM = Comparable sales price ÷ Annual gross income; GIM (1) = $1,200,000 ÷ $171,400 = 7; GIM (2) = $1,520,400 ÷ $202,720 = 7.5; GIM (3) = $1,244,000 ÷ $191,380 = 6.5; GIM (4) = $1,748,800 ÷ $218,600 = 8; Average GIM = (7 + 7.5 + 6.5 + 8 ) ÷ 4 = 7.25; Estimated value of subject property = 7.25 (GIM) x $169,000 (Income) = $1,225,250

892. A four-unit apartment building is valued at $150,000, with $30,000 in expenses and no vacancies. The owner requires a 20% return. What is the monthly rent per unit? a. $1,000 b. $1,250 c. $1,500 d. $1,750 Reference: Ch. 16, Income Approach

b. $1,250 Net operating income (NOI) = $150,000 x 0.20 = $30,000; We know that NOI = (PGI - V&C) - OE, so PGI = $30,000 (NOI) + $30,000 (OE) = $60,000; Monthly rent = $60,000 (PGI) ÷ 4 units ÷ 12 months = $1,250

792. A broker offers a tenant 1,450 square feet of office space at $10.50 per square feet. Calculate the monthly rent. a. $1,050.25 b. $1,268.75 c. $1,450.00 d. $1,470.50 Math Concept: Monthly rent = (Office space x price per square foot) ÷ 12

b. $1,268.75 Monthly rent = 1,450 sq. ft. x $10.50 ÷ 12 = $1,268.75

517. What is the maximum allowable payment from the Real Estate Recovery Fund as a result of one transaction? a. $10,000 b. $50,000 c. $75,000 d. $150,000 Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

b. $50,000

459. A house is purchased for $175,000. The buyer will assume the existing first mortgage with a balance of $110,512, and the seller will take back a purchase money second mortgage for $21,500. Calculate the total state documentary stamp taxes that will be charged in this transaction. a. $1,730.04 b. $1,730.35 c. $1,951.06 d. $1,951.37 Reference: Ch. 14, State Documentary Stamp Tax on the Deed, State Documentary Stamp Tax on a Promissory Note

b. $1,730.35 Tax on deed: ($175,000 ÷ $100) x $0.70 = $1,225; Tax on notes: $110,512 ÷ $100 = 1,106 tax units for assumed loan; $21,500 ÷ $100 = 215 tax units for 2nd mortgage; Tax on notes = (1,106 + 215) x $0.35 = $462.35; Intangible tax: $21,500 x .002 = $43; Total doc stamp tax = $1,225 + $462.35 + $43 = $1,730.35

886. What is the annual amount charged to a sales associate, in addition to a renewal fee, if the amount in the recovery fund drops below $500,000? a. $2.00 b. $1.50 c. $3.00 d. $3.50 Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

b. $1.50

435. A developer sells two lots that are each 60 feet by 100 feet for $20 per square foot each. On the first lot, she makes a 20% profit. On the second lot, she suffers a 20% loss. Calculate her net profit or loss. a. $5,000 b. $10,000 c. $15,000 d. $0, she broke even. Reference: Ch. 17, Calculating Profit on Investment

b. $10,000 Sales price per lot = $20 x 60 ft. x 100 ft. = $120,000; Lot 1 (20% profit): $120,000 = Paid x (100% + 20%); Paid = $120,000 ÷ 120% = $100,000, which is a gain of $20,000; Lot 2 (20% loss): $120,000 = Paid x (100% - 20%); Paid = $120,000 ÷ 80% = $150,000, which is a loss of $30,000; Net loss = $30,000 (Lot 2 loss) - $20,000 (Lot 1 gain) = $10,000

797. A property owner told a broker that he would list his home if a net of $120,000 could be received from the sale. If the broker's commission is 6% and closing costs are estimated to be $2,200, what should the listing price be? a. $122,200 b. $130,000 c. $127,200 d. $129,532 Reference: Ch. 11, Listing Contracts, Types of Listing Contracts - Net Listing

b. $130,000 Total costs without commission = $120,000 (Owner's net price) + $2,200 (Estimated closing costs) = $122,000; Listing price = $122,200 ÷ 0.94 = $130,000

168. An investment property has a potential gross income of $300,000, a vacancy rate of 5% and operating expenses including $13,000 of reserves for replacement totaling $140,000. What is the net operating income? a. $132,000 b. $145,000 c. $155,000 d. $160,000 Reference: Ch. 16, Income Approach - Direct Capitalization Technique, Step 5 illustration

b. $145,000 V&C ($300,000 x 5%) = $15,000; NOI = $300,000 (PGI) - $15,000 (V&C) - $140,000 (OE) = $145,000.

157. What amount of the second monthly payment would be applied to principal on a $180,000 loan with an annual interest rate of 6.5% for 30 years, with payments of $1,137.72? a. $162.72 b. $163.60 c. $974.12 d. $975.00 Reference: Ch. 13, Amortizing Loan Payments

b. $163.60 Month 1: I = $180,000 x .065 ÷ 12 = $975; Principal reduction = $1,137.72 - $975 = $162.72; New balance = $180,000 - $162.72 = $179,837.28. Month 2: I = $179,837.28 x .065 ÷ 12 = $974.12; Principal reduction = $1,137.72 - $974.12 = $163.60;

453. The sales price is $62,300 and the brokerage fee is 7%. The commission will be split as follows: MLS 5%, with the remaining 95% split between the sales associate (65%) and broker (35%). How much commission will the sales associate receive? a. $2,834.65 b. $2,692.92 c. $1,526.35 d. $1,450.03 Reference: Ch. 11, Listing Contracts, Calculating a Brokerage Commission

b. $2,692.92 Sales associate share = $62,300 x .07 x .95 x .65 = $2,692.92

796. A 20-unit building is rented for $2,000 a month less than the comparable buildings since it is too close to the railroad tracks. If the capitalization rate is 12%, how much is the loss of value? a. $333,333.33 b. $200,000.00 c. $57,600.00 d. $16,666.67 Reference: Ch. 16, Three Approaches to Value, Income Approach

b. $200,000.00 Annual rent income loss = $2,000 x 12 months = $24,000; Lost value = $24,000 (I) ÷ 0.12 (R) = $200,000

446. A five-year-old building has a reproduction cost of $100,000. The building requires a new roof, which will cost $4,000. Estimate the accrued depreciation based on a 25- year useful life. a. $29,000 b. $23,200 c. $19,200 d. $4,000 Reference: Ch. 16, Cost-Depreciation Approach

b. $23,200 Total depreciation rate = 5 ÷ 25 = 0.2; Total accrued depreciation over life = ($100,000 - $4,000) x 0.2 = $19,200; $19,200 + $4,000 (Roof) = $23,200

705. Carol buys a rental list for $350, looks at over 40 available apartments on the list, but is not satisfied with any of them. After three weeks, she requests a refund of her money. What is she entitled to receive? a. $175.00 b. $262.50 c. $350.00 d. Nothing Reference: Ch. 5, Rental Information

b. $262.50

898. A retail store is leased for $1,000 per month plus 2% of gross sales. If the rent for last month was $1,600, how much were the gross sales for the month? a. $20,000 b. $30,000 c. $32,000 d. $80,000 Math Concept: $1,600 = $1000 + (2% x Gross Sales)

b. $30,000 $1,600 = $1000 + (2% x Gross Sales), so ($1,600 - $1,000) = 2% x Gross sales; $600 = .02 x Gross sales; Gross sales = $600 ÷ 0.02 = $30,000

999. A man wanted to buy a $39,000 house. He was told the sale price couldn't exceed 2.5 times his income. How much must he earn per week? a. $250 b. $300 c. $350 d. $375 Math Concept: 2.5 x Annual income = $39,000; Annual income ÷ 52 weeks = earnings needed per week

b. $300 Annual Income = $39,000 ÷ 2.5 = $15,600; Earnings needed = $15,600 Annual income ÷ 52 weeks = $300 per week

452. The owner of a 150-foot by 200-foot warehouse wants to subdivide each of its four floors into ten-foot by 20- foot bins and rent out each bin for $6.00 per month; 20% of each floor will be unusable because of elevators, closets, bathrooms and hallways. What will the owner's annual income be? a. $34,200 b. $34,560 c. $43,200 d. $43,560 Math Concept: Find the total usable space and the size of each bin. Then, divide the usable space by the size of each bin to find the number of bins for all four floors. Then multiply by the annual rent.

b. $34,560 Total usable space per floor = 150' x 200' x 80% = 24,000; Bin size = 10' x 20' each = 200; Total number of bins = 24,000 ÷ 200 x 4 floors = 480; Annual income = 480 x $6 x 12 months = $34,560

894. A property has a potential income of $100,000, with vacancies and expenses of $51,000 and debt service of $30,000. Based on a 14% rate, what is the value of the property? a. $140,000 b. $350,000 c. $364,286 d. $686,000 Reference: Ch. 16, Income Approach, Direct Capitalization Technique

b. $350,000 NOI = $100,000 (PGI) - $51,000 (V&C and OE) = $49,000; Value = $49,000 (NOI) ÷ 0.14 (cap rate) = $350,000

776. Able, Baker, and Charlie form the ABC partnership to buy real estate. Each partner invests $25,000. The ABC partnership approaches broker Dave, who negotiates a sales contract with Evan. The partnership gives Dave a deposit check for $75,000. Broker Dave took the deposit money to Las Vegas and lost all of it playing blackjack. ABC sued the broker and obtained a judgment against him in the amount of $75,000. Dave could not pay the judgment, and a claim was filed with the Real Estate Recovery Fund. How much will FREC authorize the fund to pay? a. $75,000 b. $50,000 c. $50,000 each to Able, Baker, and Charlie d. $25,000 each to Able, Baker, and Charlie Reference: Ch. 6, Administrative Penalties, Florida Real Estate Recovery Fund

b. $50,000

456. An apartment complex has three apartments rented for $600.00 each, six apartments rented for $400.00 each, and six apartments rented at $300.00 each. All apartments are rented on a monthly basis, with rental payments due on or before the first of each month. If the gross rent multiplier is 85, what is the value of the property? a. $612,000 b. $510,000 c. $425,300 d. $357,000 Reference: Ch. 16, Income Approach - Gross Multiplier Technique

b. $510,000 Value = Gross monthly rent x GRM; Gross monthly rent = (3 x $600) + (6 x $400) + (6 x $300) = $6,000; Value = $6,000 x 85 = $510,000

439. A tenant pays rent at a cost of $5.00 per square foot. When he rents the property, the CPI (rent index) is at 1.5. The CPI goes up to 1.8. How much will his rent be increased to if it is based on the CPI? a. $5.50 per square foot b. $6.00 per square foot c. $7.50 per square foot d. $8.00 per square foot Math Concept: Set up a ratio between the current cost as CPI of 1.5 and the increased cost at a CPI of 1.8.

b. $6.00 per square foot $5 ÷ 1.5 = Increased rent ÷ 1.8, so Increased rent = ($5 ÷ 1.5) x 1.8 = $6

151. A lawn service company sold for $125,000. The tangible assets amounted to the lawn equipment valued at $48,000. The intangible assets were the customer base and the company's good reputation. What is the value of the intangible assets? a. $173,000 b. $77,000 c. $48,000 d. $38,500 Reference: Ch. 17, Accounting Terms

b. $77,000

998. A one-year term loan for $300 at 7.5%, with simple interest paid at the end of the term, has been repaid 11 months at $22.25 per month. What would the amount of the last payment be? a. $75.00 b. $77.75 c. $55.00 d. $100.00 Reference: Ch. 13, Loan Repayment Methods, Amortizing Loan Payments

b. $77.75 Since the interest is annual, borrower would repay $300 x 7.5% = $22.50 interest at the end of year one; $300 + $22.50 = $322.50 due at end of year one; $22.25 x 11 months = $244.75 already paid; After one year, the total amount due is $322.50 - $244.75 = $77.75.

916. How is 20 mills written? a. .002 b. .020 c. .0020 d. .200 Reference: Ch. 18, Tax Rates Expressed in Mills

b. .020

906. Which of the following pairs best describes 640 acres (more or less)? a. Tier, section b. 1/36 township, section c. Range, township d. Check, government lot Reference: Ch. 10, Government Survey Method

b. 1/36 township, section

950. Within what timeframe must real estate licensees notify the Department of a change of address? a. 5 days b. 10 days c. 60 days d. 30 days Reference: Ch. 5, Sales Associate's Duties, Change of Employer or Address

b. 10 days

1000. An investor realizes a net income of $925 per month on a $111,000 investment. What is his yield (return on investment)? a. 9% b. 10% c. 11% d. 12% Reference, Ch. 17, Evaluating Investment Properties

b. 10% Annual income = $925 x 12 months = $11,100; Return = $11,100 Annual income ÷ $111,000 Investment = 0.10 or 10

169. What is the monthly gross rent multiplier for a house that sold for $269,500, and was rented for $2,000 per month? a. 11.23 b. 134.75 c. 145.25 d. 156.10 Reference: Ch. 16, Gross Multiplier Technique, GRM

b. 134.75 GRM = $269,500 (Sales price) ÷ $2,000 (Monthly rent) = 134.75 GRM

808. How many acres are contained in 1/4 of a section? a. 640 b. 160 c. 40 d. 10 Reference: Ch. 10, Government Survey Method - Townships; Common Area Measurements

b. 160 One section = 640 acres, so ¼ of a section contains 640 ÷ 4 = 160 acres

598. Twenty-five mills means that the tax equals which of the following? a. 25% b. 2.5% c. .25% d. .025% Reference: Ch. 18, Real Property Taxation, Tax Rates Expressed in Mills

b. 2.5%

509. The defendant must file an answer to an administrative complaint within how many days? a. 15 b. 21 c. 30 d. 14 Reference: Ch. 6, The Disciplinary Process

b. 21

993. Mr. McDonald found a farm that was for sale under distress conditions. He bought the farm for 80% of market value and later resold the property for full market value. What percentage of profit did Mr. McDonald make on the transaction? a. 20% b. 25% c. 33% d. 50% Reference: Ch. 17, Calculating Profit on Investment

b. 25% Paid 80% of value, but sold it for 100%. So, 20% made upon sale. % Profit = 20% Made ÷ 80% Paid = 25%

248. If FREC imposed a fine and issued a final order, how much longer does the licensee have to pay the fine? a. 10 days b. 30 days c. 60 days d. 90 days Reference: Ch. 6, Citation Authority

b. 30 days

154. James, a potential buyer, is told by the lender that he can have a loan at an interest rate of 6%. When he goes to the closing, he notices that the truth-in-lending statement says the APR is 6.5%. Using the rule of thumb calculation, how many points were most likely charged? a. 3 b. 4 c. 5 d. 6 Reference: Ch. 12, Mortgage Loan Fees - Effective Yield

b. 4 Rule of thumb Æ each point charged adds 1/8%; Amount added was .5% or ½%, which is the same as 4/8% = 4 x 1/8, or 4 points.

84. How many acres does the following legal description contain? The S 1/2 of the SW 1/4 of the NW 1/4 and the N 1/2 of the NW 1/4 of the SW 1/4 of a Section a. 20 b. 40 c. 625 d. 640 Reference: Ch. 10, Government Survey Method, Calculating Acreage in a Parcel Containing Contiguous Tracts

b. 40 Tract 1: 640 ÷ 4 = 160; 160 ÷ 4 = 40; 40 ÷ 2 = 20 acres. Tract 2: 640 ÷ 4 = 160; 160 ÷ 4 = 40; 40 ÷ 2 = 20 acres; Total = 20 (Tract 1) + 20 (Tract 2) = 40 acres

405. Which is best description of a township? a. 1 square mile b. 6 miles square c. 36 miles square d. 6 square miles Reference: Ch. 10, Government Survey Method - Township. Note: One mile square is not the same as one square mile.

b. 6 miles square

442. A corner lot measures 100 feet by 100 feet. The only restriction is a ten-foot setback from the road. What is the maximum usable square footage? a. 8,000 square feet b. 8,100 square feet c. 9,000 square feet d. 10,000 square feet Math Concept: Subtract the setback amount from both the length and width of the lot to find the maximum usable square footage.

b. 8,100 square feet (100 ft. - 10 ft.) x (100 ft. - 10 ft.) = 90 ft. x 90 ft. = 8,100 sq. ft.

795. Mr. Miller is going to purchase a property with the following financing: There is an existing first mortgage with a balance of $100,000 with an interest rate of 9%, and a second mortgage of $50,000 with an interest rate of 8%. What is the blended rate? a. 8.50% b. 8.67% c. 9.00% d. 17.00% Math Concept: Blended rate = Total interest paid ÷ Total loan amount

b. 8.67% 1st mortgage interest = $100,000 x .09 = $9,000; 2nd mortgage interest = $50,000 x .08 = $4,000; Total interest = $9,000 + $4,000 = $13,000; Blended rate = $13,000 (Total interest paid) ÷ $150,000 (Total loan amount) = 0.08666, or 8.67%

158. Sandy is purchasing a home for $570,000, with a down payment of $114,000. If she finances the difference, what is the loan-to-value ratio? a. 85% b. 80% c. 65% d. 60% Reference: Ch. 12, Lender Risk, Loan-to-Value Ratio

b. 80% LTV = ($570,000 - $114,000) Loan amount ÷ $570,000 Value = 0.8 or 80%

905. What type of commercial market would exist if there were an excess amount of office space for rent? a. A sellers' market b. A buyers' market c. A suppliers' market d. All of the above Reference: Ch. 15, Supply and Demand, Competition in the Marketplace

b. A buyers' market

940. Prior to being sold as a timeshare, which type of building must it have been? a. A cooperative b. A condominium c. An estate for years d. A fee simple estate Reference: Ch. 8, Condominiums, Cooperatives, and Timeshares, Timeshare Ownership

b. A condominium

757. Abby purchased a house with her son and daughter-in-law. The deed required that if one of the three partners died, the interest of the deceased would pass to the remaining tenants. Of which type of estate is this an example? a. A tenancy by the entireties b. A joint tenancy c. An estate in severalty d. A tenancy at sufferance Reference: Ch. 8, Estates

b. A joint tenancy

544. Under what condition may the FREC revoke a license without prejudice? a. An applicant fails the state exam b. A license was issued by mistake c. A sales associate had a real estate license revoked in another state d. An applicant did not correct errors or omissions on their application within 30 days Reference: Ch. 6, Administrative Penalties, Range of Penalties - Revocation

b. A license was issued by mistake

324. From which type of loss can zoning protect an owner? a. A loss in value due to decreased demand b. A loss in value in a residential area with urban encroachment c. A loss due to flooding d. A loss due to a change in market conditions Reference: Ch. 19, Purpose of Zoning

b. A loss in value in a residential area with urban encroachment

990. Complete the sentence. A convenience store located in an area that has now been zoned for residential use only would be: a. Made to move b. A nonconforming use c. A variance d. A special use exception Reference: Ch. 19, Zoning, Land Use Restrictions, and Building Codes, Zoning Board of Adjustment

b. A nonconforming use

626. Mary deeds John a property for John's lifetime. Upon John's death, the property will transfer to Fred. What is Fred's interest in the property? a. An estate in reversion b. A remainder estate c. A tenancy in waiting d. A tenancy in entirety Reference: Ch. 8, Estates

b. A remainder estate

627. A valid real estate sales contract requires all of the following, EXCEPT: a. An offer and acceptance communicated to all parties b. A substantial earnest money deposit c. A written form d. The signatures of all parties Reference: Ch. 11, Contracts, Essentials of a Valid Contract

b. A substantial earnest money deposit

60. A broker receives a kickback or referral fee from a title insurance company. This practice is: a. Legal b. A violation of RESPA c. Legal; however, not recommended d. Illegal; however, FREC will allow it to continue as long as the broker is active Reference: Ch. 13, Laws Regarding Fair Credit and Lending Procedures

b. A violation of RESPA

767. A sales associate agrees to give part of his commission to the seller, provided that the seller agrees to send the sales associate at least one hot buyer prospect. This is: a. A violation, because the sales associate did not check with the broker b. A violation, because F.S. 475, prohibits compensating unlicensed individuals for referrals c. Not a violation as the compensation does not exceed $1,000 d. Not a violation Reference: Ch. 4, Broker's Right to Compensation, Referral Fees

b. A violation, because F.S. 475, prohibits compensating unlicensed individuals for referrals

375. Which of the following could be an example of external obsolescence? a. The architectural design of a building b. A zoning change in the area c. Peeling paint on the exterior of the building d. An outdated oil-burning range in the kitchen Reference: Ch. 16, Cost-Depreciation Approach

b. A zoning change in the area

707. Sales associate Aaron sells a home that was listed by broker Bob. Who must pay Aaron's share of the commission? a. Any party as long as the amount is as agreed upon b. Aaron's broker c. Either Aaron's broker or broker Bob d. Any party, since Aaron is licensed, and therefore can be compensated by anyone Reference: Ch. 6, Sales Associate's Duties

b. Aaron's broker

333. What is the primary reason for the increased need for property managers over recent years? a. Farming b. Absentee ownership c. Stricter license law d. Channeling Reference: Ch. 1, Specialization within the Real Estate Profession, Property Management

b. Absentee ownership

107. Which term refers to the process of sand deposits building up over time, causing an increase in land? a. Reliction b. Accretion c. Erosion d. Alluvion Reference: Ch. 8, Real Property

b. Accretion

284. What is the name for the gradual buildup of sand on the riparian or littoral owner's shoreline by natural causes? a. Alluvial b. Accretion c. Reliction d. Aeolian Reference: Ch. 8, Real Property

b. Accretion

970. With which type of mortgage could negative amortization occur due to payment caps? a. Purchase money mortgages b. Adjustable rate mortgages c. Blanket mortgages d. Reverse mortgages Reference: Ch. 13, Types of Mortgages

b. Adjustable rate mortgages

471. Which of the following items would typically appear as debits to the seller on the closing statement? a. First mortgage interest, purchase price, and expenses b. Assumed mortgage interest, taxes, and expenses c. Expenses, deposit, and purchase price d. Taxes, mortgage interest, and purchase price Reference: Ch. 14, Section 2 - Prorations and Prepayments

b. Assumed mortgage interest, taxes, and expenses

834. To be eligible to receive VA mortgage benefits, how long must a veteran who was in the military in 1977 have served? a. Not more than 180 days b. At least 181 days c. Not more than 160 days d. At least 160 days Reference: Ch. 13, Types of Mortgages, VA Guaranteed Loans

b. At least 181 days

150. Which financial statement shows the status of a business as of a specific date? a. Income statement b. Balance sheet c. Profit and loss statement d. IRS Form 1040 Reference: Ch. 17, Business Brokerage

b. Balance sheet

148. What are the two most important financial summary statements of a business? a. Working capital and depreciation reports b. Balance sheet and income statement c. Cash flow and asset reports d. Tax returns and asset report Reference: Ch. 17, Business Brokerage

b. Balance sheet and income statement

330. All REALTORS are licensees, but not all licensees are REALTORS. What must a licensee do to become a REALTOR? a. File with FREC b. Become a member of a local Association of REALTORS c. Complete a FREC educational program d. Complete 45 hours of post-license education Reference: Ch. 1, Professional Organizations

b. Become a member of a local Association of REALTORS

353. What type of loan covers several parcels of land? a. Package mortgage b. Blanket mortgage c. Balloon mortgage d. Purchase money mortgage Reference: Ch. 13, Types of Mortgages

b. Blanket mortgage

845. A sales associate tells a customer that he should sell his home because of in-migration of a certain ethnic group. What is the term used to describe this situation? a. Commingling b. Blockbusting c. Redlining d. Channeling Reference: Ch. 7, Federal Fair Housing Laws, Federal Fair Housing Act

b. Blockbusting

573. Bob wishes to open a residential real estate corporation, along with a property management corporation. Bob wishes to be the active broker for both corporations. Which statement is correct? a. Bob will not be allowed to do this. b. Bob must hold multiple licenses. c. Bob will be allowed to do this only if he takes the state exam twice. d. Bob will have to hire another broker for the second corporation. Reference: Ch. 3, Group License and Multiple Licenses

b. Bob must hold multiple licenses.

482. A broker held up a bank and escaped with a large amount of cash. What is the consequence if the broker is apprehended? a. Broker's license must be revoked. b. Broker is subject to discipline by the Florida Real Estate Commission. c. Broker must be suspended. d. Florida Real Estate Commission may impose a fine of $1,000 and imprison the broker for no more than one year. Reference: Ch. 6, Exhibit 6.3(g)

b. Broker is subject to discipline by the Florida Real Estate Commission.

814. A buyer makes an offer, and the deposit is placed into the broker's escrow account. At this point, to whom does the deposit belong? a. Broker b. Buyer c. Seller d. Buyer and seller Reference: Ch. 5, Escrow Funds, Broker's Rights to Escrowed Funds

b. Buyer

675. A Georgia broker and a Florida broker form a joint venture to sell a Florida property that a friend of the Georgia broker owns. The Georgia broker comes down to assist the Florida broker in the sale of the property. The Florida broker: a. May share the commission with the Georgia broker b. Cannot pay the Georgia broker part of the commission c. Can pay the Georgia broker only a referral fee d. Can pay the Georgia broker only for expenses and travel Reference: Ch. 4, Broker's Right to Compensation, Referral Fees

b. Cannot pay the Georgia broker part of the commission

561. A seller sells an income-producing property for a $42,000 profit. What is the tax implication for the seller? a. No capital gains tax is required if the profits are reinvested within 24 months. b. Capital gains tax must be paid on the entire profit, less any allowable depreciation. c. Capital gains tax must be paid on 20% of the profit. d. The alternative minimum tax must be paid. Reference: Ch. 17, Impact of Federal Taxation, Capital Gains Tax

b. Capital gains tax must be paid on the entire profit, less any allowable depreciation.

907. What is an abstract of title? a. Guarantee of title b. Chain of information c. Deed of restriction d. Warrantee of title Reference: Ch. 9, Protecting Title

b. Chain of information

69. The initial tax exemption for homestead is available only to owners that: a. Claimed the property as their principal residence as of January 1 and filed by April 15 b. Claimed the property as their principal residence as of January 1 and filed by March 1 c. Claimed their property as their principal residence as of March 1 and filed by April 15 d. Recorded their deed by January 1 and filed by April 1 Reference: Ch. 18, Homestead Tax Exemption

b. Claimed the property as their principal residence as of January 1 and filed by March 1

219. A seller listed their property at a price that the broker knew was below market value. The broker had his wife buy the property in her maiden name and subsequently resold the property at a profit. What could the broker be charged with? a. Nothing b. Concealment and fraud c. Alienation of affection d. Culpable negligence Reference: Ch. 4, Illegal Commissions; Ch. 6, Administrative Penalties, Fraudulent Activities

b. Concealment and fraud

936. What is the term used to refer to the process used by the government to exercise its power of eminent domain? a. Conversion b. Condemnation c. Concealment d. Estoppel Reference: Ch. 9, Limitations on Property Ownership, Government Limitations on Private Property Ownership

b. Condemnation

378. Which principle of value indicates that the value of a property is sustained when the property is harmoniously used with surrounding properties in the same area? a. Contribution b. Conformity c. Balance d. Highest and best use Reference: Ch. 16, Appraisal Concepts and Definitions, Principles of Value

b. Conformity

622. What term is used to refer to a lien imposed on a property for nonpayment of materials or labor to improve a property? a. Vendor's lien b. Construction lien c. Tax lien d. Judgment lien Reference: Ch. 9, Liens

b. Construction lien

826. Recording a mortgage is which form of notice? a. Actual b. Constructive c. Legal d. Lien Reference: Ch. 12, Mortgage Theories and Documents Related to Loans, Recording the Mortgage

b. Constructive

983. What would a broker be guilty of if they took escrow funds and placed them in a personal account? a. Concealment b. Conversion c. Culpable negligence d. Nothing; this is a legal act as long as the broker keeps accurate accounting of all funds Reference: Ch. 5, Escrow Funds, Escrow Account

b. Conversion

560. Which business structure may NOT act as a real estate broker? a. Joint venture b. Corporation sole c. Corporation for profit d. a and b Reference: Ch. 5, Types of Business Formations

b. Corporation sole

428. Factors of demand in residential real estate include all of the following, EXCEPT: a. Price b. Cost c. Income d. Credit Reference: Ch. 15, Demand

b. Cost

252. A licensee becomes a convicted felon serving a prison term. The Commission: a. Would probably suspend the license for the length of the term b. Could revoke the license c. Will revoke the license d. Will suspend the license Reference: Ch. 6, Range of Penalties; Exhibit 6.3

b. Could revoke the license

982. On a closing statement, how would a purchase money second mortgage obtained from the seller be entered? a. Credit to seller, debit to buyer b. Credit to buyer, debit to seller c. Debit to seller, receipt for broker d. Credit to seller, disbursement by broker Reference: Ch. 13, Loan Repayment Methods, Purchase Money Mortgage; Ch. 14, Section 1 - Total Purchase Price

b. Credit to buyer, debit to seller

67. The purpose of the homestead exemption is to protect the surviving spouse and children and to exempt property from foreclosure for: a. Property taxes b. Debts other than direct debts and federal liens c. Mortgage debts d. All debts Reference: Ch. 8, Constitutional Homestead Rights

b. Debts other than direct debts and federal liens

77. Complete the sentence. The ownership of a property actually transfers from the grantor to the grantee when the deed is: a. Notarized and recorded b. Delivered and accepted c. Signed by the grantee and witnessed d. Signed by the grantee and recorded Reference: Ch. 9, Deeds - Transferring Title

b. Delivered and accepted

803. What is the likely result if the federal government starts selling T-bills? a. Intermediation b. Disintermediation c. Loanable funds to increase d. Interest rates to decline Reference: Ch. 13, Money in the Marketplace

b. Disintermediation

616. Which is considered to be an interest in real property? a. Deed restriction b. Easement c. Encroachment d. Survey Reference: Ch. 9, Private Limitations on Property Ownership

b. Easement

382. An appraiser is appraising an apartment building in a college town and finds that the students' leases are below the market. What type of rental income would the appraiser use to value the property? a. Gross rent b. Economic rent c. Contract rent d. Base rent Reference: Ch. 16, Income Approach

b. Economic rent

486. Peggy and Joan wish to form a partnership to buy and sell real estate for others. Which statement is correct? a. Peggy and Joan must both be actively licensed brokers. b. Either Peggy or Joan must be an actively licensed broker. c. If Peggy is an actively licensed broker, Joan must be an inactively licensed broker or be registered as an unlicensed partner. d. If Joan is an actively licensed broker, Peggy must be an actively licensed sales associate or broker associate. Reference: Ch. 5, Types of Business Formations, Real Estate Brokerage Partnership

b. Either Peggy or Joan must be an actively licensed broker.

363. Savings associations look to what agency to sell their mortgages? a. FDIC b. Freddie Mac c. RTC d. FHA Reference: Ch. 13, The Secondary Mortgage Market

b. Freddie Mac

554. George has a residence in Ft. Lauderdale and a summer home near Daytona Beach. He and his family spend every weekend as well as two months each summer in Daytona. On which property does the Florida homestead law allow him to qualify for homestead exemption? a. Ft. Lauderdale only b. Either property, but he can claim only one exemption c. Daytona Beach only d. Neither property Reference: Ch. 18, Real Estate Tax Exemptions and Limitations, Homestead Tax Exemption

b. Either property, but he can claim only one exemption

301. Which covenant in a deed assures the grantee that there are no claims or liens on the property other than those specifically listed on the deed? a. Warrant of quiet enjoyment b. Encumbrance clause c. Seizin clause d. Warrant of further assurance Reference: Ch. 9, Warrants or Covenants in Deeds

b. Encumbrance clause

775. A buyer gives a deposit check on a sale of a house to the sales associate and inadvertently makes the check out to the sales associate. What should the sales associate do? a. Cash the check and give the broker the cash b. Endorse the check and give it to employing broker c. Endorse the check and deposit it in a personal account d. Endorse the check and deposit it in their escrow account Reference: Ch. 5, Escrow Funds

b. Endorse the check and give it to employing broker

322. What is the term that is applied to the practice of keeping low-income people out of a particular neighborhood? a. Zoning b. Exclusionary zoning c. Nonconforming use d. Subdivision exception Reference: Ch. 19, Purpose of Zoning

b. Exclusionary zoning

344. Which clause in a mortgage requires the lender to look to the mortgaged property only for satisfaction? a. Defeasance clause b. Exculpatory clause c. Cognovit clause d. Subordination clause Reference: Ch. 12, Essential Elements of a Mortgage

b. Exculpatory clause

664. Which would never appear in a real estate sales contract? a. Remedies for breach b. Exculpatory clause c. Time for occupancy and closing d. Financing provisions Reference: Ch. 11, Real Estate Sales Contracts, Information Included in a Sales Contract; Ch. 12, Essential Elements of a Mortgage

b. Exculpatory clause

197. Which entity signs the certificates of the FREC meetings that reflect the actions of the Commission? a. Secretary of state b. FREC chairperson or vice chairperson c. Chief investigator of the DRE d. Any FREC commissioner Reference: Ch. 3, Documentation of Proceedings of the Commission

b. FREC chairperson or vice chairperson

920. What is the term used to refer to a real estate licensee who is specializing in a certain geographic area? a. Steering b. Farming c. Speculating d. Following-up Reference: Ch. 1, Introduction to the Real Estate Market

b. Farming

651. Which entity may insure home loans made by approved lenders? a. Federal Deposit Insurance Corporation b. Federal Housing Administration c. Florida Department of Insurance d. Department of Veterans Affairs Reference: Ch. 13, The Primary Mortgage Market, Mortgage Lenders

b. Federal Housing Administration

857. Which of the following acts like an insurance company? a. Federal Reserve System b. Federal Housing Administration c. National Association of REALTORS d. Fannie Mae Reference: Ch. 13, Types of Mortgages

b. Federal Housing Administration

361. Which entity controls the U.S. monetary policy? a. President of the United States b. Federal Reserve System c. Federal Trade Commission d. Federal Housing Finance Board Reference: Ch. 13, Federal Reserve System

b. Federal Reserve System

280. Which type of estate is the most comprehensive? a. Life estate b. Fee simple estate c. Estate for years d. Estate at will Reference: Ch. 8, Estates

b. Fee simple estate

275. Widow McFee found that her deceased husband left his entire estate, except for homestead, to his secretary. What can Widow McFee do? a. File for her dower share of one-third of all real property owned by her deceased husband b. File for an elective share of 30% of all real and personal property owned by her deceased husband c. File for 100% of his property under Florida's community property law d. Only file a civil suit to contest the will Reference: Ch. 8, Estates

b. File for an elective share of 30% of all real and personal property owned by her deceased husband

281. What would a developer do to help a development hold its value? a. File a plat map b. File subdivision restrictive covenants c. Order surveys d. Obtain a zoning variance Reference: Ch. 9, Private Limitations on Property Ownership

b. File subdivision restrictive covenants

593. How many acres does a parcel of land measuring 330 feet by 660 feet contain? a. Three b. Five c. Seven d. Nine Reference: Ch. 10, Common Area Measurements

b. Five 330 ft. x 660 ft. = 217,800 sq. ft.; Since one acre = 43,560 square feet, 217,800 sq. ft. ÷ 43,560 sq. ft. per acre = 5 acres

918. How long may an unlicensed person be imprisoned if found to be in violation of F.S. 475? a. Not at all b. For up to five years c. For up to six months d. For up to one year Reference: Ch. 6, Criminal Penalties, Third-Degree Felonies

b. For up to five years

441. A person owns an acre of property. After allowing for a road 60 feet wide and 246 feet long, how many 80-foot by 90-foot lots could be developed? a. Three lots b. Four lots c. Five lots d. Six lots Reference: Ch. 10, Common Area Measurements

b. Four lots One acre = 43,560 sq. ft.; Area of road = 60 ft. x 246 ft. = 14,760 sq. ft.; Area remaining = 43,560 (Total area) - 14,760 (Road) = 28,800 sq. ft.; Each lot = 80 ft. x 90 ft. = 7,200 sq. ft.; # of lots = 28,800 ÷ 7,200 = 4

387. A house has a bathroom built onto the side of the kitchen. The bathroom has a laundry tub but no room for a bathtub. What is this an example of? a. Physical deterioration b. Functional obsolescence c. External obsolescence d. Economic obsolescence Reference: Ch. 16, Cost-Depreciation Approach

b. Functional obsolescence

829. A sales associate helps her aunt rent an apartment. To show her gratitude, the aunt gives her niece a $250 commission. What should the sales associate do with the $250? a. Give it back to her aunt. b. Give it to her broker. c. Keep it. d. Keep it, but only with her aunt's permission. Reference: Ch. 4, Broker's Right to Compensation

b. Give it to her broker.

740. A broker receives a deposit on a property, but the seller rejects the offer. What should the broker do? a. Retain the deposit until they can talk the seller into accepting b. Give the deposit back to the buyer c. Keep the deposit while the buyer looks for another property d. Notify FREC immediately Reference: Ch. 5, Escrow Funds, Broker's Rights to Escrowed Funds

b. Give the deposit back to the buyer

295. If an unrecorded deed is accidentally destroyed, who owns the property? a. Title holder of record b. Grantee c. Vendor d. Grantor Reference: Ch. 9, Deeds

b. Grantee

121. The highest and best use of a parcel of land is the use that creates which of the following? a. Greatest density b. Greatest value for the land c. Greatest intensity d. Greatest tax base Reference: Ch. 15, Highest and Best Use

b. Greatest value for the land

606. All of the following are factors of production in a free enterprise system, EXCEPT: a. Capital b. Growth c. Labor d. Management risk-taking Reference: Ch. 15, The Free Enterprise System

b. Growth

750. A broker sells a property to a buyer. The buyer asks if an attorney is needed to close. The broker tells the buyer that he has sold this same property on several different occasions without a problem, and that the property has never had a title problem. He therefore advises that an attorney is not required. The broker: a. Has done nothing wrong b. Has violated F.S. 475 c. Would be guilty only if a cloud shows up on title d. Should apologize to the buyer for the poor information Reference: Ch. 6, Administrative Penalties, Fraudulent Activities - Rendering Opinion of Title

b. Has violated F.S. 475

260. A broker has a Texas securities license as well as a Florida real estate license. The broker commits fraud on a securities transaction in Texas and agrees to make full restitution. Most likely the broker will: a. Have nothing happen in Florida because it was an out of state securities matter b. Have the Florida broker's license revoked or suspended c. Have nothing happen because he made restitution d. Be sentenced to 90 days of community service by FREC Reference: Ch. 6, Range of Penalties; Exhibit 6.3

b. Have the Florida broker's license revoked or suspended

262. A buyer enters a broker's office and requests to be shown only houses in black neighborhoods. The broker advises the buyer that he will show him houses without regard to the racial characteristics of the neighborhood. The broker shows the buyer houses in both predominately black and predominately white neighborhoods. The buyer is interested in two of the houses in the predominately-black neighborhoods. If the broker had followed the buyer's initial instructions, he would: a. Have violated federal laws but not the Florida real estate license law b. Have violated the Civil Rights Act and Florida law and could have his license suspended or revoked c. Not have violated any laws since he must follow his seller's instructions d. Not have violated any laws since he must follow his buyer's instructions Reference: Ch. 7, Federal Fair Housing Laws

b. Have violated the Civil Rights Act and Florida law and could have his license suspended or revoked

192. XYZ Development Corp. was developing a PUD (planned unit development) in Carol City. Sales associate Green, employed by XYZ Corp., was employed to sell vacant home sites. XYZ Corp. had a subsidiary company, the Sunshine Corp., in another city 200 miles away, developing another PUD. If sales associate Green is transferred to the Sunshine Corp., which statement is correct? a. He could apply for a multiple license and notify the FREC. b. He could apply for a group license and notify the FREC. c. This would be a violation of F.S. 475. d. As long as he notified XYZ Corp., this is legal. Reference: Ch. 3, Group License and Multiple Licenses

b. He could apply for a group license and notify the FREC.

22. Karl's license expired on September 30, 2015. On February 10, 2019 he wants to activate it again. Which is correct? a. He must complete 28 hours of continuing education. b. His license is null and void. c. He must complete 42 hours of continuing education. d. He must complete 45 hours of postlicense education. Reference: Ch. 3, Active and Inactive License Status

b. His license is null and void.

65. Who owns the property in a tenancy by the entireties? a. Two cohabitating adults b. Husband and wife c. Entirely one person d. An entire family Reference: Ch. 8, Freehold Estates

b. Husband and wife

487. Broker Stan showed Benny a 30- year-old home owned by Chuck. Benny was concerned about the age of the house, but Stan convinced Benny to buy it for the listed price of $89,000 by promising to buy the home from Benny for the full price within three months if Benny found the home to be unsatisfactory. Which statement is correct? a. Stan's promise violates the license law, and he is subject to disciplinary action. b. If Benny asks Stan to purchase the home from him, and Stan refuses, Stan would be in violation of the license law. c. Stan would not be required under the license law to purchase the home from Benny. d. Chuck would be required to repurchase the property as the broker was acting as his agent in the transaction. Reference: Ch. 6, Administrative Penalties, Fraudulent Activities - Promise to Resell

b. If Benny asks Stan to purchase the home from him, and Stan refuses, Stan would be in violation of the license law.

702. A sales associate receives an offer from the buyer along with a postdated check. What action must the sales associate take? a. Return it, as postdated checks are illegal in Florida b. Immediately turn it over to the broker c. Cash the check on the appropriate date, and give the money to the broker d. Hold the check until the appropriate date, and deposit into the escrow account Reference: Ch. 5, Escrow Funds, Depositing Escrow Funds

b. Immediately turn it over to the broker

384. A man lives in a neighborhood of $50,000 homes. He decides to install expensive imported marble tile throughout the home. Of which type of depreciation is this an example? a. Incurable physical depreciation b. Incurable functional depreciation c. Curable functional depreciation d. Curable physical depreciation Reference: Ch. 16, Cost-Depreciation Approach

b. Incurable functional depreciation

865. To what does blockbusting refer? a. Choosing which properties to show a prospect based on a protected class b. Inducing owners to sell because of a migration of ethnic groups into the neighborhood c. Avoiding lending mortgage money in certain neighborhoods because of a protected class d. Excluding protected classes from living in a particular neighborhood Reference: Ch. 7, Federal Fair Housing Laws

b. Inducing owners to sell because of a migration of ethnic groups into the neighborhood

755. A broker sells a house to a buyer and recommends a particular title company. The title company forwards a referral fee to the broker. The broker: a. Has done nothing wrong as this is considered normal business practice b. Is in violation of the law c. May accept the fee if they advise the seller d. May accept the fee if they advise the buyer Reference: Ch. 5, Broker's Right to Compensation, Referral Fees

b. Is in violation of the law

430. Which statement applies to the real estate market? a. It is organized centrally. b. It cannot be allowed to operate free of controls. c. It must be allowed to operate free of controls. d. It responds rapidly to changes in supply and demand. Reference: Ch. 15, Characteristics of the Real Estate Marke

b. It cannot be allowed to operate free of controls.

779. All of the following statements are correct regarding a corporation sole, EXCEPT: a. Title passes to the successor in office. b. It may broker real estate. c. It may list real estate with a broker. d. It may sell its own real estate. Reference: Ch. 5, Types of Business Formations, Corporation Sole

b. It may broker real estate.

493. Broker Paul was served a subpoena to testify in court. Paul introduced his license into evidence to support his qualifications to testify. What did Paul achieve by this action? a. It is a rebuttable presumption. b. It serves as prima facie evidence of the broker's license status. c. Nothing; it has no effect in a court of law. d. Nothing; it is not required to be presented since the broker had been served a subpoena. Reference: Ch. 2, Licensure and Registration; Ch. 3, The Florida Real Estate Commission, Documentation of Proceedings of the Commission

b. It serves as prima facie evidence of the broker's license status.

68. Which tenancy contains the right of survivorship? a. In common b. Joint c. Sufferance d. At will Reference: Ch. 8, Estates

b. Joint

507. Frank and Harry own a property. Frank dies, and the property passes to Harry. How was the property held? a. Tenancy by the entireties b. Joint estate c. Tenancy at will d. Community property Reference: Ch. 8, Estates

b. Joint estate

186. Jasper Judd is a salaried resident manager of the Golden Age Condominium complex. Adolph Ajax, an owner of one of the units in the condominium, has asked Jasper to lease his unit while he is away on an extended trip to Bulgaria. Jasper may: a. Lease out the unit for any period of time, as long as he is not compensated. b. Lease out the unit for Adolph for not more than one year, as long as he is not compensated in addition to his salary. c. Not lease out the unit since this would violate F.S. 475. d. Lease out the unit but may not be compensated more than $100. Reference: Ch. 2, Individuals Who are Exempt from Licensure

b. Lease out the unit for Adolph for not more than one year, as long as he is not compensated in addition to his salary.

286. Which type of interest in real property is created by a type of contractual agreement having all essential elements of a contract, plus a property description and a definite term of tenancy? a. Tenancy at will b. Leasehold c. Fee simple estate d. Life estate Reference: Ch. 8, Estates

b. Leasehold

965. What does the seller become when a property owner sells a property and immediately leases it back? a. Lessor b. Lessee c. Vendee d. Mortgagor Reference: Ch. 9, Leases

b. Lessee

424. When the county assesses property and collects taxes, what are they doing? a. Establishing the base rate b. Levying taxes c. Assessing taxes d. Establishing a millage rate Reference: Ch. 18, Property Tax Assessments

b. Levying taxes

749. Mr. Black listed his farm "Blackacre" as being 20 acres with broker Bob for sale at $200,000. Bob obtained an offer from Joe to purchase at $10,000 per acre. The survey showed the farm contained only 18 acres, and since Mr. Black had accepted the offer, the transaction was closed at an $180,000 sales price. Mr. Black is: a. Liable for a commission on the listed price of $200,000 since the farm was described in the listing as containing 20 acres b. Liable for the full and customary percentage on the selling price of $180,000 c. Not liable for the commission since the amount of the commission was not agreed upon, and broker Bob did not check the acreage d. Liable for a commission, but not the full and customary percentage, since the sale was for $20,000 less than the listed price Reference: Ch. 4, Broker's Right to Compensation

b. Liable for the full and customary percentage on the selling price of $180,000

250. A broker who has been charged with a minor violation where no threat to the safety of the public exists, will probably have which action taken? a. License revocation b. License suspension c. Citation d. Reprimand Reference: Ch. 6, Range of Penalties; The Disciplinary Process - Step 2

b. License suspension

483. Which statement is true with respect to limited partners in a limited partnership formed to broker real estate? a. All limited partners must be brokers, either active or inactive. b. Limited partners are not allowed to perform management services. c. Actively licensed limited partners may perform management services for the partnership. d. All limited partners must be licensed as inactive brokers or inactive sales associates. Reference: Ch. 5, Types of Business Formations, Limited Partnership

b. Limited partners are not allowed to perform management services.

614. How does the Marketable Record Title to Real Property Act (MARTA) relate to curing defects in title? a. Requires the title examiner to search back to the original conveyance of title, in order to prove that the title is free and clear of any claims b. Limits the period of search required to establish valid and marketable "root of title" to at least 30 years c. Requires that if an unrecorded deed is accidentally destroyed, the grantee is recognized as having a marketable record of title d. Requires any recorded instrument or court preceding that affects title to any estate or interest in land and that sufficiently describes the land to identify its location and boundaries Reference: Ch. 9, Deeds, Curing Defects in Title

b. Limits the period of search required to establish valid and marketable "root of title" to at least 30 years

948. Which type of risk is the risk that an investment property cannot be bought or sold quickly enough to prevent loss? a. Business risk b. Liquidity risk c. Financial risk d. Static risk Reference: Ch. 17, Real Estate Investment Terminology, Risk

b. Liquidity risk

952. Which term refers to the rights an owner has because their property is lakefront? a. Alluvion rights b. Littoral rights c. Allodial rights d. Accretion rights Reference: Ch. 8, Real Property

b. Littoral rights

478. Owner Tim was in need of cash and contacted broker Mildred to list his property. Mildred inspected the property and advised Tim that the house was worth $90,000. Since Tim had to sell quickly, he listed the property for $84,000. Mildred acquired a 60-day option for $1,500 consideration and sold the property two weeks later for $92,000. Which choice is correct? a. Mildred has committed fraud. b. Mildred may retain the difference. c. Tim only owes Mildred a commission. d. Tim should file a civil action against Mildred. Reference: Ch. 11, Option Contracts, Option Contracts as Listings

b. Mildred may retain the difference.

96. What is the name for the legal document that pledges a property as security for a loan? a. Promissory note b. Mortgage c. Title d. Bond Reference: Ch. 12, Mortgage Theories, and Documents Related to Loans

b. Mortgage

44. Which punishment would FREC likely impose for a first offense against a broker found guilty of a minor violation? a. $500 fine b. Notice of noncompliance c. Citation d. Suspension Reference: Ch. 6, Administrative Penalties

b. Notice of noncompliance

566. A new sales associate does not complete the post-license education before the first renewal. What is the sales associate's license status? a. Suspended b. Null and void c. Revoked d. Cancelled Reference: Ch. 2, Renewing a Florida Real Estate License, Post-License (First Renewal) Requirements

b. Null and void

297. Complete the statement to make it correct. An easement is the legal right of use: a. Of another's property for any purpose b. Of another's property for a specific purpose c. For up to seven years d. For up to 20 years Reference: Ch. 9, Private Limitations on Property Ownership

b. Of another's property for a specific purpose

414. What is one mill? a. One-hundredth of a dollar b. One-thousandth of a dollar c. One-hundredth of a penny d. One-tenth of a dime Reference: Ch. 18, Tax Rates Expressed in Mills

b. One-thousandth of a dollar

74. What is actual notice? a. Recording the deed in the public records b. Possession of the property that can be seen and heard c. Less valid than constructive notice d. Notarizing the documents of transfer Reference: Ch. 9, Title, Notice of Ownership

b. Possession of the property that can be seen and heard

613. A sales associate represents a buyer in a transaction and is asked to give an opinion about the title. What may the sales associate do? a. Tell the buyer he is no longer interested in representing them b. Quote an opinion from a competent attorney c. Tell the buyer that they don't need a title opinion because it was just checked six months ago d. Tell the buyer that there will be an additional charge for the sales associate to give a title opinion Reference: Ch. 6, Administrative Penalties, Fraudulent Activities - Rendering an Opinion of Title; Ch. 9, Protecting Title

b. Quote an opinion from a competent attorney

866. What instrument must be recorded in order to convey a title back to the mortgagor in a deed of trust? a. Quitclaim deed b. Reconveyance deed c. Bargain and sale contract d. Special warranty deed Reference: Ch. 12, Mortgage Theories, and Documents Related to Loans, Title Theory of Mortgages

b. Reconveyance deed

603. A real estate broker asks his sales associate to commit an illegal act. What should the sales associate do? a. Comply, as the sales associate may lose their job b. Refuse to comply and withdraw from the relationship c. Notify the Florida real estate commission d. Comply, but inform the employer that they are complying under duress Reference: Ch. 5, Broker's Liability for Fraudulent Activity

b. Refuse to comply and withdraw from the relationship

771. If a REALTOR has a sign in the office window indicating that the broker is a member of a particular organization, but in fact, the broker was dropped from the organization for failure to pay dues, what should the broker do? a. Pay the dues b. Remove the sign c. Have never had the sign in the window to begin with d. Keep the sign up, since he is a former member Reference: Ch. 1, Professional Organizations

b. Remove the sign

979. What do the Greenbelt Laws do? a. Encourage people to leave farming to move to the city b. Require agricultural land to be assessed at its current use rather than its highest and best use c. Increase the taxes farmers must pay on their land d. Result in appreciably higher tax revenues for cities adjacent to farmland Reference: Ch. 18, Real Estate Tax Exemptions and Limitations, Greenbelt Laws

b. Require agricultural land to be assessed at its current use rather than its highest and best use

959. A seller listed their home with a broker and obtained a signed contract with a buyer, contingent on financing. The buyer made an earnest money deposit of $10,000, which the broker immediately deposited in an escrow account. The buyer is unable to obtain financing during the contingency period and cannot close on the transaction. What should the broker do? a. Hold the deposit until the bookkeeper returns b. Return the deposit immediately, provided the seller does not object c. Ask the FREC for an escrow disbursement order (EDO) d. Return the deposit only after receiving a court judgment Reference: Ch. 5, Escrow Funds, Escrow Disbursement Exemptions

b. Return the deposit immediately, provided the seller does not object

102. What term refers to the right of a mortgagor to stop a foreclosure process by paying the entire balance, interest and so on? a. Equity of estoppel b. Right of redemption c. Right of defeasance d. Equity of disposition Reference: Ch. 12, Default

b. Right of redemption

572. What is the name for the legal rights of property owners whose land borders a river? a. Civil rights b. Riparian rights c. Littoral rights d. Air rights Reference: Ch. 8, Real Property

b. Riparian rights

611. What is opposite of N20°W? a. N20°E b. S20°E c. S20°W d. E20°N Reference: Ch. 10, Surveyor's Method

b. S20°E

831. Sales associate Betty, who works for broker Sam, went on vacation to Key West for two weeks. While there, she ran into three couples from New Jersey, who were interested in buying waterfront condos. Betty sold condos to all three couples. Being that she was from out of town, she approached broker Tony, who ran the deals through his office. In appreciation for Betty's efforts, broker Tony paid Betty $15,000. Which statement applies? a. Sales associate Betty should have received more than $15,000. b. Sales associate Betty and broker Tony have both violated F.S. 475. c. Sales associate Betty and broker Sam have both violated F.S. 475. d. There was no violation of F.S. 475. Reference: Ch. 5, Sales Associate's Duties, Compensation

b. Sales associate Betty and broker Tony have both violated F.S. 475.

480. A broker has been found guilty by the Florida Real Estate Commission of advertising in a fraudulent, false, deceptive, or misleading way. In addition to administrative penalties, what criminal violation has occurred? a. First-degree misdemeanor b. Second-degree misdemeanor c. Second-degree felony d. Third-degree felony Reference: Ch. 6, Criminal Penalties

b. Second-degree misdemeanor

816. Printing false information is considered which criminal offense? a. Second-degree felony b. Second-degree misdemeanor c. First-degree felony d. First-degree misdemeanor Reference: Ch. 6, Criminal Penalties

b. Second-degree misdemeanor

196. Before the rules and regulations enacted by the FREC become effective, with which entity must they be filed? a. Attorney general b. Secretary of state c. Secretary of the senate d. Governor's office Reference: Ch. 3, Powers of the Commission

b. Secretary of state

403. What section is immediately due west of Section 18? a. Section 17 b. Section 13 c. Section 19 d. Section 20 Reference: Ch. 10, Government Survey Method - Township

b. Section 13

529. What is the FREC authorized to do? a. Issue a writ of mandamus b. Seek an injunction c. Revoke a license automatically d. Issue a summary suspension Reference: Ch. 6, The Disciplinary Process

b. Seek an injunction

914. Which item would you expect to see on the broker's closing statement? a. Broker's fee shown as a receipt b. Seller's expenses shown as a disbursement c. Buyer's expenses shown as a receipt d. Amount due the seller at closing shown as a receipt Reference: Ch. 14, Section 5 - Broker's Statement

b. Seller's expenses shown as a disbursement

986. What is the real estate market experiencing when the demand for available housing exceeds current supply? a. Buyers' market b. Sellers' market c. Recessionary cycle d. Hypothecation Reference: Ch. 15, Competition in the Marketplace

b. Sellers' market

364. All of the following are tools used by the Federal Reserve to control the money supply, EXCEPT: a. Changing the discount rate b. Setting fiscal policy c. Opening market operations d. Changing the reserve requirement Reference: Ch. 13, Federal Reserve System

b. Setting fiscal policy

267. Mrs. Murphy is a struggling small investor who owns a boarding house and rents rooms to tenants. Which statement is correct? a. She may advertise to attract tenants of a particular race or religion. b. She may refuse to rent to any tenant that she feels would be incompatible with existing boarders. c. She cannot refuse to rent to a boarder that she feels may be incompatible. d. Private owners are exempt from the Fair Housing Act. Reference: Ch. 7, Federal Fair Housing Laws

b. She may refuse to rent to any tenant that she feels would be incompatible with existing boarders.

237. Buyer Smith gave a postdated check to sales associate Brown that the seller accepted. Smith told Brown to hold the check for two weeks until he (the buyer) could fly to New York and transfer the funds from a savings account to a checking account. On the date Brown received the postdated check, the broker was out of town, but returned the following business day. Following the buyer's instructions, Brown deposited the postdated check into the broker's escrow account two weeks later. Sales associate Brown: a. Acted properly as the seller had accepted the postdated check b. Should have turned over the postdated check to the broker the next business day c. Acted improperly since a post-dated check may never be accepted as a deposit d. Acted properly by following the principal's instructions Reference: Ch. 5, Depositing Escrow Funds

b. Should have turned over the postdated check to the broker the next business day

338. All of the following are required for a valid mortgage, EXCEPT: a. The legal description of the property b. Signature of the mortgagee c. Signature of the mortgagor d. It be in writing Reference: Ch. 12, Mortgage Requirements

b. Signature of the mortgagee

276. Mr. Reynolds inspects a piece of property. He notes a pile of fencing that the seller tells him he had purchased with the intent of fencing in the yard but has not gotten around to doing it yet. When Mr. Reynolds buys the house and takes occupancy, he finds that the fencing has not been installed and has been removed. Mr. Reynolds consults his lawyer who advises him that: a. Since he saw the fencing at the time of inspection, it is part of the sale and should have remained. b. Since it was not yet installed, it is personal property and the seller had the right to remove it. c. He ought to try to negotiate with the seller for its return prior to taking legal action. d. According to real estate license law, this is a fixture of the property and the seller's right to the fencing would probably be upheld in a court of law. Reference: Ch. 8, Fixtures

b. Since it was not yet installed, it is personal property and the seller had the right to remove it.

926. The local planning agency, or planning commission, normally has the authority to approve which of the following? a. Comprehensive plans b. Site plans c. Developments of regional impact (DRIs) d. Variances Reference: Ch. 19, Florida's Comprehensive Plan, Authority of the Local Planning Agency

b. Site plans

410. Where is section 33 located within a township? a. North b. South c. East d. West Reference: Ch. 10, Government Survey Method - Township

b. South

555. What type of advertising would a broker most likely use to sell a duplex? a. National b. Specific c. Institutional d. General Reference: Ch. 5, Advertising

b. Specific

703. Which of the following is the best source of protection for consumers who are using the services of a real estate licensee? a. Complaint hotlines set up by the state government b. State licensing laws c. Severe punishment of offenders d. Citation authority given to state investigators Reference: Ch. 2, Purpose of the Law

b. State licensing laws

618. The Florida Real Estate Commission oversees and enforces which of the following? a. The REALTORS code of ethics b. State-licensing laws (F.S. 475) c. State condominium laws (F.S. 718) d. State mortgage banking laws (F.S. 494) Reference: Ch. 3, The Florida Real Estate Commission

b. State-licensing laws (F.S. 475)

972. The period of time in which a contract may be legally enforced is governed by which of the following? a. Statute of frauds b. Statute of limitations c. Florida real estate law d. Statute of reliction Reference: Ch. 11, Statute of Limitations

b. Statute of limitations

331. What does the term "follow-up" refer to in the real estate industry? a. A broker following up on his sales associates b. Staying in touch with a customer after the sale c. FREC following up on legally sufficient complaints d. Sales associates keeping up with "for sale by owners" Reference: Ch. 1, Introduction to the Real Estate Business

b. Staying in touch with a customer after the sale

620. A sales associate finds a buyer ready, willing, and able to purchase a home. The seller refuses to sell and will not pay the broker a commission. The broker does not pay the sales associate a commission. What may the sales associate do? a. Sue the seller b. Sue the broker c. Nothing, the sales associate has no remedy d. Sue the buyer and seller Reference: Ch. 5, Sales Associate's Duties, Compensation

b. Sue the broker

879. A sales associate procures a sale. The sales associate's broker dies before receiving the commission for the sale. What may the sales associate do? a. Sue the property owner b. Sue the broker's estate c. Place a lien on the seller's property d. Sue the buyer Reference: Ch. 5, Sales Associate's Duties, Compensation

b. Sue the broker's estate

231. Six brokers wish to become partners in a real estate agency and each be active in real estate sales. What is required? a. That they register with the DBPR as inactive brokers b. That they all be licensed as active brokers c. That they have at least one active broker d. That they register the partnership with the Department of State Reference: Ch. 5, Types of Business Formations, Real Estate Brokerage Partnership

b. That they all be licensed as active brokers

954. A broker's responsibilities to the principal include securing which of the following? a. The highest price b. The best price c. The lowest price d. Any price Reference: Ch. 4, Authorized Real Estate Brokerage Relationships, Single Agent

b. The best price

208. A broker lists a property for $30,000. The broker learns of a new development that will be built beside the listed property. The broker purchases the property from the seller for the full listed price and discloses the fact that he is a licensed broker. The broker then sells the property to the developer for $50,000. Which statement is correct? a. The broker acted ethically. b. The broker is guilty of concealment. c. The broker is guilty of failure to account. d. The broker is guilty of culpable negligence. Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

b. The broker is guilty of concealment.

481. An investigator for the Department has audited a broker's escrow account and found a balance of $12,000. The trust liability totaled $30,000. If the broker's commissions on the pending transactions total $18,000, which statement is correct? a. The investigator will approve the audit. b. The broker may be disciplined by the Florida Real Estate Commission. c. No violation of the law is evident based on this audit. d. The broker will be required to deposit $18,000 into the escrow account within three working days of the audit. Reference: Ch. 5, Escrow Funds, Monthly Reconciliation

b. The broker may be disciplined by the Florida Real Estate Commission.

580. How does the Sherman Antitrust Act relate to real estate brokerage? a. Equal opportunity brokerage b. The fixing of commission rates c. The fixing of interest rates d. Disclosure of the true annual percentage rate Reference: Ch. 4, Broker's Right to Compensation, Uniform Commission Rates

b. The fixing of commission rates

203. Homeowner Owen signed an exclusive right of sale listing with Bob, a registered broker. The listing states that Bob is employed to find a purchaser and that Owen agrees to pay a 10% commission to Bob or any person, partnership, corporation, or firm that sells the property. The remainder of the listing deals with the terms and conditions of the sale and duration of the listing. While Owen was away on vacation, Percy made a written offer to purchase the property at the listed price, terms, and conditions. Bob, on behalf of owner Owen, accepted Percy's offer and signed it for Owen. Which statement is correct? a. The listing authorized Bob to accept the best offer obtained for Owen. b. The listing did not give Bob the right to obligate Owen to Percy's offer. c. The listing gave Bob the equivalent authority of power of attorney. d. Bob can accept Percy's offer for Owen. Reference: Ch. 11, Listing Contracts

b. The listing did not give Bob the right to obligate Owen to Percy's offer.

485. A broker lists an owner's property for six months on an exclusive listing agreement for $80,000 at a commission of 7%. Three months later the owner sells the property to a nephew for $74,400. Which statement is correct? a. The owner owes the broker a commission based on the listed price of $80,000. b. The owner does not owe the broker a commission. c. The owner is liable to the broker for damages. d. The owner owes a commission based on the sale price of $74,400. Reference: Ch. 11, Listing Contracts, Types of Listing Contracts

b. The owner does not owe the broker a commission.

190. A resident of Canada that has been denied a license in the Province of Ontario subsequently moves to Florida and applies for a real estate sales associate's license. Which would most likely apply? a. The applicant will automatically be denied a license in Florida. b. The person will be granted a hearing, and the application will be pending based on the result of the hearing. c. The Canadian denial will have no bearing in Florida. d. The previous problem does not need to be noted on the application as it took place outside the country. Reference: Ch. 2, Application Approval or Denial

b. The person will be granted a hearing, and the application will be pending based on the result of the hearing.

726. A sales associate lists a seller's house and sells it in two days. The seller is very appreciative and wishes to give the sales associate a bonus. Which statement is correct? a. The sales associate can receive the bonus if the broker does not object. b. The sales associate cannot receive the bonus from the seller. c. If the seller places the bonus in escrow, the sales associate can receive it. d. The sales associate can receive the deposit only if it is paid in cash. Reference: Ch. 5, Sales Associate's Duties, Compensation

b. The sales associate cannot receive the bonus from the seller.

570. The buyer and seller agree in a contract to postdate the deposit check. Which statement is correct? a. The sales associate should hold it until it clears. b. The sales associate should immediately give the check to their broker. c. The sales associate should refuse the check. d. The deposit check should be put in escrow immediately. Reference: Ch. 5, Escrow Funds

b. The sales associate should immediately give the check to their broker.

360. What happens when the Federal Reserve orders financial institutions to increase their reserves? a. The supply of loans increases. b. The supply of loanable funds is reduced. c. Interest rates go down. d. The money supply increases. Reference: Ch. 13, Federal Reserve System

b. The supply of loanable funds is reduced.

413. What is the term used for the amount of money that a homeowner pays in property taxes? a. The tax base b. The tax levy c. Exempt property d. Taxable property Reference: Ch. 18, Property Tax Assessments

b. The tax levy

860. What happens in title-theory states that use deeds of trust? a. The mortgagor gives a deed of trust to the beneficiary. b. The trustor gives a promissory note to the beneficiary. c. The trustee gives a loan to the borrower. d. The beneficiary gives a mortgage to the trustor. Reference: Ch. 12, Title Theory of Mortgages

b. The trustor gives a promissory note to the beneficiary.

945. A broker is confined to a hospital for a temporary mental incapacity. Which is correct? a. Their license must be revoked. b. Their license may be suspended for the period of incapacity. c. Nothing will be done or needs to be done with their license status. d. When the broker is discharged from the hospital, they will have to take the FREC I course over again. Reference: Ch. 6, Exhibit 6.3 Violations Requiring a Full Disciplinary Hearing

b. Their license may be suspended for the period of incapacity.

883. Broker Bennett is trying to decide whether to operate as a sole proprietorship or charter as a corporation. Which of the following is an advantage of sole proprietorship? a. The broker would have limited liability for the debts of the firm. b. There would be less effort to legally create and maintain the ownership form. c. The potential exists to easily sell a part of the entity ownership in the business to raise additional capital for the firm. d. The ownership is easily transferable. Reference: Ch. 5, Types of Business Formations, Sole Proprietorship

b. There would be less effort to legally create and maintain the ownership form.

727. When an unlicensed person practices real estate, what criminal penalty can be imposed? a. First-degree felony b. Third-degree felony c. First-degree misdemeanor d. Second-degree misdemeanor Reference: Ch. 6, Criminal Penalties

b. Third-degree felony

674. Farmer Jones meets broker Brown at a cocktail party. Jones and Brown agree that if Brown sells Jones's farm for $650,000 within 30 days, Jones will pay Brown a 6% commission. Which applies? a. A fiduciary relationship has been established. b. This is a contract, and Brown is entitled to a commission if the broker performs. c. Under the statute of frauds, this listing is not enforceable. d. This is an exclusive right of sale listing. Reference: Ch. 11, Contracts

b. This is a contract, and Brown is entitled to a commission if the broker performs.

774. Complete the sentence. All listings should be in writing: a. To be enforceable b. To avoid any misunderstanding c. Because F.S. 475, requires it d. Because the statute of frauds requires it Reference: Ch. 11, Contracts

b. To avoid any misunderstanding

264. What is the purpose of the Real Estate Settlement Procedures Act (RESPA)? a. To ensure that land developers do not misrepresent the sale of subdivided lands b. To ensure that buyers are informed about the amount and type of charges they will expect to pay at closing c. To ensure that lenders disclose the annual percentage of interest charged to borrowers d. To ensure that lenders do not charge a usurious interest rate on mortgages Reference: Ch. 13, RESPA

b. To ensure that buyers are informed about the amount and type of charges they will expect to pay at closing

738. Shelving and racks used in business and installed by the tenant are generally considered to be which of the following? a. Real property b. Trade fixtures c. Ostensible property d. Property of the landlord Reference: Ch. 8, Real Property

b. Trade fixtures

737. How many years must a tax certificate holder wait before applying for a tax deed? a. One b. Two c. Seven d. Any number of years Reference: Ch. 18, Paying the Tax Levy, Delinquent Property Taxes

b. Two

142. What is the membership composition of the value adjustment board? a. Three school board members and two county commissioners b. Two county commissioners, one school board member and two private citizens c. Three county commissioners and the tax assessor d. Four county commissioners and three school board members Reference: Ch. 18, Protesting the Tax Assessment, Step 2

b. Two county commissioners, one school board member and two private citizens

313. Which of the following is a unique characteristic of an option contract? a. Executed b. Unilateral c. Bilateral d. Parol Reference: Ch. 11, Option Contracts

b. Unilateral

189. Which is the best license status for practicing real estate? a. Valid b. Valid and current c. Current d. Valid and not current Reference: Ch. 3, Active and Inactive License Status, Summary of License Status Terminology

b. Valid and current

492. A sales associate's license expires. If the associate immediately applies for a renewal, when will the renewal become effective? a. The day following expiration of the current license b. When the department receives the renewal application and fee payment c. The date the application is postmarked d. When the renewal license is received by the sales associate Reference: Ch. 3, Licensing Periods, Renewal

b. When the department receives the renewal application and fee payment

75. Complete the sentence. A deed must be: a. Notarized b. Witnessed c. Recorded d. Signed by the grantee Reference: Ch. 9, Deeds, Transferring Title

b. Witnessed

218. Can a broker be entitled to two commissions when consummating an exchange? a. No, as this would be a conflict of interest b. Yes, providing both parties are advised and approve c. Yes, but only if both brokers agree d. No, since a broker can only have one principal Reference: Ch. 4, Broker's Right to Compensation, Payment of Commission

b. Yes, providing both parties are advised and approve

835. What should a valid mortgage contain? a. Granting clause b. Reddendum clause c. Promissory note d. Legal description Reference: Ch. 12, Essential Elements of a Mortgage

d. Legal description

691. Three houses recently sold with the following amenities: (1) $84,500, three bedrooms, two baths, good location, family room, garage (2) $76,500, three bedrooms, two baths, fair location, family room, carport (3) $80,000, three bedrooms, two baths, good location, carport If a good location adds $5,000 and a garage adds $3,000, what would be the value of a family room? a. $1,000 b. $1,200 c. $1,500 d. $2,000 Reference: Ch. 16, Comparable Sales Approach

c. $1,500 (1) and (3) differ by the family room and garage only, so compare them. $84,500 (1) - $3,000 (Garage) = $81,500; $81,500 - $80,000 (3) = $1,500 (Family room)

440. A buyer is purchasing a home for $48,000 with an FHA loan. He borrows the maximum loan amount with the minimum down payment. How much of a down payment will the buyer need? a. $0 b. $800 c. $1,700 d. $4,632 Reference: Ch. 13, FHA Insured Mortgage Loan Programs

c. $1,700 $48,000 (Purchase Price) x .965 (Maximum LTV Ratio) = $46,320 Round down to $46,300 (Next lowest $50 increment); $48,000 (Purchase Price) - $46,300 (Maximum Loan Amount) = $1,700 (Down Payment Required)

794. An appraiser appraised three lots for a total of $45,000. Lot B was appraised for $4,000 more than lot A. Lot C was appraised at $7,000 more than lot B. For how much was lot A appraised? a. $5,000 b. $7,000 c. $10,000 d. $20,000 Math Concept: Write the known information as math equations and use substitution to find the value of A.

c. $10,000 B = A + $4,000; C = B + $7,000; Substitute for B to get C = (A + $4,000) + $7,000; A + B + C = $45,000; Substitute to get A + (A + $4,000) + ((A + $4,000) + $7,000) = $45,000; So (3 x A) + $15,000 = $45,000; 3 x A = $45,000 - $15,000 = $30,000; A = $30,000 ÷ 3 = $10,000

433. A sales associate collected a $4,800 commission on the sale of the NE 1/4 of the NW 1/4 of the SW 1/4 of a section. The broker's share of the 10% commission was 60%. How much did the property sell for per acre? a. $8,000 b. $10,000 c. $12,000 d. $120,000 Reference: Ch. 10, Calculating Acreage in a Parcel from a Legal Description;

c. $12,000 Sales associate share is 40%. $4,800 = Total commission x 40%, so the Total commission = $4,800 ÷ 0.40 = $12,000, which is 10% of the Sales price. $12,000 Commission = Sales price x 0.10; Sales price = $12,000 ÷ 0.10 = $120,000; Acreage = 640 ÷ 4 ÷ 4 ÷ 4 = 10 acres; Cost per acre = $120,000 ÷ 10 acres = $12,000.

997. A tenant pays $1,400 a month for a 1,400-square-foot office. How much a square foot does the tenant pay annually? a. $10.00 b. $11.00 c. $12.00 d. $14.00 Math Concept: Monthly payment ÷ Square feet x 12 months = annual amount paid

c. $12.00 Annual rent = $1,400 per month x 12 months = $16,800; Price per sq. ft. = $16,800 ÷ 1,400 sq. ft. = $12 per sq. ft

791. You have a $19,500 mortgage at $8.50 per thousand principal and interest (P&I). Which of the following would be the monthly payment? a. $140.40 b. $150.60 c. $165.75 d. $180.10 Reference: Ch. 13, Amortizing Loan Payments

c. $165.75 Payment = ($19,500 ÷ 1,000) x $8.50 = $165.75

596. A building that cost $662,000 ten years ago would cost $770,000 to build today. The building is in excellent condition and looks only about five years old. The carpeting needs to be replaced for $20,000. What is the total accrued depreciation based on a 25-year useful life? a. $150,000 b. $154,000 c. $170,000 d. $174,000 Reference: Ch. 16, Cost-Depreciation Approach

c. $170,000 Depreciation rate = 5 (effective age) ÷ 25 (total economic life) = 0.2 or 2%; Reproduction cost = $770,000 - $20,000 = $750,000; Depreciation = Reproduction cost x Depreciation rate, so Total accrued depreciation = ($750,000 x 0.2) + $20,000 carpet = $170,000;

246. An investor lost $30,000.00 due to his broker's negligence. The investor sued the broker and awarded a judgment totaling $30,000.00. The broker went bankrupt, and the bankruptcy court forced the broker to pay the investor $8,000.00. What amount from the recovery fund may the investor obtain? a. $3,000 b. $10,000 c. $22,000 d. $25,000 Reference: Ch. 6, The Real Estate Recovery Fund

c. $22,000

436. A licensee receives a monthly salary of $500, a 2% commission on all listings that sell, and 3% on all sales. Last month, none of her listings sold, but she did receive a total of $7,400 in salary and commissions. What is the value of the properties that she sold? a. $250,000 b. $246,667 c. $230,000 d. $148,000 Math Concept: Value x % Sold = Total $ received - Salary received

c. $230,000 Value x 3% = $7,400 (Total received) - $500 (Salary), so Value = $6,900 (Received for properties sold) ÷ .03 = $230,000;

698. Broker Brown and broker Smith split a commission on a 50/50 basis on the sale of the S 1/2 of the NW 1/4 of Section 36, Township 3 North, Range 4 E, with a selling price of $ 170.45 per acre. The commission is to be calculated as follows: 5% of the first $10,000, 3% of the next $2,500 and 1 1/2% of the balance. If broker Brown must pay his sales associate James 12 1/2% of the commission for listing the property, how much net commission will Brown receive? a. $37.00 b. $129.51 c. $259.02 d. $296.02 Reference: Ch. 10, Calculating Acreage in a Parcel from a Legal Description; Ch. 11, Listing Contracts, Calculating a Brokerage Commission

c. $259.02 640 ÷ 4 ÷ 2 = 80 acres; Sales price = 80 acres x $170.45 per acre = $13,636; 5% x $10,000 = $500; 3% x $2,500 = $75; 1.5% x $1,136 ($13,636 - $12,500) = $17.04; $500 + $75 + $17.04 = $592.04 total commission. 50% (50/50 split) x $592.04 = $296.02 to each broker. 100% -12.5% (sales associate share) = 87.5% broker share x $296.02 broker commission = $259.02.

172. An eight-year-old building looks only three years old because it has been well maintained. The reproduction cost the building is $400,500, and the economic life is 45 years. The land is valued at $80,000. What is building's approximate depreciation? a. $2,700 b. $7,200 c. $26,700 d. $71,200 Reference: Ch. 16, Cost-Depreciation Approach, Step 3

c. $26,700 Depreciation rate = $400,500 (Reproduction cost) x 3 (Effective age) ÷ 45 (Total economic life) = $26,700;

159. Sarah made an escrow deposit of $8,500 on her sales contract. The sale price is $200,000, and she has arranged for an 85% loan. If her closing costs are $6,000, how much additional cash must she bring to the closing? a. $21,500 b. $24,200 c. $27,500 d. $36,000 Math Concept: Additional Cash = (Down payment - Escrow deposit) + Closing costs

c. $27,500 Down payment = $200,000 x .15 = $30,000; Additional cash = ($30,000 - $8,500) + $6,000 = $27,500

600. A property measures 660 feet by 990 feet and sold for $12,000 per acre. The buyer can obtain 80% financing. How much is the intangible tax? a. $460.80 b. $360.00 c. $288.00 d. $270.00 Reference: Ch. 14, Section 3 - Expenses, State Intangible Tax on Mortgages

c. $288.00 Lot size (in acres) = (660 ft. x 990 ft.) ÷ 43,560 = 15 acres; Selling price = $12,000 per acre x 15 acres = $180,000; Loan amount = $180,000 x 0.80 = $144,000; Intangible tax = $144,000 x .002 = $288

591. A bank gives a mortgage loan for 80% of the sales price at an interest rate of 8%. The interest portion of the first month's payment is $192. What is the selling price? a. $28,800 b. $32,000 c. $36,000 d. $72,000 Reference: Ch. 13, Loan Repayment Methods, Amortizing Loan Payments

c. $36,000 I = P x R x T, so $192 = Principal x .08 ÷ 12; Principal = $192 ÷ .08 x 12 = $28,800; Loan amount = Selling price x 80%, so $28,800 = Selling price x .80; Selling price = $28,800 ÷ .8 = $36,000

800. A broker sold an $85,000 house, charging the seller a 6% commission. Due to extenuating circumstances, the buyer defaulted on the contract and forfeited his 10% deposit. Based on custom, how much commission should the broker receive? a. $2,550 b. $3,400 c. $4,250 d. $5,100 Reference: Ch. 4, Broker's Right to Compensation

c. $4,250 Full commission = $85,000 x 0.10 = $8,500; Customary commission (50/50 split) = $8,500 ÷ 2 = $4,250

171. If a lot measures 125 feet by 225 feet, and the street in front is scheduled to be paved at a cost of $100 per front foot, how much would one homeowner's special assessment be if the county is paying 30%? a. $1,875 b. $2,187 c. $4,375 d. $7,875 Reference: Ch. 18, Special Assessments

c. $4,375 First number in lot dimensions is always the length along the street (125 ft.). Assessment = 125 (Front feet) x $100 (Cost) x .70 (Owner's share) ÷ 2 (Owners on each side of the street) = $4,375

174. A comparable property recently sold for $429,000. The comparable property is built of superior materials valued at $25,000 but has less square footage than the subject property, valued at $35,000. What is the adjusted sale price of the comparable property? a. $369,000 b. $419,000 c. $439,000 d. $489,000 Reference: Ch. 16, Comparable Sales Approach

c. $439,000 Adjust the comparable property by subtracting its superior features and adding its inferior features. Adjusted price = ($429,000 - $25,000) + $35,000 = $439,000

160. A property that listed for $400,000 sold for 93% of the listing price with a 5% commission. It was sold by another office. The commission is to be split 50% to the listing office and 50% to the selling office. If the sales associate is to receive 40% of the listing office share, how much will the listing broker receive? a. $4,000 b. $4,650 c. $5,580 d. $6,000 Reference: Ch. 11, Listing Contracts, Calculating a Brokerage Commission

c. $5,580 Selling price = $400,000 x .93 = $372,000; Total commission = $372,000 x .05 = $18,600; Listing office share = $18,600 x .50 (50/50 split) = $9,300; Listing broker share = $9,300 x .60 = $5,580

243. What is the maximum allowable payment from the recovery fund for any financial losses suffered due to a licensee's acts? a. $25,000 b. $75,000 for multiple transactions c. $50,000 per transaction, with a maximum of $150,000 for multiple transactions d. Any amount equal to the losses Reference: Ch. 6, The Real Estate Recovery Fund

c. $50,000 per transaction, with a maximum of $150,000 for multiple transactions

167. Mr. Johnson owns an apartment building that produces an effective gross income of $85,000 per year. What would be the value, given operating expenses of $30,000, and an overall capitalization rate of 11%? a. $272,727 b. $300,000 c. $500,000 d. $772,727 Reference: Ch. 16, Income Approach - Using the IRV Formula to Derive Capitalization Rates

c. $500,000 Value = Income/Rate, where Income is the NOI. NOI = $85,000 (EGI) - $30,000 (OE) = $55,000; Rate is the cap rate of 11%. Value = $55,000 (NOI) ÷ .11 (Rate) = $500,000

448. An investor buys an income property for $300,000 that shows a $30,000 income. If the investor could increase the yield to 12%, how much additional money could the investor earn per year? a. $2,500 b. $3,600 c. $6,000 d. $9,000 Reference: Ch. 16, Using the IRV Formula to Derive Capitalization Rates

c. $6,000 I = R x V; Income = 12% x $300,000 = $36,000; Additional earnings = $36,000 - $30,000 = $6,000

693. A widow's property has an assessed value of $60,000 and she qualifies for a homestead exemption. The millage rates are eight mills for the city, six mills for the county, and nine mills for the school board. What is her tax levy? a. $1,380 b. $443.50 c. $653.50 d. $665 Reference: Ch. 18, Calculating a Real Estate Tax Levy

c. $653.50 Total tax liability (before exemptions) = $60,000 x .023 = $1,380; Basic exemption = ($25,000 + $500 widow) x .023 = $586.50; 2nd exemption = ($60,000 - $50,000) x .014 = $140; Tax levy = ($1,380 - $586.50) - $140 = $653.50

458. If the documentary stamp tax on the deed was $520.10, and the note tax on the purchase money mortgage was $227.50, how much was the sales price and the purchase money mortgage? a. $150,000 and $55,000 b. $148,600 and $32,500 c. $74,300 and $65,000 d. $32,500 and $15,000 Reference: Ch. 13, Purchase Money Mortgage; Ch. 14, State Documentary Stamp Tax on the Deed, State Documentary Stamp Tax on a Promissory Note

c. $74,300 and $65,000 Work backwards. (Sales price ÷ 100) x $0.70 = $520.10, so Sales price = $520.10 ÷ $0.70 x 100 = $74,300; Note amount: (PMM ÷ 100) x $0.35 = $227.50, so PMM = ($227.50 ÷ $0.35 x 100) = $65,000;

457. 12,000 square feet of warehouse space is leased at $.075 per square foot per month. The gross income multiplier is 7.5. What is the market value of the property? a. $6,750 b. $10,800 c. $81,000 d. $108,000 Reference: Ch. 16, Income Approach - Gross Multiplier Technique - GIM

c. $81,000 Market value = GIM x Annual gross rent; Annual gross rent = 12,000 x $.075 x 12 = $10,800; Value = 7.5 x $10,800 = $81,000

444. A broker was asked by a seller to appraise the seller's home in a residential neighborhood. The seller's home was a three-bedroom, two-bath house. Homes have been appreciating in this area at 10% per year. The broker estimates bedrooms in this area to be worth $12,000, and bathrooms are worth $5,000. Using the following three comparables, estimate the approximate market value of the subject home assuming that the comparables are weighted equally. - No. 1: 3/3 sold one year ago for $81,000 - No. 2: 4/2 sold six months ago for $91,000 - No. 3: 2/2 sold recently for $72,500 a. $82,000 b. $83,000 c. $84,000 d. $85,000 Reference: Ch. 16, Comparable Sales Approach

c. $84,000 Adjust the comparable properties for appreciation and differences in amenities. No. 1: ($81,000 - $5,000) + ($81,000 x 10%) = $84,100; No. 2: ($91,000 - $12,000) + ($91,000 x 5%) = $83,550; No. 3: $72,500 + $12,000 = $84,500; Take the average: ($84,100 + $83,550 + $84,500) ÷ 3 = $84,050, which is closest to $84,000

455. A house is valued at $65,000.00. The monthly rent is $500.00, monthly debt service is $375.00, and annual taxes are $840.00. If there are no other expenses, what is the GRM? a. 75 b. 80 c. 130 d. 108.3 Reference: Ch. 16, Income Approach - Gross Multiplier Technique

c. 130 GRM = Price ÷ Gross monthly rent = $65,000 ÷ $500 = 130

653. If both the buyer and the seller make claims on the escrow money held by the broker, within how many business days is the broker required to notify the FREC if the dispute remains unresolved? a. 5 b. 10 c. 15 d. 20 Reference: Ch. 5, Escrow Funds, Escrow Disputes

c. 15

896. An investor put $50,000 down on a $200,000 property. The NOI is $30,000 and the mortgage payments are $22,000 per year. What is the capitalization rate? a. 26% b. 16% c. 15% d. 11% Reference: Ch. 16, Income Approach, Direct Capitalization Technique

c. 15% Cap rate = $30,000 (NOI) ÷ $200,000 (Value) = 0.15 or 15%

864. Fannie Mae is selling an FHA mortgage with an interest rate of 14% at 92% (8 points). What is the approximate yield for the new lender? a. 13% b. 14% c. 15% d. 16% Reference: Ch. 12, Common Mortgage Features, Mortgage Loan Fees - Effective Yield

c. 15% Loan fee = 8 points x 1/8% per point = 8/8 or 1%; 14% +1% Fee = 15% approximate yield

408. How many townships are in a check? a. 36 b. 24 c. 16 d. 4 Reference: Ch. 10, Government Survey Method - Township

c. 16

404. The southwest corner of Section 31, T1N, R4E is how many miles from Tallahassee? a. 6 b. 12 c. 18 d. 24 Reference: Ch. 10, Government Survey Method

c. 18

963. When the city or county sells a tax certificate, a sale of the property may take place only after the certificate has been outstanding for how many years? a. 20 b. 3 c. 2 d. 1 Reference: Ch. 18, Paying the Tax Levy, Delinquent Property Taxes

c. 2

161. A developer purchased two adjacent lots of 200 front feet each for $35,000 each. He then divided them into three lots and sold them for $225 per front foot. What was the percentage of profit? a. 14.5% b. 22.0% c. 29.0% d. 57.0% Reference: Ch. 17, Calculating Profit on Investment

c. 29.0% Profit% = Made ÷ Paid; Paid = $35,000 x 2 lots = $70,000; Made = ($225 x 400 front feet) - (Paid) = $90,000 - $70,000 = $20,000; Profit % = $20,000 (Made) ÷ $70,000 (Paid) = 0.2857 or 29%

155. Carol is borrowing money to purchase her first home. The lender has agreed to a 5% loan with 2 discount points. What is the approximate yield on the loan? a. 3.00% b. 4.75% c. 5.25% d. 7.00% Reference: Ch. 12, Mortgage Loan Fees - Effective Yield

c. 5.25% Rule of thumb Æ 2 points adds 2 x 1/8%, or 2/8%, which is the same as ¼% or an additional .25%. 5% + .25% = 5.25%

170. What is the gross income multiplier for an investment property that has a gross income of $550,000 and a net income of $330,000 if the value is $4,125,000? a. 3.4 b. 4.7 c. 7.5 d. 12.5 Reference: Ch. 16, Gross Multiplier Technique, GIM

c. 7.5 GIM = $4,125,000 (Price) ÷ $550,000 (Gross annual income) = 7.5 GIM

882. Broker Sam sells a list of rental properties to a prospective tenant, Michelle, on March 1. Michelle looks at several properties on the list and then changes her mind about living in that city and decides to move back up north. On March 31, Michelle requests a refund. How much of a refund will Sam have to give back to Michelle? a. 0% b. 25% c. 75% d. 100% Reference: Ch. 5, Rental Information

c. 75%

112. If a lender charges 8% interest plus 2 points, what is the approximate yield on the loan? a. 9.00% b. 8.50% c. 8.25% d. 8.13% Reference: Ch. 12, Mortgage Loan Fees, Effective Yield

c. 8.25%

449. A property sells for $200,000 with a $30,000 down payment and debt service of $1,500 per month. What is the loan to value ratio? a. 9% b. 15% c. 85% d. 91% Reference: Ch. 12, Lender Risk, Loan-to-Value Ratio

c. 85% Loan amount = $200,000 (Sales price) - $30,000 (Down payment) = $170,000; LTV = $170,000 (Loan amount) ÷ $200,000 (Sales price) = 0.85 or 85%

416. Which circumstance would qualify for the $500,000 exclusion of capital gains tax on the sale of a principal residence? a. The seller had occupied it for one of the last five years with a gain up to $500,000. b. The accumulated capital gain is under $750,000. c. A couple has occupied it for two of the last five years with a gain up to $500,000. d. A couple has never taken the exemption before, and gain is up to $750,000. Reference: Ch. 18, The Effect of Federal Income Taxes on Homeownership

c. A couple has occupied it for two of the last five years with a gain up to $500,000.

714. The Florida legislature requires certain disclosures prior to the signing of a real estate sales contract or rental agreement. Which is correct? a. Property must be tested to be able to disclose radon gas levels prior to the closing of a sale. b. It must be disclosed if any member in the seller's household has been infected by the human immunodeficiency virus (HIV) or the acquired immune deficiency syndrome (AIDS). c. A definition of radon gas must be disclosed. d. The ethnic composition of the neighborhood must be disclosed. Reference: Ch. 7, Florida Fair housing Act, Discrimination Based on AIDS or HIV; Ch. 11, Disclosures Required in Sales Contracts

c. A definition of radon gas must be disclosed.

930. How is an appraiser compensated? a. A fee based upon the value of the property b. A commission based upon the value of the property c. A fee based on the time and difficulty involved d. A fee based on the seniority of the appraiser Reference: Ch. 1, Real Estate Related Services, Appraising; Ch. 16, Appraisal Concepts and Definitions, Appraiser

c. A fee based on the time and difficulty involved

621. What is an abstract of title? a. A history of all documents concerning a property b. A summary of the important documents concerning a property c. A history of all recorded documents concerning a property d. An estimate of fair market value of a property Reference: Ch. 9, Protecting Title, Abstracts

c. A history of all recorded documents concerning a property

642. In a lien-theory state, what will the borrower receive after making their final payment? a. Title b. A mortgage c. A letter of satisfaction d. A deed of reconveyance Reference: Ch. 12, Mortgage Theories and Documents Related to Loans, Satisfaction of Mortgage

c. A letter of satisfaction

269. All of the following are exempt from RESPA requirements, EXCEPT? a. A loan for the construction of a tenunit apartment building b. A loan for a commercial property c. A loan to purchase a new home in a subdivision d. An all cash payment for a singlefamily home Reference: Ch. 13, RESPA

c. A loan to purchase a new home in a subdivision

101. Which remedies are available when a seller breaches a contract? a. A suit for specific performance b. Buyer gets deposit returned c. A or b but not both d. Notifying FREC Reference: Ch. 11, Legal Remedies for Breach of Contract

c. A or b but not both

10. What does the license law require that a licensee complete before the first renewal of a Florida real estate license? a. A continuing education course b. A minimum number of transactions c. A post-licensing course d. A REALTOR orientation course Reference: Ch. 2, Renewing a Florida Real Estate License

c. A post-licensing course

847. If a developer bought a large parcel of land and wanted to develop and sell off small parts of it, it would be advisable to have which clause in his mortgage? a. A subordination clause b. A prepayment clause c. A release clause d. An acceleration clause Reference: Ch. 13, Loan Repayment Methods, Blanket Mortgage

c. A release clause

732. Which of the following individuals must have a real estate license to perform the action specified? a. An attorney at law when performing their normal duties b. An attorney in fact when executing conveyances and contracts c. A salaried apartment manager who leases units for more than one year d. A mobile home park manager leasing lots in the mobile home park Reference: Ch. 2, Individuals Who are Exempt from Licensure

c. A salaried apartment manager who leases units for more than one year

586. All of the following statements related to the role of the sales associate are correct, EXCEPT: a. A sales associate may only be employed by one broker at a time. b. A sales associate may only be compensated by their employing broker or owner-developer. c. A sales associate can be employed by the general public to perform real estate activities. d. A sales associate may only perform real estate activities authorized by their employer. Reference: Ch. 5, Sales Associate's Duties

c. A sales associate can be employed by the general public to perform real estate activities.

665. Why can't a sales associate work for more than one broker or one owner-developer at the same time? a. They owe it to the employer to work for at least 40 hours per week. b. The DBPR would have a hard time keeping up with where they are working. c. A sales associate or broker associate is an agent of the broker or owner that they are working for. d. The Federal Trade Commission, under Rule 27-S, prohibits a sales associate or broker associate from working for more than one employer at the same time. Reference: Ch. 5, Sales Associate's Duties

c. A sales associate or broker associate is an agent of the broker or owner that they are working for.

182. Which information is included in the public records? a. Real estate school test questions b. A licensee's test results c. A sales associate's application d. State exam answers Reference: Ch. 2, Obtaining a Florida Real Estate License, Answering Background Questions; Ch. 3, Testing New Applicants

c. A sales associate's application

317. What is an option contract? a. A unilateral contract, binding on both parties b. A bilateral contract, binding only on the optionee c. A unilateral contract, binding only on the optionor d. A bilateral contract, binding on both parties Reference: Ch. 11, Option Contracts

c. A unilateral contract, binding only on the optionor

309. Which item creates a formal contract? a. An acknowledgment b. Signatures c. A written form d. A notary's statement Reference: Ch. 11, Acknowledgment and Seal

c. A written form

770. What may a broker be guilty of if they do NOT perform under the terms and conditions of a listing contract? a. Larceny b. Bad faith c. Abandonment d. Renunciation Reference: Ch. 11, Listing Contracts, Termination of a Listing

c. Abandonment

853. Which clause in a mortgage benefits the lender? a. Exculpatory b. Defeasance c. Acceleration d. Redemption Reference: Ch. 12, Essential Elements of a Mortgage

c. Acceleration

122. The subject property has a garage. The comparable property has no garage. If a garage has a value of $14,500, and the comparable property sold for $149,900, what adjustment should be made? a. Add a $14,500 adjustment to the subject property b. Subtract a $14,500 adjustment from the subject property c. Add a $14,500 adjustment to the comparable property d. Subtract a $14,500 adjustment from the comparable property Reference: Ch. 16, Three Approaches to Value, Sales Comparison Approach

c. Add a $14,500 adjustment to the comparable property

885. In a civil action, who must be named as defendant if money from the Real Estate Recovery Fund is sought? a. FREC b. DBPR c. An individual broker or sales associate d. Any of the above Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

c. An individual broker or sales associate

811. The DBPR will most likely issue a license to all of the following individuals that otherwise qualify, EXCEPT: a. A citizen of a foreign country b. A resident of Georgia c. An individual under investigation for violating F.S. 475 d. A broker who does not have enough funds to open an office Reference: Ch. 6, Administrative Penalties, Range of Penalties - Denial of License

c. An individual under investigation for violating F.S. 475

315. What type of listing is held by two or more licensed brokers? a. A multiple listing b. An exclusive right of sale listing c. An open listing d. A net listing Reference: Ch. 11, Types of Listing Contracts

c. An open listing

881. A broker has a main office and eight branch offices. One of the sales associates, Maria, works out of several of the offices but spends most of her time working out of branch office number five. From which office must Maria be licensed? a. The main office b. Any office, to be chosen by Maria c. Any office, at the broker's discretion d. Branch office number five Reference: Ch. 5, Brokerage Office Requirements, Branch Office Requirements

c. Any office, at the broker's discretion

949. When do real property taxes become delinquent? a. December 31 of the tax year b. December 31 of the year following the tax year c. April 1 of the year following the tax year d. April 1 of the tax year Reference: Ch. 18, Paying the Tax Levy, Delinquent Property Taxes

c. April 1 of the year following the tax year

658. Which form of escrow settlement procedure requires the parties to abide by an objective third party's decision after a hearing? a. Escrow disbursement order b. Mediation c. Arbitration d. Attorney's legal opinion Reference: Ch. 5, Dispute Settlement Procedures

c. Arbitration

670. A broker has two apartments listed and gives their unlicensed assistant a 3x5 card with printed information to read to any prospects who call to inquire about the apartments. Which statement is correct? a. F.S. 475, exempts unlicensed assistants. b. This is a violation of F.S. 475. c. As long as the assistant reads the printed information and does not give subjective opinions, there is no violation. d. The assistant may act in the same capacity as the broker when dealing with prospects. Reference: Ch. 2, Activities Requiring a Real Estate License

c. As long as the assistant reads the printed information and does not give subjective opinions, there is no violation.

340. Under what circumstance is personal property included in the purchase of a home as additional security for the loan? a. As an optional extra feature b. As an additional down payment c. As part of a package mortgage d. Never Reference: Ch. 13, Types of Mortgages

c. As part of a package mortgage

652. Which of the following is required in a real estate brokerage partnership? a. All general partners must be active brokers. b. All officers and directors must be active brokers. c. At least one of the partners must be an active broker. d. All partners, officers, and directors must be active brokers. Reference: Ch. 5, Real Estate Brokerage Partnership

c. At least one of the partners must be an active broker.

929. What is the landlord's first step in the eviction process? a. Contact the sheriff b. Go to court c. Give three days' notice d. Give ten days' notice Reference: Ch. 7, Florida Landlord and Tenant Act, Eviction Process

c. Give three days' notice

978. Complete the sentence. If a tenant with a lease is in possession of the property, a purchaser or judgment creditor will: a. Be subject to the rights of the tenant for one year only b. Not be subject to the rights of the tenant c. Be subject to the rights of the tenant d. Be subject to the rights of the tenant in eviction proceedings only Reference: Ch. 7, Florida Landlord and Tenant Act

c. Be subject to the rights of the tenant

347. Who are the three parties in a trust deed? a. Benefactor, trustee, and trustor b. Beneficiary, mortgagor, and trustee c. Beneficiary, trustor, and trustee d. Beneficiary, mortgagee, and trustor Reference: Ch. 12, Title Theory of Mortgages

c. Beneficiary, trustor, and trustee

843. What type of mortgage allows for several parcels of land to be placed as collateral for a mortgage? a. Term b. Package c. Blanket d. Purchase money Reference: Ch. 13, Types of Mortgages

c. Blanket

271. Which entity published Regulation Z? a. Federal Trade Commission b. Federal Housing Administration c. Board of Governors of the Federal Reserve System d. Department of Veterans Affairs Reference: Ch. 13, Truth-in-Lending Act

c. Board of Governors of the Federal Reserve System

495. Buyer Norma gave sales associate Julie a postdated check as a binder deposit and told Julie the check would not clear until the following week. The broker was tied up with negotiations on a large transaction, so Julie presented Norma's offer and disclosed to the seller that the check was postdated and would not clear until next week. The seller asked Julie to hold the check and deposit it when the funds were available. The broker was unaware of this arrangement. Which statement is correct? a. No violation occurred since Julie properly disclosed the nature of the deposit, and the seller allowed the check to be held subject to clearance. b. Julie is in violation of the law, but the broker was unaware of the arrangement and has not violated the law. c. Both Julie and the broker are in violation of the law. d. There is no violation since postdated checks cannot be deposited. Reference: Ch. 5, Escrow Funds

c. Both Julie and the broker are in violation of the law.

946. An offer can be terminated by all of the following actions EXCEPT: a. A counteroffer b. Acceptance c. Breach d. Withdrawal Reference: Ch. 11, Termination of Offers

c. Breach

610. A licensed sales associate receives a cash binder deposit from a buyer on a parcel of land. Before the sales associate can give the deposit to the broker, the sales associate loses the deposit. Who is responsible? a. Broker b. Sales associate c. Broker and sales associate d. Buyer Reference: Ch. 5, Sales Associate's Duties, General Duties

c. Broker and sales associate

200. A sales associate went on vacation. While gone, the broker moved the office around the block. When the sales associate returned, there was an urgent message that two serious prospects had called. Also, a sale closed in his absence and the broker owes him a commission. What should the sales associate do first? a. Demand the commission b. Forget the commission since the sales associate wasn't there c. Call the two prospects immediately d. Immediately request a reissue of license from FREC Reference: Ch. 5, Sales Associate's Duties, Change of Employer or Address

c. Call the two prospects immediately

503. In Florida, what does the ten-mill cap apply to? a. Income taxes b. Intangible taxes c. City, county, and school tax districts d. Sales taxes Reference: Ch. 18, Real Property Taxation, The 10 Mill Cap

c. City, county, and school tax districts

392. All of the following are types of depreciation, EXCEPT: a. Physical deterioration b. External obsolescence c. Commercial depreciation d. Functional obsolescence Reference: Ch. 16, Cost-Depreciation Approach

c. Commercial depreciation

937. How would a property be transferred when an owner has been declared mentally incompetent? a. Widow's deed b. Referee's deed c. Committee's deed d. Personal representative's deed Reference: Ch. 9, Deeds, Special Purpose Deeds

c. Committee's deed

141. What results from zoning laws? a. Safer building methods are adopted b. Plat maps must be approved by the local planning agency c. Communities are divided into districts based on use d. Standards are set for style and compatibility Reference: Ch. 19, Zoning, Land Use Restrictions, and Building Codes

c. Communities are divided into districts based on use

373. Which combination of appraisal approach and property type would be agreeable to an experienced appraiser? a. Income approach: special-purpose properties b. Income approach: owner-occupied home c. Comparable sales approach: vacant land d. Cost-depreciation approach: residential land Reference: Ch. 16, Three Approaches to Value

c. Comparable sales approach: vacant land

110. Which process is used by the government to take private land for public use? a. Escheat b. Encroachment c. Condemnation d. Acknowledgment Reference: Ch. 9, Limitations on Property Ownership, Government Limitations on Private Property Ownership

c. Condemnation

917. If a complaint is withdrawn by the complainant to the DBPR, what will the DBPR probably do? a. Stop the investigation b. Fine the individual who made the complaint up to $1,000 and then drop the complaint c. Continue with the investigation d. Bring criminal charges against the complainant Reference: Ch. 6, The Disciplinary Process

c. Continue with the investigation

858. Which type of mortgage typically requires a higher down payment and interest rate than other common loan types? a. FHA b. VA c. Conventional mortgage d. Home equity line of credit Reference: Ch. 13, Types of Mortgages

c. Conventional mortgage

876. A sales associate receives negotiable securities from the purchaser as earnest money. What should the broker do with these securities? a. Place them immediately into the office safe until the date of closing, at which point they should convert them into cash. b. Immediately give the securities to the seller, who has the right to do anything they want with the money. c. Convert the securities into cash at the earliest practical time, and then deposit the proceeds immediately into the escrow account. d. Give the securities to the Department of Banking and Finance for their safekeeping, until the title closing. Reference: Ch. 5, Escrow Funds

c. Convert the securities into cash at the earliest practical time, and then deposit the proceeds immediately into the escrow account.

38. Which business entity may NOT register as real estate brokerage firm? a. Corporation b. Corporation not for profit c. Corporation sole d. General partnership Reference: Ch. 5, Types of Business Formations

c. Corporation sole

630. Due to possible problems with clear and marketable title, a broker should avoid properties owned by which of type of business? a. Partnership b. Corporations for profit c. Corporation sole d. Limited partnership Reference: Ch. 5. Types of Business Formations

c. Corporation sole

476. Closing date is January 10, and the day of closing belongs to the seller. The buyer has arranged for a new $200,000 mortgage at an interest rate of 8%. The prepaid interest due at closing is $956. Which of the following would be a correct entry on the closing statement? a. Debit buyer $956, credit seller $956 b. Credit buyer $956, debit seller $956 c. Debit buyer $956 d. Credit seller $956 Reference: Ch. 14, Section 2 - Prorations and Prepayments, Prorating an Interest Prepayment

c. Debit buyer $956

682. How would the purchase price be correctly entered on a closing statement? a. Debit seller, credit buyer b. Debit seller, disbursement to broker c. Debit buyer, credit seller d. Debit buyer, disbursement to broker Reference: Ch. 14, Section 1 - Total Purchase Price

c. Debit buyer, credit seller

472. An individual is buying an eight-unit apartment complex that closes on June 10 (closing day to the seller). If rent is $235.00 per month per unit in advance, how will the rent proration appear on the closing statement? a. Debit seller $626.67, credit buyer $626.67 b. Credit seller $1253.33, debit buyer $1253.33 c. Debit seller $1253.33, credit buyer $1253.33 d. Debit seller $1253.33, credit buyer $626.67 Reference: Ch. 14, Section 2 - Prorations and Prepayments, Prorating Rent

c. Debit seller $1253.33, credit buyer $1253.33 Daily rent = $235 ÷ 30; # Buyer days = 20; Rent proration = 8 units x ($235 ÷ 30) x 20 = $1,253.33

328. Under specific circumstances, real estate law allows a broker to appoint one sales associate to represent the seller and another to represent the buyer. What term is used for a sales associate who meets all the qualifications of these circumstances? a. Dual agent b. Transaction broker c. Designated sales associate d. Special agent Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

c. Designated sales associate

804. What term is used to refer to the rate that banks pay to the Federal Reserve? a. Overall capitalization rate b. Annuity capitalization rate c. Discount rate d. Federal Reserve reconciliation rate Reference: Ch. 13, Federal Reserve System

c. Discount rate

221. What is a licensee with full representation to both parties in the same transaction referred to as? a. Transaction broker b. Single agent c. Dual agent d. Subagent Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

c. Dual agent

351. Which clause in a mortgage calls for the principal balance to be paid in full? a. Satisfaction clause b. Defeasance clause c. Due on sale clause d. Cognovit clause Reference: Ch. 12, Essential Elements of a Mortgage

c. Due on sale clause

293. The neighbors have used Farmer Jones' "ruts" (easement by necessity) for over 20 consecutive years. It may now be considered an: a. Easement appurtenant b. Easement in gross c. Easement by prescription d. Implied easement Reference: Ch. 9, Private Limitations on Property Ownership

c. Easement by prescription

888. On behalf of which entity, can the Florida Real Estate Commission intervene? a. The applicant b. The Department of Business and Professional Regulation c. Either a or b d. Neither a nor b Reference: Ch. 3, The Florida Real Estate Commission

c. Either a or b

434. MacBurger USA wants to purchase a piece of land for the purpose of constructing a 15,000-square-foot restaurant to accommodate 85 people. The zoning ordinances require one parking space for every two people and that each space be six feet by 12 feet. In addition, they must allow 10% of the paved area for lanes and dividing lines. There are two lots available. Lot A is 100 feet by 200 feet; lot B is 90 feet by 210 feet. Which of the two lots might MacBurger choose? a. Lot A b. Lot B c. Either lot A or B d. Neither lot A nor B Math Concept: Total area needed = Area of parking lot (including extra 10% for lanes and dividing lines) + Area of the restaurant building

c. Either lot A or B # Spaces = 85 ÷ 2 = 42.5, or 43 spaces (rounded up); Parking area = 6 ft. x 12 ft. x 43 spaces = 3,096 sq. ft., which is 90% of the total paved area; 3,096 sq. ft. = 90% x Total paved area, so Total paved area = 3,096 sq. ft. ÷ 0.90 = 3,440 sq. ft.; Total area needed = 3,440 Total parking area + 15,000 Building = 18,440 sq. ft.; Lot A size = 100 x 200 = 20,000 sq. ft.; Lot B size = 90 x 210 = 18,900 sq. ft.; Both lots are bigger than the area needed.

624. What keeps a landowner in a key locational position from preventing the progress of the entire community? a. Estoppel b. Ergonometric policy of the city or county c. Eminent domain d. Escheat Reference: Ch. 9, Methods of Acquiring Title, Transfer by Involuntary Alienation

c. Eminent domain

377. What are the main steps in direct capitalization when using the income approach to valuation of real estate? a. Estimate the gross income, add in the operating expenses, and capitalize the net operation income b. Estimate the capitalization rate, adjust the gross income for vacancies and divide c. Estimate gross income, deduct the vacancies and operating expenses, and capitalize the net operating income into value by dividing by an overall rate d. Identify the gross income, plan the appraisal, and collect the expenses Reference: Ch. 16, Direct Capitalization Technique

c. Estimate gross income, deduct the vacancies and operating expenses, and capitalize the net operating income into value by dividing by an overall rate

177. A, B, and C bought 640 acres of land with equal and undivided interest. A and B were brokers, and C was not. A and B were frequent business partners but decided to let C handle the resale of the tract. C had very little experience but was able to find a buyer willing to pay a good price. Because of this, A and B decided to give C 40% of the profits and divide equally the balance of the profit. Which applies? a. C can do this if C is an attorney b. C can do this because A and B are brokers c. F.S. 475, has been violated d. Since C is selling C's own land, C does not have to be registered Reference: Ch. 2, Persons Who are Required to be Licensed

c. F.S. 475, has been violated

913. The DBPR issued a license in error to an applicant who actually failed the state exam. Which statement applies? a. The applicant may keep the license and go active b. FREC will immediately revoke the license with prejudice c. FREC will immediately revoke the license, but recommend the applicant apply for retesting d. FREC will likely suspend the license for one year Reference: Ch. 6, Administrative Penalties, Range of Penalties

c. FREC will immediately revoke the license, but recommend the applicant apply for retesting

687. Brokers Troy and Gail agree to cooperate on the sale of Jackie's house. The deal is closed and Jackie pays the full commission to Troy, the listing broker. Troy refuses to pay Gail her share. Of what may Troy be guilty? a. Concealment b. Poor judgment c. Failure to account and deliver d. Misrepresentation Reference: Ch. 4, Broker's Right to Compensation, Commission Disputes between Competing Brokers; Ch. 6, Administrative Penalties, Fraudulent Activities

c. Failure to account and deliver

788. Which action would be considered a first-degree misdemeanor? a. Advertising property in a fraudulent manner b. Failure to reconcile an escrow account c. Failure to comply with rules regarding rental lists d. Failure to give the required agency disclosure Reference: Ch. 6, Criminal Penalties

c. Failure to comply with rules regarding rental lists

367. All of the following entities are secondary mortgage market participants, EXCEPT: a. Fannie Mae b. Freddie Mac c. Federal Reserve d. Ginnie Mae Reference: Ch. 13, The Secondary Mortgage Market

c. Federal Reserve

987. A sales associate has a disagreement with the broker over a commission. The sales associate quits. What can the sales associate do to attempt to collect the commission? a. File a lawsuit against the owner of the property b. Ask FREC to settle the matter c. File a lawsuit against the former broker in civil court d. Collect from the Florida Real Estate Recovery Fund Reference: Ch. 5, Sales Associate's Duties, Compensation

c. File a lawsuit against the former broker in civil court

35. Jim is a sales associate applicant but has failed the state exam twice. After reviewing his most recent exam, he feels that some of the questions he missed were really correct and marked wrong in error. What may Jim do? a. File a complaint against the testing company b. Request a retest at no charge c. File a written objection to the questions during the scheduled question review d. Request an informal hearing before FREC Reference: Ch. 2, The State License Exam

c. File a written objection to the questions during the scheduled question review

318. A broker lists a property for $25,000, which must be all cash. A buyer makes an offer for $30,000 but asks the broker to show the additional $5,000 in the contract as a down payment, which the buyer does not intend to provide. The buyer does this to show a higher purchase price to the lender so that he can get approved for a $25,000 loan. Under this arrangement, the seller would only receive the $25,000, thereby meeting the seller's terms. What should the broker do? a. Charge a commission based on $30,000 b. Charge a commission based on $25,000 c. Find another buyer d. Withdraw from the listing Reference: Ch. 6, Administrative Penalties, Fraudulent Activities - Conspiracy

c. Find another buyer

247. If a licensee violates F.S. 475, the Commission is allowed to impose any of the following penalties, EXCEPT: a. Revoke the license b. Suspend the license c. Fine the licensee $10,000 d. Refuse to renew the license Reference: Ch. 6, License Law Violations; Criminal Penalties; Range of Penalties

c. Fine the licensee $10,000

244. Which court is the final court in the appeal process? a. Circuit court b. District court of appeals c. Florida Supreme Court d. Small claims court Reference: Ch. 6, The Disciplinary Process

c. Florida Supreme Court

736. Title insurance is designed to protect against which of the following? a. All defects in title b. Missing documents c. Forged documents d. Known defects Reference: Ch. 9, Title, Title Insurance

c. Forged documents

743. What property right does an individual have who owns a condominium unit? a. Tenancy at will b. Tenancy at sufferance c. Freehold estate d. Proprietary lease Reference: Ch. 8, Estates

c. Freehold estate

334. The purchase price of a business, less the value of the tangible assets of that business, equals the intangible assets of the business. Which item would be an intangible asset of the business? a. Real property b. Office furniture c. Goodwill d. Personal property Reference: Ch. 17, Business Enterprise and Opportunity Brokerage, Accounting Terms

c. Goodwill

298. Which of the following clauses in a deed names the parties, describes the property, shows legal consideration, and provides words of conveyance? a. Habendum clause b. Reddendum clause c. Granting clause d. Restriction clause Reference: Ch. 9, Clauses in Deeds

c. Granting clause

368. Who could be the seller? a. Mortgagor b. Vendee c. Grantor d. Grantee Reference: Ch. 9, Deeds; Ch. 11, Real Estate Sales Contracts; Ch. 12, Parties to a Mortgage

c. Grantor

136. Which law requires farmland near an urban area to be valued the same as more distant farmland for tax purposes? a. Statute of limitations b. Estoppel law c. Green belt law d. Zoning laws Reference: Ch. 18, Real Estate Tax Exemptions and Limitations

c. Green belt law

187. George Portfolio is a stockbroker who does not hold a real estate license. He believes the stock of the Gasaway Corporation has high potential. Upon contacting the president of Gasaway to assist the corporation in listing its stock for sale, he learns that the success of the company hinges on the negotiation of an oil lease. George offers his assistance, and the company engages him to negotiate the lease with Slick Slacker, the owner. Upon closing the lease, the company employs George as its stockbroker. George subsequently sells the corporation's stock. The corporation pays George a commission on the stock sale and gives him five shares for handling the oil lease. George: a. Is exempt as a salaried employee b. Acted properly functioning as a stockbroker c. Has violated F.S. 475 d. Has not violated F.S. 475 Reference: Ch. 2, Activities Requiring a Real Estate License

c. Has violated F.S. 475

541. A broker receives conflicting claims on an escrow deposit and requests an escrow disbursement order from the Commission. The Commission orders the money be given to the buyer. The seller obtains a judgment against the broker. What must the broker do? a. Borrow the money to pay the seller b. Ask the buyer to give the money back to the seller c. Have the claim paid by the recovery fund d. Require the sales associate to pay it Reference: Ch. 5, Escrow Funds, Dispute Settlement Procedures - Escrow Disbursement Order; Ch. 6, Administrative Penalties, Florida Real Estate Recovery Fund

c. Have the claim paid by the recovery fund

768. Bob, a resident of Kentucky, has been an active broker in Kentucky for ten years. Bob wishes to obtain a Florida real estate license. All of the following statements are correct, EXCEPT: a. He can take a Florida law exam and obtain a broker's license through mutual recognition if Kentucky has a mutual recognition agreement. b. He can apply for a broker's license, take the broker's course, and take the broker's state examination. c. He must begin again in Florida as a sales associate. d. He can apply for a sales associate license, take the sales associate course, pass the sales associate state examination, and be issued a sales associate license. Reference: Ch. 2, Obtaining a Florida Real Estate License, License Categories - Broker

c. He must begin again in Florida as a sales associate.

426. All of the following are characteristics of real estate, EXCEPT: a. Heterogeneous b. Market is elastic in the short run c. Homogeneous d. Immobility Reference: Ch. 15, Characteristics of the Real Estate Marke

c. Homogeneous

431. All of the following are physical characteristics of real estate, EXCEPT: a. Immobility b. Situs c. Homogeneous d. Heterogeneous Reference: Ch. 15, Physical Characteristics of Land

c. Homogeneous

553. The Florida Real Estate Commission has the power to impose any of the following penalties, EXCEPT: a. Impose a fine of not more than $5,000 per offense for a violation of F.S. 475 b. Impose a fine of not more than $5,000 per offense for a violation of Chapter 455, F.S. c. Impose a prison sentence of not more than one year d. Revoke the license Reference: Ch. 6, Administrative Penalties

c. Impose a prison sentence of not more than one year

292. What type of easement must be obtained when a utility company wants to put power line poles through a property? a. By prescription b. By necessity c. In gross d. Appurtenant Reference: Ch. 9, Private Limitations on Property Ownership

c. In gross

662. When estimating the value of a business, an appraiser would normally use which approach? a. Market approach b. Liquidation approach c. Income approach d. GRM technique Reference: Ch. 16, Three Approaches to Value

c. Income approach

350. What is the effect of positive leverage? a. Increases the lender's yield b. Increases the lender's loan to value yield c. Increases the borrower's yield d. Allows an individual to lift a heavy weight Reference: Ch. 17, Real Estate Investment Terminology, Leverage

c. Increases the borrower's yield

838. What happens if the Real Estate Recovery Fund doesn't have enough funds to pay claims? a. The claimant(s) will be paid from the state treasury. b. The sales associate or broker responsible will have to pay. c. Installments will be paid from the recovery fund as funds become available and paid in the order the claims were made. d. The claims will not be paid. Reference: Ch. 6, The Disciplinary Process, Florida Real Estate Recovery Fund

c. Installments will be paid from the recovery fund as funds become available and paid in the order the claims were made.

782. A mortgagor who purchases under the FHA 203(b) mortgage loan program may have monthly payments that include principal and what else? a. Interest b. Interest, taxes, and insurance c. Interest, taxes, insurance, and mortgage insurance premium d. Interest, taxes, insurance, mortgage insurance premium, and life insurance Reference: Ch. 13, Types of Mortgages, FHA Insured Mortgage Loan Programs

c. Interest, taxes, insurance, and mortgage insurance premium

316. A broker has a 90-day listing with Mr. and Mrs. Jones and shows the property to Mr. and Mrs. Smith prior to expiration of the listing. The Smiths show an interest in the property but go back north without making an offer. Next season, the Smiths are back and happen to meet Mr. and Mrs. Jones while shopping. After several meetings, the Smiths make an offer and purchase the property. The broker: a. Is the procuring cause of the sale and is entitled to a commission b. Is entitled to damages c. Is entitled to nothing d. May request FREC to interplead Reference: Ch.11, Listing Contracts, Broker's Right to Receive Compensation - Protection Period

c. Is entitled to nothing

537. Which statement is correct regarding a corporation sole? a. It can broker real estate deals. b. It allows title to go to the heir of the clergy in place. c. It allows title to go to the successor to the clergy in place. d. It acts like a corporation for profit. Reference: Ch. 5, Types of Business Formations, Corporation Sole

c. It allows title to go to the successor to the clergy in place.

467. The binder deposit shows on the seller's closing statement only under which condition? a. It is paid in cash. b. The deposit exceeds the commission. c. It is paid directly to the seller by the buyer. d. The closing will be handled by a title company. Reference: Ch. 14, Section 1 - Total Purchase Price, Binder Deposit

c. It is paid directly to the seller by the buyer.

14. Which of the following is a characteristic of group license? a. It allows a broker to have branch offices. b. It allows a sales associate to work for more than one broker. c. It may be held by a sales associate or broker associate. d. It allows a broker to qualify for more than one brokerage firm. Reference: Ch. 3, Group License and Multiple Licenses, Group License

c. It may be held by a sales associate or broker associate.

828. A Florida broker has an Alabama license suspended. How will this affect his Florida license? a. It will be automatically suspended. b. It will be automatically revoked. c. It may be suspended or revoked. d. It will not be affected. Reference: Ch. 6, The Disciplinary Process

c. It may be suspended or revoked.

504. The DBPR may investigate matters it considers a violation of the license law in which of the following situations? a. It may investigate only those individuals who are registered with the FREC as sales associates or brokers. b. It may investigate only upon courtordered subpoenas. c. It may investigate any person having knowledge of the facts of the case. d. It may investigate only if jurisdiction has been established by a proper court of law. Reference: Ch. 6, The Disciplinary Process

c. It may investigate any person having knowledge of the facts of the case.

81. Which statement correctly applies to owner's title insurance? a. It is transferable to new owners. b. It protects the mortgagee from title defects. c. It protects the buyer from title defects. d. It is required on all transactions. Reference: Ch. 9, Title Insurance

c. It protects the buyer from title defects.

191. Which of the following best describes the purpose of the real estate license law? a. It teaches salesmanship b. It aids licensees in understanding the basic practice of law c. It puts forth the fundamental principles of law that every licensee must adhere to in order to protect the public d. Both a and b Reference: Ch. 2, Real Estate License Law

c. It puts forth the fundamental principles of law that every licensee must adhere to in order to protect the public

944. How would a father and son own property together with the right of survivorship? a. Tenancy by entireties b. Tenancy at will c. Joint tenancy d. Tenancy in common Reference: Ch. 8, Estates

c. Joint tenancy

327. The owner of an apartment building would be required to provide all of the following EXCEPT: a. Heat and hot water b. Garbage pickup c. Laundry service d. Pest control services Reference: Ch. 7, Landlord's Obligation to Maintain the Premises

c. Laundry service

212. Which of the following limits the actions of brokers? a. Certificate of estoppel b. Statute of frauds c. Law of agency d. All of the above Reference: Ch. 4, Types of Laws and Their Purposes

c. Law of agency

763. A California broker refers a prospect to a Florida broker. The Florida broker sells the prospect a property in Boca Raton. Even though the California broker did not participate directly in the sale, and in fact was never even in the state, the Florida broker sends half the commission as a referral fee. This is: a. Legal only if the California broker attends the closing b. A violation since the California broker had no direct participation c. Legal d. A violation since the California broker is not licensed in Florida Reference: Ch. 4, Broker's Right to Compensation, Referral Fees

c. Legal

821. A seller listed a house with a broker. The seller informed the broker that he has had a change of heart and refuses to pay the broker's commission. The broker immediately files suit and places a lien on the seller's house. How has the broker acted? a. Properly and efficiently b. Within the limits imposed under F.S. 475 c. Legally, if the listing contract with the seller allowed them to do this d. Illegally, regardless of what is contained in the listing contract Reference: Ch. 11, Listing Contracts

c. Legally, if the listing contract with the seller allowed them to do this

962. What term refers to the amount of money necessary to duplicate an existing building? a. Actual cost b. Replacement cost c. Reproduction cost d. Market cost Reference: Ch. 16, Cost-Depreciation Approach

c. Reproduction cost

257. Michael and Jerry are both brokers. They decide to share office space. They do not use a trade name or common letterhead, although they share a secretary. Prior to putting up their signs, Jerry defrauds a prospect who came into the office. Based on this information, which statement is correct? a. Michael and Jerry have committed estoppel. b. Michael and Jerry are general partners. c. Michael can be held responsible for Jerry's acts. d. Jerry alone is responsible for this fraud. Reference: Ch. 5, Ostensible Partnership

c. Michael can be held responsible for Jerry's acts.

676. What is the instrument that is used to pledge real property as security for a debt? a. Promissory note b. Sales contract c. Mortgage d. Security deposit agreement Reference: Ch. 12, Mortgage Theories and Documents Related to Loans

c. Mortgage

846. What is the document entered into by two parties, which replaces a lien on a property? a. Construction lien (mechanic's lien) b. Lease c. Mortgage d. Option Reference: Ch. 12, Mortgage Theories, and Documents Related to Loans

c. Mortgage

980. Which would be a consideration in underwriting an FHA loan application but NOT considered for a VA loan? a. Borrower's monthly income b. Borrower's assets c. Mortgage insurance d. Borrower's credit history Reference: Ch. 13, Types of Mortgages

c. Mortgage insurance

357. All of the following entities make loans, EXCEPT: a. Life insurance companies b. Mortgage lenders c. Mortgage loan originators d. Commercial banks Reference: Ch. 13, The Primary Mortgage Market

c. Mortgage loan originators

867. What is produced by applying the loan constant to the loan amount? a. Interest b. Interest rate c. Mortgage payment d. Mortgage payoff Reference: Ch. 17, Evaluating Investment Properties, Loan Constant

c. Mortgage payment

400. When determining the net operating income (NOI) for direct capitalization, all of the following items are subtracted from the potential gross income (PGI), EXCEPT: a. Vacancies and collection losses b. Reserves for replacements c. Mortgage payments d. Property taxes Reference: Ch. 16, Income Approach - Direct Capitalization Technique

c. Mortgage payments

532. What would be considered an arm's-length transaction? a. Mr. Ajax to the Ajax Corporation b. Mr. Smith to Mrs. Smith (husband and wife) c. Mr. Black to Mrs. Jones (not related) d. Gateway Corporation to ABC investment (Gateway owns 15 shares of ABC) Reference: Ch. 4, Authorized Real Estate Brokerage Relationships, Arm's Length Relationship

c. Mr. Black to Mrs. Jones (not related)

812. All of the following are qualifications for a sales associate license, EXCEPT: a. Must be at least 18 years of age b. Must be a high school graduate or equivalent c. Must be a Florida resident for at least the preceding six months d. Must be honest, trustworthy and have a reputation for fair dealing Reference: Ch. 2, Obtaining a Florida Real Estate License, General Qualifications for Licensure

c. Must be a Florida resident for at least the preceding six months

562. A sales associate is selling their own property. What information would be required in the broker's advertisement? a. Agent and licensed real estate broker b. Owner-agent c. Name of the brokerage firm d. Name of the brokerage firm, owneragent, and sales associate's name Reference: Ch. 5, Brokerage Office Requirements, Personal Transactions

c. Name of the brokerage firm

8. All of the following would be grounds for suspension or revocation of a real estate license, EXCEPT: a. Not giving the proper agency disclosure b. Falsifying information on a license application c. Not being a resident of Florida d. False advertising Reference: Ch. 2, General Qualifications; Ch. 6, Exhibit 6.3

c. Not being a resident of Florida

729. Broker Greer closed down his real estate office and sold his inventory of listings to M and M Realty, Inc., an office down the street. This is: a. Legal, since listings are assignable b. Not legal without the knowledge and consent of the listing sales associate c. Not legal, since listings are not assignable d. Legal, since the broker can do anything he wants with the listings because he owns them Reference: Ch. 11, Listing Contracts

c. Not legal, since listings are not assignable

194. What should a sales associate do if they consider a rule to be invalid? a. Notify the state legislators b. Notify the local board of REALTORS c. Notify FREC d. Ignore the rule Reference: Ch. 3, Powers of the Commission

c. Notify FREC

911. A broker receives a binder deposit from a buyer who is making an offer on a property. Two days later, the property owner/seller makes a counteroffer, which is accepted by the buyer. The attorneys for buyer and seller disagree over the title to the property. Both buyer and seller make demands on the broker for the deposit. Based on this information, what should the broker do concerning the disputed deposit? a. Return it to the buyer b. Divide it between himself and the seller according to their agreement c. Notify the commission within 15 business days d. File for arbitration Reference: Ch. 5, Escrow Funds, Escrow Disputes

c. Notify the commission within 15 business days

720. What kind of partnership exists when one or more parties cause a third party to believe a partnership exists when no partnership actually does? a. Actual b. Constructive c. Ostensible d. General Reference: Ch. 5, Types of Business Formations

c. Ostensible

100. Which type of loan uses both real and personal property as security? a. Blanket mortgage b. Purchase money mortgage c. Package mortgage d. Chattel mortgage Reference: Ch. 13, Types of Mortgages

c. Package mortgage

739. Broker Pat shows a home to a prospect. Pat offends the prospect by telling a dirty joke. The prospect advises Pat that they will not deal through them and goes to broker Terry who shows the prospect the very same house and closes the deal. The home was an open listing. Which statement best applies? a. Pat can collect a full commission. b. Terry must split the commission 50/50 with Pat. c. Pat cannot collect a commission. d. Neither Pat nor Terry is entitled to a commission. Reference: Ch. 4, Broker's Right to Compensation, Procuring Cause of Sale; Ch. 11, Listing Contracts, Types of Listing Contracts - Open Listings

c. Pat cannot collect a commission.

18. Bill's license expired on September 30. On February 14, of the following year, he wants to renew it. If it is not his first renewal, what must Bill do? a. Start over with a pre-license course b. Pay a late fee and complete two 14- hour continuing education classes c. Pay a late fee and complete 14 hours of continuing education d. Pay a late fee and complete 45 hours of post-license education Reference: Ch. 2, Renewing a Florida Real Estate License

c. Pay a late fee and complete 14 hours of continuing education

813. A sales associate misplaced their license. What must they do? a. Request a new license, but pay no fee b. Wait for the license to be renewed at which time they will receive a new copy c. Pay the appropriate fee, file the appropriate paperwork, and request a new copy d. Ask their broker for a photocopy of the office license Reference: Ch. 3, Licensing Periods, Reissue

c. Pay the appropriate fee, file the appropriate paperwork, and request a new copy

63. An owner of a piece of real estate has purchased the materials to fence the backyard. What type of property is the fencing material? a. Trade fixture b. Real estate c. Personal property d. Fixture Reference: Ch. 8, Real and Personal Property

c. Personal property

924. Which entity enforces deed restrictions? a. The planning commission b. The DBPR c. Private owners d. The FREC Reference: Ch. 9, Limitations on Property Ownership, Private Limitations on Property Ownership

c. Private owners

242. A broker has been found guilty of mail fraud by a court and sent to jail. The broker's license will: a. Automatically be revoked b. Automatically be suspended c. Probably be revoked because of the conviction d. Be renewed while he is in jail Reference: Ch. 6, The Disciplinary Process; Exhibit 6.3

c. Probably be revoked because of the conviction

765. Which document allows a buyer of a cooperative to occupy a unit? a. Lease b. Contract for deed c. Proprietary lease d. Deed Reference: Ch. 8, Condominiums, Cooperatives, and Timeshares, Cooperative Association

c. Proprietary lease

11. In a brokerage corporation, the officers and directors can be active or inactive brokers or nonlicensed registered persons. If someone who is nonlicensed and registered wants to become a broker, what must they do? a. File an application with the secretary of state b. Only take a 40-question law exam c. Qualify for a broker license in the same way as anyone else d. Demonstrate two years of experience in the real estate business Reference: Ch. 2, Obtaining a Florida Real Estate License, License Categories, Broker; Ch. 5, Real Estate Brokerage Corporation

c. Qualify for a broker license in the same way as anyone else

51. The Fair Housing Act of 1968 (as amended) prohibits discrimination based upon: a. Race, color, citizenship, sex, family status, or religion b. Race, color, religion, sex, age, national origin, or handicap c. Race, color, religion, sex, national origin, family status, or handicap d. Race, color, age, residency, sex, national origin, or handicap Reference: Ch. 7, Federal Fair Housing Laws

c. Race, color, religion, sex, national origin, family status, or handicap

832. In the event of a foreclosure of an income producing property, who may collect rents? a. Marshal b. Broker c. Receiver d. Tenant Reference: Ch. 12, Essential Elements of a Mortgage - Receivership Clause

c. Receiver

376. What is the term used to refer to the process of arriving at a final estimate of value in appraising? a. Highest and best use b. Averaging c. Reconciliation d. Computation Reference: Ch. 16, The Appraisal Process

c. Reconciliation

956. A broker sells a prospective tenant a rental list for $200. The prospective tenant decided not to rent in the area and did not use the list. The tenant then demanded a refund within 30 days. What action should the broker take? a. Refund $200 b. Refund $50 c. Refund $150 d. No refund needs to be made Reference: Ch. 5, Rental Information

c. Refund $150

756. A broker asks a sales associate to fill out documents in a manner that the sales associate knows is illegal. What should the sales associate do? a. Comply with the broker's request b. Ask FREC for instructions c. Refuse to comply d. Handle the matter in a way that they deem appropriate Reference: Ch. 5, Broker's Liability for Fraudulent Activity; Ch. 6, Administrative Penalties, Fraudulent Activities

c. Refuse to comply

62. The courts usually apply legal tests to determine if personal property has become a fixture. Which of the following is included in those tests? a. Date of purchase b. Extent of the parties c. Relationship of the parties d. All of the above Reference: Ch. 8, Real Estate Transaction Property Distinctions

c. Relationship of the parties

981. Ownership rights are conveyed but not legal title with which type of estate? a. Tenancy at will b. Fee simple estate c. Remainder estate d. Estate for years Reference: Ch. 8, Estates

c. Remainder estate

325. Health ordinances are local laws and rules created to protect the general welfare of the citizens in the community. These could include all of the following areas of coverage, EXCEPT: a. Limitations on type and number of pets b. Restrictions and rules for outside burning c. Restrictions on the legal use of land d. Restrictions on permissible noise levels Reference: Ch. 19, Zoning, Land Use Restrictions, and Building Codes

c. Restrictions on the legal use of land

823. A sales associate sells a listing of another broker. The buyer gives a check made payable to the sales associate. What should the sales associate do? a. Cash the check, and give the money to the employing broker b. Cash the check, and give the money to the listing broker c. Return the check to the buyer, and ask that it be reissued to the employing broker d. Return the check to the buyer, and ask that it be reissued to the listing broker Reference: Ch. 5, Escrow Funds

c. Return the check to the buyer, and ask that it be reissued to the employing broker

19. Ron and his wife each have real estate licenses before he enters the military. Ron is stationed in Washington, D.C., and his wife accompanies him there. If they make their licenses inactive: a. Only Ron is exempt from renewal requirements until six months after he is discharged. b. Only Ron is exempt from renewal requirements until 12 months after he is discharged. c. Ron and his wife are exempt from renewal requirements until two years after Ron's discharge. d. Ron and his wife are exempt from renewal requirements until 12 months after Ron's discharge. Reference: Ch. 2, Members of the Armed Forces

c. Ron and his wife are exempt from renewal requirements until two years after Ron's discharge.

654. A Florida real estate licensee is permitted to draw up which of the following items? a. Deeds b. Purchase money mortgages c. Sales contracts and the approved fill-in-the-blank residential lease d. Promissory notes Reference: Ch. 11, Real Estate Sales Contracts, Right to Prepare Contracts

c. Sales contracts and the approved fill-in-the-blank residential lease

479. Builder Paul obtained a mortgage to develop lots in a new subdivision, with a release clause allowing the sale of each lot for $10,000. Broker Sally locates a buyer for one of the lots for $9,000, which Paul agrees to accept. Without disclosing the terms of the mortgage to the buyer, Sally sells the lot. Based on this information, which statement is correct? a. Paul must pay $1,000 to the bank at closing. b. Sally must make up the difference. c. Sally has committed fraud. d. Paul and Sally have formed a conspiracy. Reference: Ch. 6, Fraudulent Activities; Ch. 12, Essential Elements of a Mortgage - Release Clause

c. Sally has committed fraud.

723. Who may issue summary suspensions? a. FREC chairperson b. The court c. Secretary of the DBPR or their representative d. Probable Cause Panel of the Florida Real Estate Commission Reference: Ch. 6, The Disciplinary Process

c. Secretary of the DBPR or their representative

149. In which market would there be a shortage of housing? a. Buyers' market b. Housing market c. Sellers' market d. Deficit market Reference: Ch. 15, Competition in the Marketplace

c. Sellers' market

188. Mr. White referred his sister to a real estate broker, and she purchased a $200,000 home. What may the broker do to show his thanks? a. Take Mr. White to dinner b. Give Mr. White a bottle of wine c. Send a thank you note to Mr. White d. Pay a referral fee Reference: Ch. 4, Referral Fees

c. Send a thank you note to Mr. White

932. What could cause a fixture to be converted into personal property? a. Attachment b. Severalty c. Severance d. Accretion Reference: Ch. 8, Real and Personal Property, Fixtures

c. Severance

496. Sales associate Sandra wants to advertise her home for sale. What may happen if she advertises in her own name only? a. She may be charged with acting as a broker. b. This would be considered a blind ad, and she is subject to disciplinary action by the commission. c. She may do so but must reveal her licensed status prior to entering into serious negotiations. d. She may do so but must divulge her identity as a licensee in the ad. Reference: Ch. 5, Brokerage Office Requirements, Personal Transactions

c. She may do so but must reveal her licensed status prior to entering into serious negotiations.

300. Which of the following is essential for a deed to be valid? a. Competent grantee, both legally and mentally b. Acknowledged and recorded c. Signed by the grantor and/or grantors d. Stipulates the exact amount of consideration involved Reference: Ch. 9, Deeds

c. Signed by the grantor and/or grantors

752. How would intangible taxes typically appear on a closing statement? a. Double-entry debit to the buyer and a credit to the seller b. Double-entry credit to the buyer and a debit to the seller c. Single-entry debit to the buyer d. Single-entry debit to the seller Reference: Ch. 14, Section 3 - Expenses, State Intangible Tax on Mortgages

c. Single-entry debit to the buyer

583. Real estate brokers usually represent customers as what type of agent? a. Universal agent b. General agent c. Special agent d. Quasi-agent Reference: Ch. 4, Agency Law

c. Special agent

571. How would a new sidewalk be paid for? a. Ad valorem taxes b. Income taxes c. Special assessment taxes d. Property taxes Reference: Ch. 18, Calculating a Real Estate Tax Levy

c. Special assessment taxes

556. What is a closing statement? a. Seller's statement of settlement costs b. Buyer's statement of settlement costs c. Statement of settlement costs between the buyer and seller d. Statement recorded in the public records evidencing title transfer Reference: Ch. 14, Closing Statements

c. Statement of settlement costs between the buyer and seller

53. A licensee picks the properties a particular buyer is shown based on the race of the buyer. What is this illegal act? a. Redlining b. Blockbusting c. Steering d. Commingling Reference: Ch. 7, Federal Fair Housing Act

c. Steering

848. What term refers to a written contract, often used in conjunction with a mortgage refinance, in which a lender and property owner agree to a change in lien priority? a. Prepayment agreement b. Reprioritization contract c. Subordination agreement d. Escalation agreement Reference: Ch. 12, Mortgage Theories, and Documents Related to Loans

c. Subordination agreement

969. If the comparable property were better than the subject property in size, what adjustment would be appropriate? a. Add to the comparable property b. Add to the subject property c. Subtract from the comparable property d. Subtract from the subject property Reference: Ch. 16, Sales Comparison Approach

c. Subtract from the comparable property

201. Sales associate, Tim, received a signed contract from a buyer and mailed it to the seller. The seller agreed to the terms and the escrow deposit was deposited safely in the broker's escrow account. Tim has a disagreement with his broker and quits. The broker refuses to pay a commission since Tim was not in their employ when the contract was actually received and signed. What should Tim do? a. Notify the state b. Sue the seller for his share c. Sue the broker d. Forget it; he is not entitled to the commission Reference: Ch. 5, Sales Associate's Duties, Compensation

c. Sue the broker

880. Six people organize a business to buy and sell real property. The title is to be held in trust by a board of trustees or someone in a position of trust. They have been required to file a declaration of trust with the Secretary of State. What type of business is being formed? a. Corporation for profit b. Corporation sole c. Syndicate d. Limited partnership Reference: Ch. 5, Types of Business Formations

c. Syndicate

261. Broker Smith owns a Real Estate Brokerage Corporation. When filing his tax return, he forgets to include a referral fee received from a Georgia broker. What will the Commission most likely do? a. Suspend the broker's license b. Not renew the broker's license c. Take no action if Smith files an amended return with the IRS and pays any penalties involved d. Cancel the corporation's license Reference: Ch. 6, Range of Penalties; Notice of Noncompliance

c. Take no action if Smith files an amended return with the IRS and pays any penalties involved

518. Smith owns an orange grove and a warehouse. Smith died intestate, and the court appointed Brown to dispose of Smith's assets. What can Brown do? a. Dispose of these assets only if Brown has a real estate license b. May not dispose of these assets under any circumstances c. Take the necessary steps to sell the properties and be compensated for their efforts d. Take the necessary steps to sell the properties, provided Brown receives no compensation Reference: Ch. 2, Individuals Who are Exempt from Licensure

c. Take the necessary steps to sell the properties and be compensated for their efforts

955. Two brokers are working on an exchange. The commission agreement for each property is the same percentage. The properties are of unequal value, and the brokers decide to combine their commissions and split 50/50. What must the brokers do first to make this legal? a. Nothing b. Tell the owners c. Tell the owners and get them to agree d. Notify the FREC in writing Reference: Ch. 4, Broker's Right to Compensation

c. Tell the owners and get them to agree

254. What is the maximum time the license can be suspended on the first offense? a. Two years b. Five years c. Ten years d. No suspension is likely on the first offense Reference: Ch. 6, Range of Penalties

c. Ten years

287. Jim, Matt, and Jack were co-owners of a parcel of real property. Matt died, and his co-ownership passed according to his will to become part of his estate. What type of tenancy did Matt have? a. Tenancy by the entireties b. Joint tenancy c. Tenancy in common d. Tenancy at will Reference: Ch. 8, Estates

c. Tenancy in common

760. Three members of a family purchase an office building without the right of survivorship. One dies. What type of estate do the remaining family members have? a. Tenancy by the entireties b. Joint tenancy c. Tenancy in common d. Tenancy for life Reference: Ch. 8, Estates

c. Tenancy in common

484. A Florida broker was arrested in Alabama and charged with possession of stolen property. The broker has confessed to a role in a theft ring and has provided the names of his accomplices. Should the FREC be made aware of this prior to the case going to trial, what action would it take regarding the broker's license? a. The Commission cannot take action against the broker until the broker is proven guilty in a court of law. b. The broker will be suspended pending the outcome of the trial. c. The Commission may revoke the broker's license. d. Since the activity does not involve real estate, and occurred outside the state of Florida, the Commission has no jurisdiction over the broker's actions. Reference: Ch. 6, Administrative Penalties; The Disciplinary Process; Exhibit 6.3

c. The Commission may revoke the broker's license.

931. Who must approve the appointment of the director of the Division of Real Estate by the secretary of the Department of Business and Professional Regulation? a. The governor b. The secretary of state c. The FREC d. The attorney general Reference: Ch. 3, The Department of Business and Professional Regulation, Authorization and Administration

c. The FREC

256. A person being investigated by the Department of Business and Professional Regulation must be notified in all of the following situations, EXCEPT: a. There is probable cause that there may have been a violation of F.S. 475. b. There is probable cause that there may have been a violation of Chapter 61J2, F.A.C. c. The act that is under investigation is a criminal offense. d. The investigation is ordered by the DBPR. Reference: Ch. 6, The Disciplinary Process

c. The act that is under investigation is a criminal offense.

204. Sales associate John attends a cocktail party with his friend Bill, where he introduces Bill to another friend, Jack. It turns out that Jack has a house for sale, and Bill agrees to purchase it. Sales associate John makes it clear that he wants no commission, but John's broker demands a commission. Which statement is correct? a. The broker is the procuring cause and is entitled to a commission. b. The broker should reduce his commission because of John's friendship. c. The broker is not entitled to a commission. d. The broker is entitled to a referral fee only. Reference: Ch. 4, Broker's Right to Compensation

c. The broker is not entitled to a commission.

921. Complete the sentence. Before a FREC rule can be introduced into a court of law, a certificate of the rule must be presented with the signature of: a. The secretary of the DBPR b. Any member of the FREC c. The chairperson of the FREC d. The director of the DRE Reference: Ch. 3, Powers of the Commission

c. The chairperson of the FREC

783. Before registration is granted to a "foreign" corporation to do brokerage business in the state of Florida, it must have at least one active Florida broker and: a. The corporation must reincorporate in the state of Florida. b. The corporation must get approval from the Governor's Office of Reincorporation. c. The corporation must receive a letter from the Florida secretary of state, giving permission to do business in Florida. d. Nothing else; a "foreign" corporation may never do brokerage business in Florida. Reference: Ch. 5, Types of Business Formations, Corporation for Profit

c. The corporation must receive a letter from the Florida secretary of state, giving permission to do business in Florida.

751. Who normally manages a corporation for profit? a. The member stockholders working through the executive officers b. The executive officers working through the directors c. The directors of the corporation working through the executive officers d. The stockholders of the corporation working through the directors Reference: Ch. 5, Types of Business Formations, Corporation for Profit

c. The directors of the corporation working through the executive officers

839. From which of the following may a sales associate receive compensation, referral fees, or bonuses? a. Another sales associate b. Another broker c. The employing broker d. An FSBO Reference: Ch. 5, Sales Associate's Duties, Compensation

c. The employing broker

679. A farmer gives a $15,000 listing with a 90-day protection period to a broker for a six-month term, agreeing to a 10% commission. After five months, the broker brings a prospect to see the property. The prospect refuses to pay $15,000. The farmer takes the prospect aside and tells them to come back in 30 days. After the 30 days, the farmer sells the property directly to the prospect for $14,000. Which statement is correct? a. The farmer owes the broker $1,500 as procuring cause. b. The farmer and the prospect each owe the broker as a result of the conspiracy to defraud the broker. c. The farmer owes the broker $1,400. d. The broker can do nothing as the listing has expired. Reference: Ch. 11, Listing Contracts, Broker's Right to Receive Compensation - Protection Period

c. The farmer owes the broker $1,400.

137. The Johnsons have lived in their home for the last four years. Now they are selling and expect a profit of nearly $200,000. Which statement applies? a. $125,000 of the gain can be excluded from being taxable. b. The gain can be moved to another house of equal or greater value to delay the tax. c. The gain is exempt from tax. d. They must pay tax on 40% of the gain. Reference: Ch. 18, Save Our Homes Benefit Portability to a New Residence

c. The gain is exempt from tax.

649. What happens with negative amortization? a. The monthly payment amount increases. b. The term of the loan increases. c. The loan balance increases. d. The term of the loan decreases. Reference: Ch. 13, Loan Repayment Methods, Amortized Mortgage

c. The loan balance increases.

202. Who is the principal, or employer? a. The buyer b. The seller c. The one who engages the broker in a single agency relationship d. The one who pays the broker Reference: Ch. 4, Definitions

c. The one who engages the broker in a single agency relationship

689. A broker gets a 90-day exclusive right of sale listing on a house for $50,000 and promises to advertise it for two weeks. The owner agrees to pay the broker a 6% commission if the broker is successful in finding a buyer. The broker advertises the property as agreed in the listing contract. Forty-five days into the listing contract, the seller sells the house himself to an old army buddy for $45,000. Which statement applies? a. The owner owes the broker $3,000. b. The owner does not have to pay the broker a commission. c. The owner owes the broker a $2,700 commission. d. The owner will owe the broker the usual and customary commission of the community. Reference: Ch. 11, Listing Contracts, Types of Listing Contracts - Exclusive Right of Sale Listing

c. The owner owes the broker a $2,700 commission. Commission = $45,000 x .06 = $2,700

229. Broker Davis, Broker Ben, and Broker Boone form a partnership. The partnership buys, develops, and sells land. Sales associate Jerry becomes an equal partner in the firm. A sale is made, resulting in a $40,000 profit. Which statement is correct? a. The partnership is illegal unless Jerry becomes broker. b. The partnership agreement must be filed with the Secretary of State. c. The profits may be divided equally. d. Jerry cannot receive any portion of the profit. Reference: Ch. 5, Types of Business Formations, General Partnership

c. The profits may be divided equally.

719. Mr. Smith makes an offer to buy a property. The offer is accepted. Two days before the closing, Mr. Smith says, "I am not Mr. Smith, I am Mr. Brown, and I do not want to close." Which statement applies? a. The broker can sue for commission. b. The buyer does not have to buy. c. The seller can sue for specific performance. d. The broker can sue for specific performance. Reference: Ch. 11, Contract Termination, Legal Remedies for Breach of Contract

c. The seller can sue for specific performance.

348. Which entity regulates a life insurance company in the primary mortgage market? a. RESPA b. The federal government c. The state in which it operates d. None, they are not regulated Reference: Ch. 13, The Primary Mortgage Market

c. The state in which it operates

36. Craig is a real estate sales associate working for ABC Realty, Inc. Craig decides to have refrigerator magnets made to give out to the public. What must he include on the magnets? a. Since Craig is paying for them, he can put anything he wants on them. b. They must contain Craig's license status. c. They must contain the name ABC Realty, Inc. d. They must contain the word REALTOR or broker. Reference: Ch. 5, Advertising

c. They must contain the name ABC Realty, Inc.

238. What should a new sales associate expect his broker to provide? a. Salary b. Business cards c. Training d. Health insurance Reference: Ch. 4, Policy and Procedures Manual

c. Training

604. What is required for a transfer of title? a. Signature, under seal, and two witnesses b. Signature, two witnesses, and acknowledged c. Two witnesses, signed, and delivered d. Two witnesses and acknowledged Reference: Ch. 9, Deeds, Transferring Title

c. Two witnesses, signed, and delivered

412. After what period of time may a tax certificate holder request a tax deed? a. One year, but not after five years b. Two years, but not after five years c. Two years, but not after seven years d. Three years, but not after eight years Reference: Ch. 18, Paying the Tax Levy, Redemption of a Tax Certificate

c. Two years, but not after seven years

268. A private club has a lodge in the mountains. The club refuses to rent rooms in the lodge to certain minority groups. Which statement applies? a. This is a violation of the Fair Housing Act. b. This is a violation of the Civil Rights Act of 1968. c. Under the Fair Housing Act, they may restrict rentals to members of their own club. d. Under the Fair Housing Act, they may discriminate. Reference: Ch. 7, Federal Fair Housing Laws

c. Under the Fair Housing Act, they may restrict rentals to members of their own club.

809. An appraiser using the direct capitalization technique would deduct which of the following from PGI to obtain the EGI? a. NOI b. DS c. V&C d. Depreciation Reference: Ch. 16, Income Approach, Direct Capitalization Technique

c. V&C

789. A buyer makes an offer that the seller accepts. Before the broker can tell the buyer of the acceptance of his offer, the buyer dies. What is the most likely status of the contract? a. Valid because the buyer accepted b. Valid but will be voided at time of closing because the deed cannot be granted c. Void because the buyer did not know the offer was accepted before he died d. Void because the buyer did not initial the seller's acceptance Reference: Ch. 11, Contract Negotiation, Termination of Offers

c. Void because the buyer did not know the offer was accepted before he died

884. When can a sales contract that is witnessed, executed, and acknowledged be recorded in the public records of the county in which the property is located? a. When the licensee thinks the seller may back out b. When the licensee hears rumor that the seller may accept a contract from someone else c. When the seller requests it d. When it will not delay the closing Reference: Ch. 11, Real Estate Contracts

c. When the seller requests it

551. A broker is the active broker for ABC Realty, Inc. They wish to open a second office called XYZ Realty, Inc. and be the active broker for that office as well. Under what condition can the broker do this? a. Under no circumstances b. With a group license c. With multiple licenses d. After requesting a FREC hearing on the matter Reference: Ch. 3, Group License and Multiple Licenses

c. With multiple licenses

542. A broker asks his secretary to attend an open house. The secretary quotes prices and terms to prospective buyers, as per the broker's instructions. Is this a violation of license law? a. No, as long as the secretary doesn't prepare the contract b. Yes, because the secretary is holding an open house c. Yes, because the secretary is doing things that require a license d. No, as long as the secretary only gives subjective comments Reference: Ch. 2, Activities Requiring a Real Estate License

c. Yes, because the secretary is doing things that require a license

938. What term is used to refer to the use of borrowed funds to finance the purchase of real estate? a. Conspiracy b. Conversion c. Commingling d. Leverage Reference: Ch. 17, Real Estate Investment Terminology

d. Leverage

209. Which township is immediately west of T1N, R1E? a. T2N, R1E b. T2N, R1W c. T1N, R2E d. T1N, R1W Reference: Ch. 10, Government Survey Method

d. T1N, R1W

86. The horizontal strip of land six miles wide immediately north of the Tallahassee baseline would be: a. Township 1 East b. Section 1 North c. Range 1 North d. Township 1 North Reference: Ch. 10, Government Survey Method

d. Township 1 North

236. Unless there is a reasonable benefit for the borrower, the Florida Fair Lending Act prohibits a lender from refinancing the same borrower within how many months? a. 6 b. 12 c. 15 d. 18 Reference: Ch. 13, Florida Fair Lending Act

d. 18

595. Calculate the cost per square foot on a lot 40 feet by 60 yards selling for $21,780 per acre. a. $2.00 b. $1.00 c. $.58 d. $.50 Reference: Ch. 10, Common Area Measurements

d. $.50 Convert selling price per acre to price per sq. ft.: $21,780 ÷ 43,560 = $0.50 per sq. ft

418. Mr. Brown sold his home for $160,000; $10,000 was allocated for closing costs, leaving him with a net of $150,000. Seven years prior to the sale of his home, Mr. Brown purchased the home for $100,000, thereby realizing a profit of $50,000. Mr. Brown had lived in the home for seven years. How much of the capital gain is taxable in the year of the sale? a. $15,000 b. $5,000 c. $1,000 d. $0 Reference: Ch. 18, Tax Benefits of Homeownership - Sale of Principal Residence

d. $0

166. Calculate the total state taxes due in the following transaction: The sales price is $249,480. The buyer will assume the seller's first mortgage of $190,000. The seller has agreed to take back a new purchase money second mortgage for $25,000. a. $1,796.50 b. $2,176.50 c. $2,461.50 d. $2,549.00 Reference: Ch. 14, Section 3 - Expenses

d. $2,549.00 Total taxes = S + I + N; (S) Seller's tax on deed: $249,480/100 = $2,494.80, which rounds up to $2,495; $2,495 x $.70 = $1,746.50; (I) Intangible tax = $25,000 new loan x $.002 = $50; (N) Note tax = ($190,000 + $25,000)/100 x $.035 = $752.50; Total = $1746.50 (S) + $50 (I) + $752.50 (N) = $2,549

165. A ten-year-old home is being appraised. The square footage of gross living area is 3,680 and there is also a 420-square-foot garage. If the construction cost is $70 per square foot for living area and $35 for a garage, what is the reproduction cost of the structure? a. $128,800 b. $158,200 c. $257,600 d. $272,300 Reference: Ch. 16, Cost-Depreciation Approach

d. $272,300 Cost = (3,680 x $70) Living area + (420 x $35) Garage = $257,600 (Living area) + $14,700 (Garage) = $272,300

475. Closing date is June 5, and the day of closing belongs to the buyer. Annual real estate taxes are $730. Using the 365-day method, prorate the amount of taxes debited to the seller. a. $420 b. $418 c. $312 d. $310 Reference: Ch. 14, Section 2 - Prorations and Prepayments, Prorating Property Taxes

d. $310 # Seller days = 31 + 28 + 31 + 30 + 31 + 4 = 155; Tax owed by seller = ($730 ÷ 365) x 155 = $310

994. If you borrowed $40,000 for 30 years at a 10% rate of interest, and would pay a total of $86,370.80 in interest if the loan were held to maturity, what is the monthly payment? a. $239.92 b. $333.33 c. $346.22 d. $351.03 Reference: Ch. 13, Amortizing Loan Payments

d. $351.03 # monthly payments = 30 years x 12 months = 360; Total paid = $40,000 Principal + $86,370.80 Interest = $126,370.80; Monthly payment = $126,370.80 ÷ 360 payments = $351.03

890. In order to collect from the Real Estate Recovery Fund, the claim must be filed within what period of time after the act was or should have been discovered? a. 30 days b. 90 days c. 1 year d. 2 years Reference: Ch. 6, The Disciplin

d. 2 years

438. Mr. Smith buys a house for $38,000. He pays 10% down and will take out a mortgage on the balance at 14% interest for 30 years. The monthly loan constant is .011849. What is the total amount of interest paid in the third month? a. $432.77 b. $399.00 c. $398.93 d. $398.85 Reference: Ch. 17, Loan Constant; Ch. 13, Amortizing Loan Payments

d. $398.85 Loan amount = $38.000 x 90% = $34,200; Loan payment = $34,200 x .011849 = $405.24; Month 1: I = $34,200 x .14 ÷ 12 = $399.00; Month 2: Principal = $34,200 - ($405.24 - $399) = $34,193.76; I = 34,193.76 x .14 ÷ 12 = $398.93; Month 3: Principal = $34,193.76 - ($405.24 - $398.93) = $34,187.45; I = $34,187.45 x .14 ÷ 12 = $398.85

175. A homeowner purchased a primary residence for $395,500 including $15,000 in closing costs and $60,000 for the lot. After the closing, hurricane shutters were installed at a cost of $12,600. What is the adjusted basis for tax purposes? a. $348,100 b. $423,100 c. $382,900 d. $408,100 Reference: Ch. 18, The Effect of Federal Income Taxes on Homeownership, Tax Benefits of Homeownership

d. $408,100 Adjusted basis = $395,500 (Cost basis) + $12,600 (Improvements) = $408,100

251. What is the maximum administrative fine for a violation of F.S. 475? a. $500 b. $1,000 c. $1,500 d. $5,000 Reference: Ch. 6, Range of Penalties

d. $5,000

454. A seller wishes to net $55,000 after paying a 7% commission. What should the selling price be? a. $55,000 b. $58,000 c. $58,850 d. $59,140 Reference: Ch. 11, Types of Listing Contracts - Net Listings

d. $59,140 Listing price = $55,000 ÷ .93 = $59,139.78, rounded to $59,140

164. In November, the seller paid $1,375 for the annual property taxes. The closing date is December 14, and the day of closing belongs to the seller. Using the 365-day method, what prorated amount of taxes will be debited to the buyer? a. $1,310.96 b. $1,194.18 c. $180.82 d. $64.04 Reference: Ch. 14, Prorating Property Taxes

d. $64.04 Buyer days: 31 - 14 = 17 days; Debit = $1,375 ÷ 365 (Daily tax) x 17 days = $64.04 debited to buyer since the seller already paid the property tax

798. If the commission on the sale is $4,599, and the broker charged 7%, what was the sales price? a. $32,193.00 b. $42,770.70 c. $49,451.61 d. $65,700.00 Reference: Ch. 11, Listing Contracts, Calculating a Brokerage Commission

d. $65,700.00 Sale price x 0.07 = $4,599 (Commission), so Sale price = $4,599 ÷ 0.07 = $65,700

461. The city tax rate is 8 3/4 mills, the county rate is 9½ mills and the school board rate is 7¾ mills. If the property is assessed at $50,000 and enjoys a homestead exemption, how much would the taxes be for the year? a. $1,300 b. $1,170 c. $780 d. $650 Reference: Ch. 18, Calculating a Real Estate Tax Levy

d. $650 Total mills = 8.75 + 9.5 + 7.75 = 26; Total tax liability = $50,000 x .026 = $1,300; Deduction for basic exemption = $25,000 x .026 = $650; Taxes = $1,300 Total tax liability - $650 Deduction = $650

992. An investor developed a PUD. He spent $20,000 per acre for the land, which is divided into the following three uses: x 3/8 of the tract for condominiums x 5/16 of the tract for townhouses x The rest of the tract for singlefamily homes If the portion of the tract used for single-family homes consists of 120 acres, what was the sales price of the entire tract? a. $3,490,909 b. $4,189,091 c. $5,280,000 d. $7,680,000 Math Concept: Use the fractions (in 16ths) for condos and townhomes to find the fraction for singlefamily. Then, use the known number of single-family acres to find the number of acres in each 1/16th. Find the total number of acres and multiply by the price per acre.

d. $7,680,000 3/8 = 6/16; 6/16 condo + 5/16 townhouse + 5/16 single-family = 16/16 (total); Single-family: 5/16 = 120 acres; So each 1/16 part is 120 ÷ 5 = 24 acres; Total acres = 24 acres x 16 parts = 384 total acres; Sales price = 384 total acres x $20,000 per acre = $7,680,000

432. Bob purchased two-fifths interest in joint property for $28,000. What was the total sale price of this property? a. $11,200 b. $35,000 c. $46,666 d. $70,000 Math Concept: Bob's joint interest is 2/5 of the sale price.

d. $70,000 Sale Price x 2/5 = $28,000; 2/5 is 0.4; Sale Price = $28,000 ÷ 0.4 = $70,000

460. Mr. Smith qualifies for homestead exemption. He is a widower and has an additional exemption because he is blind. The county millage rate is 7¾ mills, the city millage rate is 6½ mills, and the school millage rate is 9¼ mills. If his property is assessed at $125,000, how much is his tax bill reduced by exemptions? a. $1,000.00 b. $365.25 c. $611.00 d. $967.25 Reference: Ch. 18, Calculating a Real Estate Tax Levy

d. $967.25 Total mills = 7.75 + 6.5 + 9.25 = 23.5 mills = .0235; Total tax liability = $125,000 Assessed value x .0235 = $2,937.50; Basic exemption = ($25,000 + $500 Widower + $500 Blind) x .0235 = $611; City and county mills = 6.5 + 7.75 = 14.25 mills = .01425; 2nd Exemption = $25,000 x .01425 = $357.25; Total exemptions = $611 Basic exemption + $357.25 2nd Exemption = $967.25

153. A homesteaded property has an assessed value of $249,000. If the county tax rate is seven mills, the city is eight mills and the school board is nine mills, how much does the homestead exemption save the homeowner? a. $25,000 b. $6,000 c. $5,376 d. $975 Reference: Ch. 18, Calculating a Real Estate Tax Levy

d. $975 Basic exemption = $25,000 x .024 = $600; 2nd exemption = $25,000 x .015 = $375; Tax savings = $600 + $375 = $975.

695. Michael has a loan on his house for $75,000. After the first year, he has paid $11,936.36 in interest and $124.26 in principal. After the first year, what portion of his loan is paid off? a. 16.50% b. 2.00% c. 1.65% d. .17% Reference: Ch. 13, Loan Repayment Methods, Amortizing Loan Payments

d. .17% $124.26 (Paid) ÷ $75,000 (Original loan amount) = 0.0016568, which rounds to .17%

684. An option contract is a right to buy a property during a specified period-of-time at a specified price. How many days do you have to redeem an option once it has expired? a. 30 b. 15 c. 10 d. 0 Reference: Ch. 11, Option Contracts

d. 0

852. Electronic fingerprints are mandatory for all real estate sales associate and broker applicants. For how long will the fingerprints be retained? a. Indefinitely b. Until the application is approved c. Two years from the date received d. 12 months from the date received Reference: Ch. 2, Obtaining a Florida Real Estate License, Initial License Application

d. 12 months from the date received

806. How many days does the buyer of a new condominium have to cancel the agreement? a. 3 b. 7 c. 10 d. 15 Reference: Ch. 8, Condominiums, Cooperatives, and Timeshares Condominiums

d. 15

594. According to the Tax Reform Act of 1986, what is the maximum percentage of depreciation that may be taken annually on an office building purchased in 1994? a. 6.67% b. 3.60% c. 3.17% d. 2.56% Reference: Ch. 17, Depreciation

d. 2.56% Office building may be depreciated over 39 years; Maximum percentage of depreciation per year is 100% ÷ 39 = .0256 or 2.56% annually

156. Jack has an income of $85,000 per year, and Patricia, his wife, has an income of $75,000. They have car payments of $540 per month each, credit card payments of $600 and student loan payments of $1,000 per month. The loan they are applying for would have a monthly payment of $3,400. What is the housing expense ratio? a. 53% b. 45% c. 38% d. 26% Reference: Ch. 12, Lender Risk, Income Ratios

d. 26% Housing expense ratio = $3,400 ÷ ($85,000 + $75,000) ÷ 12 = .255 or 26%

95. Fill in the blanks. Conventional lenders usually want the buyer's housing ratio not to exceed ____ and the total obligations ratio not to exceed ______. a. 31%, 43% b. 29%, 41% c. 29%, 36% d. 28%, 36% Reference: Ch. 12, Income Ratios - Conventional

d. 28%, 36%

694. Mr. Jones purchased a home for $95,000, with closing costs of $3,500. The loan-to-value ratio was 80%. If the bank charged $2,280.00 for lender fees, how many points did the lender charge? a. 2.3 points b. 2.4 points c. 2.5 points d. 3.0 points Reference: Ch. 12, Common Mortgage Features, Mortgage Loan Fees

d. 3.0 points Loan amount = $95,000 x 0.80 = $76,000; Loan fee percentage = $2,280 (fee amount) ÷ $76,000 (loan amount) = 0.03 or 3%, which is 3 points.

919. Once a final order is issued, within how many days may a petition for review with the District Court of Appeals be filed? a. 10 b. 15 c. 20 d. 30 Reference: Ch. 6, The Disciplinary Process

d. 30

899. Taxes are $30,000 a year, and gross income is $237,000 a year, with other expenses and reserves of $20,000. If taxes go up 25% and all else remains the same, by what percentage will the net operating income be reduced? a. 25% b. 15% c. 4.2% d. 4.0% Reference: Ch. 16, Income Approach, Direct Capitalization Technique

d. 4.0% Current NOI = $237,000 (PGI) - $50,000 (Taxes + OE + R) = $187,000; Increased tax amount = $30,000 x 1.25 = $37,500; Future NOI = $237,000 (PGI) - $57,500 (Increased taxes + OE + R) = $179,500; Decrease in NOI = $187,000 - $179,500 = $7,500; % reduction = $7,500 ÷ $187,000 = 0.04 or 4%

961. What is the maximum allowable total obligations ratio for an FHA insured loan? a. 28% b. 29% c. 36% d. 43% Reference: Ch. 12, Lender Risk, Total Obligations Ratio

d. 43%

79. What is a title? a. A deed of conveyance b. A legally binding contract c. A piece of paper d. A bundle of ownership rights Reference: Ch. 9, Title, Title to Real Property

d. A bundle of ownership rights

524. What action will occur when the FREC imposes a fine against a licensee, and the individual is unable to pay the fine? a. The DBPR/FREC can force bankruptcy b. The DBPR/FREC will suspend or revoke the license c. They will allow the licensee to pay it when they have the money d. A civil action will be brought to recover, and a judgment awarded Reference: Ch. 6, The Disciplinary Process

d. A civil action will be brought to recover, and a judgment awarded

245. A violation of F.S. 475 can result in any of the following actions, EXCEPT: a. Revocation b. Imprisonment c. Direct denial of compensation d. A fine of $10,000 per offense Reference: Ch. 6, License Law Violations; Criminal Penalties; Range of Penalties

d. A fine of $10,000 per offense

672. Which condition is an example of functional obsolescence? a. High unemployment in an area b. Damage due to infestation of termites c. Plumbing not functioning properly d. A five-bedroom house with one bathroom Reference: Ch. 16, Cost-Depreciation Approach

d. A five-bedroom house with one bathroom

128. What is a contract for deed, or land contract? a. A type of ownership or tenancy b. A legal document that conveys title c. A purchase and sale contract for unimproved land d. A form of owner financing Reference: Ch. 12, Sale of Mortgaged Property, Contract for Deed (Land Contract

d. A form of owner financing

612. Which of the following estates involves ownership of real property? a. A leasehold estate b. A tenancy for years c. A tenancy at will d. A freehold estate Reference: Ch. 8, Estates

d. A freehold estate

12. Who would be exempt from the real estate licensing law? a. An apartment manager in an on-site rental office renting for two years b. A condominium manager leasing units for two years on salary c. A mortgage broker negotiating a lease for one year d. A person who rents mobile home lots Reference: Ch. 2, Individuals Who are Exempt from Licensure

d. A person who rents mobile home lots

3. What does the local planning agency have the authority to approve? a. Building permits b. Deed restrictions c. Escheat actions d. A subdivision plat map Reference: Ch. 19, Authority of the Local Planning Agency

d. A subdivision plat map

644. What is a title plant? a. Where deeds are printed b. A system of records, collected and filed by the names of real property owners c. A system of records, collected and filed according to the names of the title insurance holders d. A system of records, collected and filed by legal descriptions Reference: Ch. 9, Protecting Title, Abstracts

d. A system of records, collected and filed by legal descriptions

193. Robert, a sales associate, has been working with an investor that is looking for single-family properties for income. In order to get preferential treatment, the investor offers a $1,000 finder's fee directly to Robert for each suitable property he finds. This arrangement would be: a. A violation of the civil rights laws b. Acceptable since it is a finder's fee, not a commission c. A violation since finder's fees cannot exceed $50 d. A violation of F.S. 475, because it is not paid through his broker Reference: Ch. 5, Sales Associate's Duties, Compensation

d. A violation of F.S. 475, because it is not paid through his broker

55. Broker Bill has been hired to rent Mrs. Brown's apartment building located in a large college town. Broker Bill quotes lower rents and deposits to females because he has found through experience that they will cause less trouble than males, and females will maintain their apartments in much better condition. This is: a. True and therefore no problem b. A violation of the Civil Rights Act of 1866 c. A violation of the Equal Rental Opportunity Act of 1972 d. A violation of the Fair Housing Act of 1968 Reference: Ch. 7, Federal Fair Housing Laws

d. A violation of the Fair Housing Act of 1968

615. A broker shows a house to a prospect, making a statement that they are going to love the elementary schools. This is a(an): a. Omission statement b. Extravagant statement c. Violation of the fair housing law d. Acceptable statement Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

d. Acceptable statement

516. A listing contract may be terminated in all of the following ways, EXCEPT: a. Cancellation of the contract b. Fulfillment of the contract c. Mutual abandonment of the contract d. Acceptance of an offer on the property Reference: Ch. 11, Termination of a Listing

d. Acceptance of an offer on the property

901. Complete the sentence. A sales associate cannot: a. Change the policies of their employer without consent b. Change the terms and conditions of a sales contract without permission c. Change the terms and conditions of a listing contract without permission d. All of the above Reference: Ch. 5, Sales Associate Duties

d. All of the above

407. Which of the following is equivalent to an acre? a. 1/640 of a section b. 43,560 square feet c. 208.71-foot square parcel d. All of the above Reference: Ch. 10, Common Area Measurements

d. All of the above 208.71 feet x 208.71 feet = 43,560 square feet

1001. After I pass my state exam, I need to: a. Celebrate! b. Pat myself on the back; I've worked hard. c. Sign up to take my post-license course immediately. d. All of the above, in this order. Reference: Ch. 2, Post-License (First Renewal) Requirements

d. All of the above, in this order.

341. A buyer purchases a property with an existing mortgage and assumes personal responsibility for the note. Which term describes this situation? a. An assignment of mortgage b. Novation c. Purchasing subject to a mortgage d. An assumption of mortgage Reference: Ch. 12, Sale of Mortgaged Property

d. An assumption of mortgage

306. Broker Brown gets a listing from Mr. Jones. Broker Brown agrees to advertise, caravan and print material intended to help in the sale of the house. Mr. Jones agrees to pay a commission to Broker Brown no matter who sells the house. Which type of listing is in place? a. An exclusive listing b. An implied listing c. A general agency agreement d. An exclusive right of sale listing Reference: Ch. 11, Types of Listing Contracts

d. An exclusive right of sale listing

545. What type of contract is formed when a buyer calls an agent on the phone wanting to buy a certain property? a. A unilateral contract b. A bilateral contract c. A valid contract d. An unenforceable contract Reference: Ch. 11, Contracts, Statute of Frauds

d. An unenforceable contract

904. When calculating the housing expense ratio, what do expenses include? a. Annual mortgage payments and federal taxes b. Property taxes and state income taxes c. Property taxes and insurance d. Annual mortgage payments, property taxes and insurance Reference: Ch. 12, Lender Risk, Income Ratios

d. Annual mortgage payments, property taxes and insurance

802. Complete the sentence. An agreement between two parties for the purchase of real estate must be: a. An oral contract b. A parol contract c. An informal contract d. Any of the above Reference: Ch. 11, Contracts

d. Any of the above

527. Which type of property can be purchased with a VA loan? a. An apartment building b. An income-producing investment property c. A commercial property d. Any owner-occupied residence, including condominiums and mobile homes Reference: Ch. 13, VA Guaranteed Loans

d. Any owner-occupied residence, including condominiums and mobile homes

134. When do property taxes in Florida become delinquent? a. April 15 of the following year b. January 1 of the tax year c. April 1 of the tax year d. April 1 of the following year Reference: Ch. 18, Paying the Tax Levy, Delinquent Property Taxes

d. April 1 of the following year

130. Which term refers to the tangible and intangible resources of a business? a. Liabilities b. Net worth c. Owner's equity d. Assets Reference: Ch. 17, Business Enterprise and Opportunity Brokerage, Accounting Terms

d. Assets

274. A Hispanic buyer asks to see a home in a certain price range. What should a licensee show him? a. Homes in only a predominatelyHispanic area b. Homes in only a predominatelyCaucasian area c. Six homes in each type of area d. Available homes in his price range, regardless of area Reference: Ch. 7, Federal Fair Housing Laws

d. Available homes in his price range, regardless of area

512. All of the following are requirements for obtaining a Florida real estate broker's license, EXCEPT: a. Complete the required broker's prelicensing course b. Have a Social Security number c. Submit the proper application and fees to the Department d. Be employed for at least 12 months in the last five years by an actively licensed broker Reference: Ch. 2, Obtaining a Florida Real Estate License - Broker

d. Be employed for at least 12 months in the last five years by an actively licensed broker

180. The requirements for obtaining a Florida real estate license include all of the following, EXCEPT: a. Passing two exams b. Having a high school diploma or equivalency c. Completing a pre-licensing course d. Being a Florida resident Reference: Ch. 2, Obtaining a Florida Real Estate License

d. Being a Florida resident

975. All of the following are characteristics of the real estate market EXCEPT: a. Being heterogeneous b. Immobility c. Being inelastic in the short run d. Being a standard product Reference: Ch. 15, Characteristics of the Real Estate Market

d. Being a standard product

735. After a transaction fails to close, the buyer and seller make conflicting demands upon the deposit held in escrow by the broker. The broker properly notifies FREC of the dispute. The parties to the contract refuse to resolve the dispute, and the broker elects to settle the matter in court rather than ask the Commission for an escrow disbursement order. If the broker has no interest in collecting a commission, which legal action should be filed? a. Writ of supersedeas b. Bill of declaratory judgment c. Suit for specific performance d. Bill of interpleader Reference: Ch. 5, Escrow Funds, Dispute Settlement Procedures

d. Bill of interpleader

176. Who may be compensated, directly by an owner, for performing any of the eight services of real estate? a. Broker b. Sales associate, if employed by an owner-developer c. Principal d. Both a and b Reference: Ch. 2, Employment, Ch. 5, Sales Associate's Duties, Compensation

d. Both a and b

744. An owner of land offers an open listing to three Florida brokers. The brokers decide to cooperate on the sale and hold an auction as a means of selling. They retain a tobacco auctioneer from North Carolina and pay $1,000 plus expenses to auction off the property. The auction is held, but the owner rejects all offers. Which statement best applies? a. The auctioneer has violated the real estate license law. b. The brokers may have their licenses suspended. c. The owner is compelled to sell. d. Both a and b are correct. Reference: Ch. 2, Activities Requiring a Real Estate License; Ch. 17, Auctioning

d. Both a and b are correct.

240. A broker from Tampa sells a property listed by a Miami broker. At closing, the Miami broker refuses to pay the Tampa broker's share of the commission. Charges are filed by FREC against the Miami broker for failure to account. The Commission has the Miami broker subpoenaed, but the broker fails to appear. The Miami broker: a. Does not have to appear b. May be fined for contempt of court c. Could have license suspended or revoked by FREC d. Both b and c are correct Reference: Ch. 6, The Disciplinary Process

d. Both b and c are correct

23. A real estate broker has entered into a single agency relationship with the sellers of a three-bedroom, twobath house. One of the agents in that broker's office has found an investor wanting to hire the brokerage firm as a single agent. For the investor to be shown this seller's house: a. The broker can work as a dual agent for both the buyer and the seller. b. This would be legal as long as the broker assigns a designated agent for each party. c. The seller must be informed that the brokerage firm is representing the buyer. d. Both the seller and the investor must agree to transition to transaction broker status. Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

d. Both the seller and the investor must agree to transition to transaction broker status.

528. What is an individual referred to as who is fully qualified as a real estate broker, but chooses to work for another employer in the capacity of a sales associate? a. Active broker b. Inactive broker c. Active sales associate d. Broker associate Reference: Ch. 2, Obtaining a Florida Real Estate License, License Categories - Broker Associate

d. Broker associate

582. What is the name for an individual who passes the state broker examination but continues to operate as a sales associate? a. Active broker b. Inactive broker c. Sales associate d. Broker associate Reference: Ch. 2, Obtaining a Florida Real Estate License, License Categories - Broker Associate

d. Broker associate

601. All of the following are services of real estate requiring a license, EXCEPT: a. Showing b. Selling c. Counseling d. Building Reference: Ch. 2, Activities Requiring a Real Estate License, Statutory Services of Real Estate

d. Building

15. All of the following are exempt from F.S. 475, EXCEPT: a. Trustees for an estate b. Personal representatives for an estate c. Mortgage brokers engaged in financing activities d. Business brokers Reference: Ch. 2, Individuals Who are Exempt from Licensure

d. Business brokers

362. What is the function of a secondary lender as opposed to a primary lender? a. Provides money for purchase money mortgages b. Lends money directly to borrowers c. Provides second mortgage financing d. Buys existing mortgages Reference: Ch. 13, The Secondary Mortgage Market

d. Buys existing mortgages

574. How can an easement be extinguished? a. By giving the required notice b. By installing a driveway over the easement c. By an owner no longer using the easement d. By court action Reference: Ch. 9, Private Limitations on Property Ownership

d. By court action

381. The steps in the cost-depreciation approach to estimating market value include all of the following, EXCEPT: a. Finding the current cost to reproduce the building as new b. Finding the land value using comparables c. Subtracting the accrued depreciation from the reproduction cost d. Calculating the net operating income Reference: Ch. 16, Cost-Depreciation Approach

d. Calculating the net operating income

227. Broker A and Broker B are working exclusively for one developer on adjoining projects. They agree to hire a sales associate between them for a half week each. The sales associate: a. Must be licensed to both of them b. Must be licensed with the developer c. Must be registered with both the brokers and the developer d. Cannot have two registered employers Reference: Ch. 2, Employment

d. Cannot have two registered employers

844. Which description best describes an earnest money deposit? a. Cash, securities, or promissory note b. Cash, securities, or personal check c. Specie, securities, or personal check d. Cash, securities, personal check, or any medium of exchange that can be converted to cash Reference: Ch. 5, Escrow Funds, Earnest Money Deposits

d. Cash, securities, personal check, or any medium of exchange that can be converted to cash

123. All of the following are basic types of depreciation, EXCEPT: a. Physical deterioration b. Functional obsolescence c. External obsolescence d. Component depreciation Reference: Ch. 16, Three Approa

d. Component depreciation

933. When two or more people scheme to defraud someone, of what are they guilty? a. Concealment b. Culpable negligence c. Misrepresentation d. Conspiracy Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

d. Conspiracy

745. Which of the following is a required characteristic of a broker's office sign? a. Be a billboard on the roof which can be seen from I-95 b. Have letters at least two inches in height, if an interior sign c. Contain the names of the sales associates and the words "We Aim to Please" d. Contain the name as on the broker's license and the words "Licensed (Lic.) Real Estate Broker" Reference: Ch. 5, Brokerage Office Requirements, Office Signs

d. Contain the name as on the broker's license and the words "Licensed (Lic.) Real Estate Broker"

419. When a property owner does not agree with his tax assessment, what is the proper order for a review? a. Value adjustment board, county tax assessor, circuit court b. Circuit court, county tax assessor, value adjustment board c. County tax assessor, circuit court, value adjustment board d. County tax assessor, value adjustment board, circuit court Reference: Ch. 18, Protesting the Tax Assessment

d. County tax assessor, value adjustment board, circuit court

162. A real estate closing for a duplex is scheduled for September 7, with the day of closing charged to the buyer. Monthly rent is $1,300 per unit. Which closing statement entry is correct? a. Debit the buyer $520.00 b. Credit the buyer $520.00 c. Debit the buyer $2,080.00 d. Credit the buyer $2,080.00 Reference: Ch. 14, Section 2, Prorating Rent

d. Credit the buyer $2,080.00 # Buyer days = 30 - 6 = 24 days; Buyer's portion = $1,300 ÷ 30 days (Daily rent) x 24 (# Buyer days) x 2 units = $2,080

685. A broker receives a deposit check on Monday and deposits it in his escrow account the following Monday. The check subsequently is returned with non-sufficient funds (NSF). What fraud has the broker committed? a. Concealment b. Conversion c. Culpable negligence by failing to check to make sure the check was good d. Culpable negligence by failing to deposit the check "immediately" Reference: Ch. 5, Escrow Funds, Depositing Escrow Funds; Ch. 6, Administrative Penalties, Fraudulent Activities

d. Culpable negligence by failing to deposit the check "immediately"

115. What would the Federal Reserve do when it wants to increase the supply of loanable funds? a. Sell government securities b. Increase the reserve requirement c. Increase the discount rate d. Decrease the reserve requirement Reference: Ch. 13, Federal Reserve System

d. Decrease the reserve requirement

585. A previous owner, upon selling a property, specifically required the buyer to use the property for only one purpose. What type of restriction is this? a. Seller's lien b. Estoppel agreement c. Subdivision restrictive covenant d. Deed restriction Reference: Ch. 9, Limitations on Property Ownership, Private Limitations on Property Ownership

d. Deed restriction

118. What may the lender request the court to grant when there is a foreclosure and the auction sale does not provide enough proceeds to pay the entire mortgage debt? a. Estoppel judgment b. Novation judgment c. Satisfaction judgment d. Deficiency judgment Reference: Ch. 12, Default, Foreclosure Process

d. Deficiency judgment

974. Residential zoning restrictions are designed to regulate which of the following? a. Intensity of land use b. Economic development c. Environmental abuse d. Density of structures per acre Reference: Ch. 19, Zoning Classifications - Residential Zoning

d. Density of structures per acre

342. Complete the sentence. The maximum loan permissible for a VA loan is: a. $104,250 b. Determined by location c. Determined by the VA d. Determined by individual lenders Reference: Ch. 13, VA Guaranteed Loans

d. Determined by individual lenders

469. What would you expect to see on a broker's reconciliation section of the closing statement? a. Disbursements equal the receipts, minus the brokerage fee b. Broker's fee is prepaid by the buyer c. Disbursements equal receipts plus brokerage d. Disbursements equal receipts Reference: Ch. 14, Section 5 - Broker's Statement

d. Disbursements equal receipts

28. Which duty does a broker owe to a customer? a. Full disclosure b. Avoid adverse interests c. Obedience d. Disclose known facts affecting the value of residential property Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

d. Disclose known facts affecting the value of residential property

111. Which term refers to the interest that is charged when banks borrow from the Federal Reserve? a. Prime rate b. Discount points c. Usury rate d. Discount rate Reference: Ch. 13, Federal Reserve System

d. Discount rate

863. What is it called when investors put their money directly into real estate instead of into financial institutions? a. Estoppel b. Leverage c. Intermediation d. Disintermediation Reference: Ch. 13, Money in the Marketplace

d. Disintermediation

712. If a broker is suspended, who can the broker appeal the final order to? a. DBPR b. FREC c. Circuit court d. District Court of Appeals Reference: Ch. 6, The Disciplinary Process

d. District Court of Appeals

488. Ernie is a licensed broker in Chicago who had a customer for a condominium in Tampa. Ernie accompanied the customer to Tampa and introduced him to broker Dora, a licensed Florida broker. Ernie went to the beach while Dora showed the customer condominiums and was successful in obtaining a contract. Ernie returned to Dora's office a short time later and demanded a share of the commission. Which is correct? a. Ernie violated the license law by accompanying the prospect to Florida. b. Both Ernie and Dora are in violation of F.S. 475. c. If Dora pays Ernie a commission, she would be in violation of the license law. d. Dora may pay Ernie a commission. Reference: Ch. 4, Referral Fees

d. Dora may pay Ernie a commission.

402. A line from a POB running N90°E would be best described as a(an): a. North/south line b. North line c. Westbound line d. East/west line Reference: Ch. 10, Surveyor's Method

d. East/west line

395. Under Truth in Lending, "triggering terms" include information regarding all of the following, EXCEPT: a. Amount of down payment required in a credit sale transaction b. Amount of finance charge c. Number of loan payments d. Easy monthly payments Reference: Ch. 13, Laws Regarding Fair Credit and Lending Procedures, Triggering Terms

d. Easy monthly payments

83. If an owner dies intestate with no known heirs, how can the state take the property? a. Elective share b. Dower rights c. Eminent domain d. Escheat Reference: Ch. 9, Methods of Acquiring Title, Transfer by Involuntary Alienation

d. Escheat

270. Who is exempt from provisions of the Fair Housing Act of 1968? a. Sales associates b. Brokers c. Mortgagees d. Homeowners who are selling their only single-family home as a FSBO Reference: Ch. 7, Exemptions to the Civil Rights Act of 196

d. Homeowners who are selling their only single-family home as a FSBO

224. An Illinois corporation is transferring its employees to Florida. The firm retained a Florida broker to find homes for its employees. The attorney representing the Illinois corporation, notifies the Florida broker that in the state of Illinois, an attorney is recognized as a real estate broker. Therefore, the attorney wants a referral fee. What should the Illinois attorney do? a. Produce a certified statement to the Florida broker that Illinois attorneys are recognized as brokers b. Not expect a referral from the Florida broker c. Notify FREC prior to expecting any referral fee d. Expect to receive a referral fee because he is recognized as a broker in Illinois Reference: Ch. 4, Referral Fees

d. Expect to receive a referral fee because he is recognized as a broker in Illinois

383. Which type of depreciation is usually incurable? a. Physical deterioration b. Physical obsolescence c. Functional obsolescence d. External obsolescence Reference: Ch. 16, Cost-Depreciation Approach

d. External obsolescence

851. Which statement is correct regarding the FHA loan program? a. FHA guarantees loans but does not insure them. b. FHA loans are made by HUD. c. FHA determines the interest rates for FHA loans, not the market. d. FHA insures loans but does not guarantee them. Reference: Ch. 13, Types of Mortgages

d. FHA insures loans but does not guarantee them.

13. Which entity provides the best protection for the public during a real estate transaction? a. The National and State Association of REALTORS b. The punishment of licensees dealing dishonestly c. The NAR Code of Ethics d. FREC and the license law Reference: Ch. 2, Purpose of the Law; Ch. 3, The Florida Real Estate Commission

d. FREC and the license law

772. What is the maximum fine that FREC can impose against a licensee found guilty of a first-degree misdemeanor? a. FREC can impose a fine of up to $1,500. b. FREC can impose a fine of up to $3,000. c. FREC imposes only civil fines, not criminal fines. d. FREC imposes only administrative fines, not criminal fines. Reference: Ch. 6, Criminal Penalties; Administrative Penalties

d. FREC imposes only administrative fines, not criminal fines.

497. Broker Tom collected a commission, a portion of which was due to sales associate Dave. Tom did not pay Dave his share of the commission. What could Tom be charged with? a. Larceny b. Commingling c. Embezzlement d. Failure to account Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

d. Failure to account

50. What charge may be filed against a broker who fails to pay their sales associate? a. Culpable negligence b. Concealment c. Commingling d. Failure to account Reference: Ch. 6, Fraudulent Activities

d. Failure to account

228. Unless exempt, performing a service of real estate for someone else for compensation in Florida without an active license is considered to be which of the following criminal violations? a. Misdemeanor of the first degree b. Misdemeanor of the second degree c. Felony of the first degree d. Felony of the third degree Reference: Ch. 6, Criminal Penalties

d. Felony of the third degree

842. What must a broker do in order to open a brokerage firm under a trade name? a. File the name of the corporation b. Register all officers, but not directors c. File the name with the Department of Commerce d. File the name with the Division of Real Estate Reference: Ch. 5, Types of Business Formations, Fictitious (or Trade) Names Act

d. File the name with the Division of Real Estate

25. What should a sales associate do if his employing broker instructs him not to show properties to people of a certain race? a. Ignore the broker's instruction b. Follow the broker's instruction c. Ask the broker to put the instruction in writing d. Find a new employer Reference: Ch. 7, Federal Fair Housing Laws

d. Find a new employer

581. A licensee who has been voluntarily inactive for five years wishes to become active. What must the licensee do? a. Complete14 hours for each year of inactivity b. Complete 45 hours of post-licensing c. Must take the FREC I course and state exam again because five years is too long d. Find an employer and file a change of status form Reference: Ch. 3, Active and Inactive License Status, Inactive License - Voluntary Inactive

d. Find an employer and file a change of status form

17. Complete the sentence. General partners in a brokerage partnership that are not qualified to perform the services of real estate must be registered: a. As inactive sales associates b. As ostensible partners c. As inactive broker associates d. For identification purposes Reference: Ch. 5, Types of Business Formations

d. For identification purposes

634. Which clause in a deed contains the grantor's name and the legal description? a. Habendum clause b. Tenendum clause c. Defeasance clause d. Granting or premises clause Reference: Ch. 9, Deeds, Clauses in Deeds

d. Granting or premises clause

801. Which deed would be considered a special-purpose deed? a. Warranty deed b. Quitclaim deed c. Deed of trust d. Guardian's deed Reference: Ch. 9, Deeds, Types of Deeds

d. Guardian's deed

213. To help his customers sell their property a mortgage broker agrees to hold an open house and prepares an offer to purchase on a standard contract for a fee of $250. Which statement is correct? a. He is exempt from real estate licensure if the property owners requested this service. b. He is exempt from the real estate license law because he is a mortgage broker. c. He is exempt from the real estate license law because he used a standard contract. d. He is guilty of a third-degree felony. Reference: Ch. 2, Persons Who are Required to be Licensed; Ch. 6, Criminal Penalties

d. He is guilty of a third-degree felony

780. What is another name for a tenancy for years? a. Joint tenancy b. Tenancy in common c. Tenancy in the entireties d. Leasehold estate Reference: Ch. 8, Estates

d. Leasehold estate

233. A discount broker has opened an office in town. Two sales associates from full-price, full-service offices agree not to show the discount broker's listings. This practice is: a. Illegal because it constitutes discrimination against the discount broker b. Acceptable because sales associates may show any properties they choose c. Required because discount brokerage is illegal d. Illegal because it constitutes price fixing among the sales associates. Reference: Ch. 4, Broker's Right to Compensation, Uniform Commission Rates

d. Illegal because it constitutes price fixing among the sales associates.

519. For violating F.S. 475, the Commission may discipline with all of the following penalties, EXCEPT: a. Sanction or probation b. Invoke forfeiture c. Impose a fine d. Impose a prison sentence Reference: Ch. 6, License Law Violations

d. Impose a prison sentence

335. In the process of mortgage underwriting (qualifying), which is of most concern to the lender? a. Assets b. Credit history c. Deductions d. Income Reference: Ch. 12, Lender Risk

d. Income

701. What approach is most often used for the valuation of a business? a. Comparable sales approach b. Cost-depreciation approach c. Market approach d. Income approach Reference: Ch. 16, Three Approaches to Value

d. Income approach

700. A house rents for $350 per month in an area where the GRM is 134. A similar home next door just sold for $55,000. On this basis, the rent could be: a. Decreased by $119 b. Increased by $119 c. Decreased by $60 d. Increased by $60 Reference: Ch. 16, Income Approach, Gross Multiplier Technique

d. Increased by $60 Gross monthly rent x 134 (GRM) = $55,000 (Value), so Gross monthly rent = $55,000 ÷ 134 = $410.45, which is higher than current rent; $410.45 - $350 = $60.45, which is about $60.

97. What does the FHA do with respect to mortgage lending? a. Purchases existing loans b. Makes loans c. Guarantees loans d. Insures loans Reference: Ch. 13, Types of Mortgages

d. Insures loans

20. What is the status of a sales associate's license if the sales associate works for a broker, and that broker loses his license? a. Unaffected b. Suspended c. Revoked d. Involuntary inactive Reference: Ch. 3, Void and Ineffective Licenses

d. Involuntary inactive

47. Complete the sentence. The Florida Real Estate Recovery Fund: a. Is replenished from state taxes if needed b. Covers punitive damages c. Is to protect licensees d. Is funded from licensing fees Reference: Ch. 6, Florida Real Estate Recovery Fund

d. Is funded from licensing fees

584. Which method might the county use to enforce building codes? a. Issuing nonconforming use certificates b. Issuing of variances c. Issuing of special exception d. Issuing certificates of occupancy Reference: Ch. 19, Building Codes

d. Issuing certificates of occupancy

372. All of the following statements apply to an estoppel certificate, EXCEPT: a. It may also be called a letter of estoppel. b. It is used to confirm that a lien or obligation exists. c. It is used to confirm the outstanding loan balance as of a given date. d. It forms a lien against the property. Reference: Ch. 12, Sale of Mortgaged Property - Verification of a Loan Balance

d. It forms a lien against the property.

754. After negotiating all terms of a contract with a seller, a buyer signs the contract and then makes a minor change in the terms and conditions before it is presented to the seller for signatures. What is the status of the offer? a. It is now void. b. It is still in effect. c. It is now executed. d. It is now a counteroffer. Reference: Ch. 11, Contract Negotiation

d. It is now a counteroffer.

508. What was the major impact of the Jones v. Mayer Supreme Court case in 1968? a. It protected borrowers from fraudulent lending practices. b. It added handicap and familial status to the list of protected classes. c. It created the USPAP standards for appraisal. d. It strictly prohibited discrimination based on race, with no exceptions. Reference: Ch. 7, Federal Fair Housing Laws

d. It strictly prohibited discrimination based on race, with no exceptions.

722. Mr. and Mrs. Jones, and Mr. Jones's sister, take title to a duplex together. What type of tenancy have they formed? a. Tenancy by the entireties b. Tenancy at will c. Tenancy at sufferance d. Joint tenancy Reference: Ch. 8, Estates

d. Joint tenancy

520. Before Smith dies, Jones is made executor. If Jones wants to actively participate in the sale of Smith's property and be compensated for the efforts. Which statement is correct? a. Jones must become a licensed real estate sales associate. b. Jones must become a licensed real estate broker. c. Jones must hire the services of a licensed real estate broker. d. Jones may sell Smith's property without a real estate license. Reference: Ch. 2, Individuals Who are Exempt from Licensure

d. Jones may sell Smith's property without a real estate license.

397. Depreciation can be taken on all of the following, EXCEPT: a. An office building b. A warehouse building c. A garage d. Land Reference: Ch. 17, Depreciation

d. Land

56. Which is correct according to the Florida Landlord and Tenant Act? a. Deposits may be held in an interestbearing account, and the landlord keeps the interest. b. Deposits may not be held in a noninterest-bearing account. c. Deposits may be commingled into the landlord's personal account, provided the landlord has posted a surety bond with a notary public. d. Landlord must inform tenant within 30 days how the deposit is being held. Reference: Ch. 7, Florida Landlord and Tenant Act

d. Landlord must inform tenant within 30 days how the deposit is being held.

872. A sales associate leaves a broker's office and takes an original copy of a document from the broker's records. What is this action considered to be? a. Bad faith b. Legal c. Extremely stupid d. Larceny Reference: Ch. 5, Sales Associate's Duties, Change of Employer or Address

d. Larceny

547. All of the following are requirements for obtaining continuing education credit by attending a FREC meeting, EXCEPT: a. Licensees must obtain prior approval before attending and obtaining credit. b. Licensees must attend the entire first day of the meeting to obtain credit. c. Licensees may obtain three hours continuing education credit each renewal period. d. Licensees may obtain credit by attending any three hours of the meeting. Reference: Ch. 3, Meetings of the Commission

d. Licensees may obtain credit by attending any three hours of the meeting.

668. Which business structure incorporates limited as well as unlimited liability? a. Sole proprietorship b. Corporation for profit c. General partnership d. Limited partnership Reference: Ch. 5, Types of Business Formations

d. Limited partnership

836. Which of the following business structures incorporates limited as well as unlimited liability? a. Sole proprietorship b. General partnership c. Corporation d. Limited partnership Reference: Ch. 5, Types of Business Formations

d. Limited partnership

546. What relationship does a transaction broker have with their employer? a. Nonrepresentation b. Caveat emptor c. Full fiduciary d. Limited representation Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

d. Limited representation

764. Complete the sentence. Discount points that are charged by lenders are a percentage of the: a. Borrower's equity b. Real estate commission c. Sale price d. Loan amount Reference: Ch. 12, Mortgage Loan Fees - Discount Points

d. Loan amount

323. Which entity would an owner approach when seeking to subdivide their land? a. Florida Real Estate Commission b. Division of Florida Land Sales c. Department of Housing and Urban Development d. Local planning board or the appropriate government agency Reference: Ch. 19, Zoning Board of Adjustment

d. Local planning board or the appropriate government agency

873. A broker has an office at 250 North Orange Ave., Orlando, in the Citrus Bank Building. The bank must make extensive repairs, and the broker moves to 244 Orange Blossom Trail, Orlando. What should the broker do? a. Apply to the Department for an initial issue b. Notify the Department by registered mail of this change c. Write the new address in ink on his license d. Make application on the proper form, attach no fee, make a copy of the current license and forward them to the Department for a reissue Reference: Ch. 5, Brokerage Office Requirements, Branch Office Requirements

d. Make application on the proper form, attach no fee, make a copy of the current license and forward them to the Department for a reissue

827. Which appraisal approach would carry the most weight in the appraiser's final decision when appraising a vacant lot? a. Building residual approach b. Income capitalization approach c. Cost-depreciation approach d. Market or sales comparison approach Reference: Ch. 16, Three Approaches to Value

d. Market or sales comparison approach

491. Broker A has an exclusive agency listing on Mary's property. Broker B showed Mary's home to a customer and succeeded in obtaining a full price contract that Mary accepted. Mary paid broker B a commission. Which is correct? a. Mary owes a commission to broker A. b. Broker B must share the commission with broker A. c. Mary owes both brokers a commission. d. Mary is liable to broker A for damages. Reference: Ch. 11, Listing Contracts, Types of Listing Contracts - Exclusive Agency Listing

d. Mary is liable to broker A for damages.

713. Complete the statement. Members of the FREC Probable Cause Panel: a. Must be real estate licensee members b. Must be consumer members c. Must be broker members d. May be licensed or consumer members Reference: Ch. 6, The Disciplinary Process

d. May be licensed or consumer members

862. In a lien-theory state, what is the ownership status of the mortgagee? a. Mortgagee has the right of possession. b. Mortgagee has the right to any rents collected. c. Mortgagee acquires ownership "automatically" upon default by the mortgagor. d. Mortgagee holds a lien on the property. Reference: Ch. 12, Mortgage Theories, and Documents Related to Loans, Lien Theory of Mortgages

d. Mortgagee holds a lien on the property.

536. Mrs. X appoints Mrs. Y to sell her house in the event that she dies. Which statement applies? a. Mrs. X needs a sales associate license. b. Mrs. Y needs a sales associate license. c. Mrs. Y needs a broker license. d. Mrs. Y can sell the estate without a real estate license. Reference: Ch. 2, Individuals Who are Exempt from Licensure

d. Mrs. Y can sell the estate without a real estate license.

411. Which legal descriptions would equal five acres? a. E 1/2, SE 1/4, NW 1/4, Section 24 b. SE 1/4, SE 1/4, NW 1/4, Section 24 c. N 1/2, SE 1/4, SE 1/4, Section 24 d. N 1/2, SE 1/4, SE 1/4, NW 1/4, Section 24 Reference: Ch. 10, Calculating Acreage in a Parcel from a Legal Description

d. N 1/2, SE 1/4, SE 1/4, NW 1/4, Section 24 640 ÷ 2 ÷ 4 ÷ 4 ÷ 4 = 5 acres

179. Owner A and friend B meet on the street. A says, "I would like to sell my house." B takes the information and says, "I'll find you a buyer; I've done it several times for our friends." B finds a buyer for A's house, and the transaction is closed. Based on the above facts, which of the following applies? a. A has violated F.S. 475 b. B has violated F.S. 475 c. Both A and B have violated F.S. 475 d. Neither have violated F.S. 475 Reference: Ch. 2, Persons Who are Required to be Licensed

d. Neither have violated F.S. 475

966. Which of the following would be the proper formula for the capitalization rate? a. Purchase price divided by the net operating income b. Effective gross income divided by the sales price c. Net operating income divided by the original equity investment d. Net operating income divided by the total sales price Reference: Ch. 16, Income Approach, Direct Capitalization Technique

d. Net operating income divided by the total sales price

778. Which type of loan, also known as a sub-prime loan, is offered to borrowers who do not qualify for loans underwritten using certain criteria and standards established by Fannie Mae and Freddie Mac? a. VA guaranteed loan b. Conventional loan c. Conforming loan d. Nonconforming loan Reference: Ch. 13, The Secondary Mortgage Market

d. Nonconforming loan

140. A convenience store existed at a location prior to zoning law changes that would have disallowed it. Under which type of exception can the store remain? a. Hardship exception b. Special use exception c. Variance d. Nonconforming use Reference: Ch. 19, Zoning Board of Adjustment

d. Nonconforming use

265. Which phrase would be legal to use in advertising property? a. Minority neighborhood b. Integrated neighborhood c. Caucasian neighborhood d. None of the above Reference: Ch. 7, Federal Fair Housing Act

d. None of the above

249. A sales associate has a fight with a seller and hits the seller on the head with a canoe paddle. What penalty will the Commission administer on the sales associate? a. Suspend the canoe paddle for 30 days b. Revoke the sales associate's license c. Suspend the sales associate's license indefinitely d. None, since assault and battery is not a violation of F.S. 475 Reference: Ch. 6, License Law Violations; Criminal Penalties

d. None, since assault and battery is not a violation of F.S. 475

307. What is the most likely consequence for a broker who negotiates a contract for the sale of a house between the owner and purchaser in violation of the statute off frauds? a. Have their registration suspended b. Have their registration revoked c. Lose their commission on the sale d. Not be disciplined Reference: Ch. 11, Statute of Frauds

d. Not be disciplined

92. The essential elements of a contract include all of the following, EXCEPT: a. Consideration b. Offer and acceptance c. Competent parties d. Notarized Reference: Ch. 11, Essentials of a Valid Contract

d. Notarized

563. Paul is a captain in the Air Force. While stationed in Florida, Paul obtained a real estate license. Shortly thereafter, Captain Paul was transferred to Oklahoma. Five years later, he retires and returns to Florida where he wishes to sell real estate. Which statement applies? a. Paul would be required to take the state licensing exam again. b. Paul would be required to take the 45-hour post-license course. c. Paul would be required to take 28 hours of reactivation education. d. Paul can request a reissue of his license within two years of his discharge. Reference: Ch. 2, Obtaining a Florida Real Estate License, Members of the Armed Forces

d. Paul can request a reissue of his license within two years of his discharge.

511. A broker was convicted of securities fraud also causing FREC to revoke his license. If he is the only broker in a sole proprietorship, what would the license status become of the sales associates registered under him? a. Revoked b. Suspended c. Cancelled d. Placed involuntary inactive Reference: Ch. 3, Active and Inactive License Status, Void and Ineffective Licenses; Ch. 5, Sole Proprietorship

d. Placed involuntary inactive

132. John has the opportunity to invest in a property with a 9% return. He can borrow the money at an interest rate of 7%. Which investment characteristic exists? a. Liquidity b. Negative leverage c. Neutral leverage d. Positive leverage Reference: Ch. 17, Real Estate Investment Terminolog

d. Positive leverage

272. A tenant is two months delinquent on the rent. What is the first step available to the landlord to remedy the situation? a. Disconnect the utilities b. Ask the sheriff to evict the tenant c. Ask the court for a writ of possession d. Post a three-day notice to pay the rent or vacate Reference: Ch. 7, Landlord-Tenant Relationships

d. Post a three-day notice to pay the rent or vacate

127. What is the name for the annual income that an investment property could make with no vacancies or collection losses? a. Annuity gross income b. Effective gross income c. Net operating income d. Potential gross income Reference: Ch. 17, Evaluating Investment Properties

d. Potential gross income

501. A broker has a listing on a seller's house. The seller goes on vacation. During this time, the broker gets an offer for $78,000 and another offer for $80,000. What should the broker do? a. Present the $80,000 offer upon seller's return b. Accept the $80,000 offer on behalf of the seller c. Reject the $78,000 offer d. Present both offers upon the seller's return Reference: Ch. 4, Authorized Real Estate Brokerage Relationships, Presenting Offers

d. Present both offers upon the seller's return

1. In which area of brokerage has absentee ownership increased the demand? a. Business opportunity brokerage b. Commercial sales c. Agricultural sales d. Property management Reference: Ch. 1, Specialization within the Real Estate Profession

d. Property management

71. How is the right to occupy a cooperative evidenced? a. Tenancy in common b. Joint tenancy c. Deed d. Proprietary lease Reference: Ch. 8, Cooperative Association

d. Proprietary lease

887. Broker Warmington assigns sales associate Smith to work exclusively on Bennett's development. Which statement applies? a. Broker Warmington can lend Smith to Bennett with no problem. b. Smith is no longer accountable to Warmington because she is now working for herself. c. Smith is allowed to work for as many employers as she feels she can handle. d. Provided Warmington is the listing broker at Bennett's development, and all commissions paid to Smith come from Warmington, there is no problem. Reference: Ch. 2, Employment

d. Provided Warmington is the listing broker at Bennett's development, and all commissions paid to Smith come from Warmington, there is no problem

856. Which of the following applies to the FHA Section 203(b) loan program? a. Guarantees loan approval b. Applies only to borrowers that meet certain income limits c. Does not require payment of mortgage insurance premiums d. Provides mortgage insurance coverage of owner-occupied one-tofour family homes Reference: Ch. 13, Types of Mortgages, FHA Insured Mortgage Loans

d. Provides mortgage insurance coverage of owner-occupied one-tofour family homes

103. Which type of mortgage is known as seller financing? a. Package mortgage b. Term mortgage c. Second mortgage d. Purchase money mortgage Reference: Ch. 13, Types of Mortgages

d. Purchase money mortgage

7. Which power authorizes the FREC to pass or revise rules? a. Ministerial powers b. Quasi-executive c. Quasi-judicial d. Quasi-legislative Reference: Ch. 3, The FREC, Powers of the Commission

d. Quasi-legislative

619. Hewitt, a wealthy landowner, wishes to donate a large tract of land to his university alma mater. Hewitt does not want to be responsible for any claims. What type of deed will Hewitt probably use? a. Bargain and sale deed b. Special warranty deed c. General warranty deed d. Quitclaim deed Reference: Ch. 9, Deeds, Types of Deeds

d. Quitclaim deed

82. Which deed contains no warrants or promises? a. General warranty deed b. Bargain and sale deed c. Special warranty deed d. Quitclaim deed Reference: Ch. 9, Types of Deeds

d. Quitclaim deed

52. What law requires that buyers be given a good faith estimate of closing costs prior to closing? a. Florida Statute 475 b. Truth-in-Lending Act c. Sherman/Clayton Antitrust Act d. RESPA Reference: Ch. 13, Laws Regarding Fair Credit and Lending Procedures

d. RESPA

523. Sally is a licensed real estate broker in a state that has a mutual recognition agreement with Florida. Sally wishes to obtain a Florida license. Her choices include all of the following, EXCEPT: a. Taking a 40-question law exam and be issued a Florida broker license by mutual recognition if she is not a Florida resident b. Taking the broker course and state exam if she is a Florida resident c. Taking the sales associate course and state exam if she wishes to become a Florida sales associate d. Receiving a Florida license by reciprocity if she is not a Florida resident Reference: Ch. 2, Obtaining a Florida Real Estate License, Obtaining a License by Mutual Recognition

d. Receiving a Florida license by reciprocity if she is not a Florida resident

878. A customer requested that a broker locate a rental for $500 per month. The broker requested $200 in an upfront fee from the customer to pay for time and effort while locating this type of property. The broker was able only to find a unit renting for $600 per month. What must the broker do? a. Keep 75% of the $200 b. Keep 25% of the $200 c. Keep the $200 d. Refund the $200 to the customer Reference: Ch. 5, Rental Information

d. Refund the $200 to the customer

818. Able, Baker, and Charlie are officers in ABC Realty, Inc. Able and Baker are actively involved in brokerage, while Charlie attends only the quarterly meetings. What are the minimum requirements for Charlie? a. Sales associate b. Broker c. Active broker d. Registered Reference: Ch. 8, Types of Business Formations, Real Estate Brokerage Corporation

d. Registered

359. Which type of mortgage allows a homeowner, age 62 or older, to receive a lump sum or monthly advance based on the equity in their home? a. HELOC b. Home equity loan c. Purchase money mortgage d. Reverse mortgage Reference: Ch. 13, Loan Repayment Methods

d. Reverse mortgage

78. What is the purpose of a title search? a. Locate all important documents for a closing b. Issue title insurance c. Give constructive notice d. Run a chain of title Reference: Ch. 9, Protecting Title

d. Run a chain of title

759. An office policy manual typically contains all of the following, EXCEPT: a. Commission splits b. Office procedures c. Telephone usage d. Salary ranges for independent contractors Reference: Ch. 4, Policy and Procedures Manual

d. Salary ranges for independent contractors

423. To which of the following entities do real estate taxes provide revenue? a. Local, state, and federal governments b. City, county, and state governments c. City and county governments d. School boards, city, and county governments Reference: Ch. 18, Purpose and Use of Real Estate Taxes

d. School boards, city, and county governments

255. A licensee files a false affidavit to make a claim against a property. How is this criminal action classified? a. First-degree felony b. Second-degree felony c. First-degree misdemeanor d. Second-degree misdemeanor Reference: Ch. 6, Criminal Penalties

d. Second-degree misdemeanor

859. Which clause in a deed states that the seller is in possession of the property and has the legal right to convey the property? a. Granting b. Receivership c. Further assurance d. Seisin Reference: Ch. 9, Clauses in Deeds

d. Seisin

650. An owner employed a broker to sell his property. The broker subsequently negotiated a contract whereby the owner agreed to sell to a buyer. The contract was long and involved. Since the amount of the deposit was equal to the amount of the commission that the broker would receive, in the middle of one of the long paragraphs, the broker inserted the phrase, "in the event the buyer defaults, the deposit will be retained by the broker as his compensation." At the time the broker presented the contract to the seller and buyer he made no mention of this phrase. However, he did not in any way try to influence them not to read it. The seller and buyer signed the contract without reading it. In their area, a 50/50 split of defaulted deposits is customary between sellers and brokers. The buyer subsequently defaulted, and the seller asked the broker for half of the deposit. The broker refused and showed the seller the phrase in the contract that allowed him to retain the deposit. What should the broker do? a. Give the seller an amount equal to his expenses and keep the rest b. Share the deposit 50/50 with the buyer c. Retain all of the deposit since the buyer and seller signed the contract d. Share the deposit 50/50 with the seller Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

d. Share the deposit 50/50 with the seller

680. Sales associate Sally decides to use a post office box for all of her mail even though she has not actually moved out of her house. Which statement applies? a. She need not notify the Department since she is living at the same location. b. She need not notify the Department if her e-mail address has not changed. c. She must notify the Department of her address change within 30 days. d. She must notify the Department of her address change within ten days. Reference: Ch. 5, Sales Associate's Duties, Change of Employer or Address

d. She must notify the Department of her address change within ten days.

311. Which statement is correct regarding a lease agreement for 12 months or less? a. Must be in writing to be valid (enforceable) b. Must be in writing to benefit the lessee c. Must be in writing to benefit the lessor d. Should be in writing to avoid misunderstanding Reference: Ch. 11, Statute of Frauds

d. Should be in writing to avoid misunderstanding

510. A sales associate must do all the following to renew a current and valid license, EXCEPT: a. Complete 14 hours of continuing education, for renewal periods after the first renewal b. Complete the proper renewal request form and pay the required fee c. Pass a 45-hour post-licensing course, if renewing for the first time d. Show Florida residency Reference: Ch. 2, Renewing a Florida Real Estate License; Ch. 3, Licensing Periods, Renewal

d. Show Florida residency

608. A broker is in a full representation relationship with a principal. What is the name for this relationship? a. General agency b. Transactional brokerage c. Dual agency d. Single agency Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

d. Single agency

398. To which type of transaction does Regulation Z apply? a. Single-family home used for rental income b. Building used for a gas station c. Vacant land used for a parking lot d. Single-family home used as residence Reference: Ch. 13, Laws Regarding Fair Credit and Lending Procedures, Truth-in-Lending Act

d. Single-family home used as residence

291. Which type of deed warrants title only against claims made by the grantor, their heirs, assignees, executors, administrators, or others who represent them? a. Specific warranty deed b. General warranty deed c. Quitclaim deed d. Special warranty deed Reference: Ch. 9, Types of Deeds

d. Special warranty deed

365. For which of the following are Fannie Mae and Freddie Mac responsible? a. Offering nonconforming loans b. Finding new sources in the primary mortgage market c. Insuring loans made by approved lenders d. Standardizing lending practices and forms Reference: Ch. 13, The Secondary Mortgage Market

d. Standardizing lending practices and forms

716. All of the following items are typical prorations on a closing statement, EXCEPT: a. Real property taxes b. Interest on assumed loan c. Rent collected d. State documentary stamp taxes Reference: Ch. 14, Section 2 - Prorations and Prepayments; Section 3 - Expenses

d. State documentary stamp taxes

417. Which entity establishes the rates for the documentary stamps? a. DBPR b. FREC c. The county where the property is located d. State of Florida Reference: Ch. 14, Expenses

d. State of Florida

214. A broker's principal is away on vacation. The broker receives an offer of $75,000 for his principal's property. Before the principal returns, the broker receives a second offer of $72,000. What should the broker do? a. Refuse the second offer since it is not as good as the first offer b. Submit the offer they feel is best c. Hold the second offer pending acceptance of the first offer d. Submit both offers to the principal Reference: Ch. 4, Authorized Real Estate Brokerage Relationships, Presenting Offers

d. Submit both offers to the principal

206. If an oral offer is made to a broker on a property the broker has listed, what should be the broker's response? a. Demand that the offer be in writing b. Inform the buyer that the offer violates the statute of frauds c. Ask for a substantial deposit d. Submit the offer to the seller Reference: Ch. 4, Authorized Real Estate Brokerage Relationships, Presenting Offers

d. Submit the offer to the seller

534. What type of writ contains a command to stay a legal proceeding, as in halting or delaying the suspension or revocation of a real estate licensee's license? a. Certiorari b. Mandamus c. Possession d. Supersedeas Reference: Ch. 6, The Disciplinary Process - Judicial Review

d. Supersedeas

207. If a broker is aware of a construction lien on a piece of property, what should they do? a. Make the buyer aware b. Tell the buyer before the closing c. Not disclose the lien d. Tell the buyer before going to contract Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

d. Tell the buyer before going to contract

66. What type of tenancy exists when a tenant remains in possession of a property after their rights have expired? a. Joint tenancy b. Tenancy by the entireties c. Tenancy at will d. Tenancy at sufferance Reference: Ch. 8, Estates

d. Tenancy at sufferance

773. Which of the following estates contains the least rights? a. Tenancy by the entireties b. Leasehold estate c. Joint tenancy d. Tenancy at sufferance Reference: Ch. 8, Estates

d. Tenancy at sufferance

934. Which tenancy would exist for ownership by a husband and wife? a. Joint tenancy b. Tenancy in common c. Tenancy for years d. Tenancy by the entireties Reference: Ch. 8, Estates

d. Tenancy by the entireties

559. Tom, Brian, and Bill purchase an office building in fee simple. Which form of ownership would Tom's family prefer? a. Tenancy by the entireties b. Joint tenancy c. Tenancy at will d. Tenancy in common Reference: Ch. 8, Estates

d. Tenancy in common

513. Florida real estate law requires that the buyer be informed of all of the following, EXCEPT: a. If they are required to join a homeowner's association b. That they have the right to have an energy-efficiency rating performed c. That they are allowed to test for radon gas d. That the seller is HIV-positive Reference: Ch. 7, Florida Fair Housing Act; Ch. 11, Disclosures Required in Real Estate Contracts

d. That the seller is HIV-positive

500. All of the following statements are correct regarding the Consumer Credit Protection Act, EXCEPT: a. The Act was designed to give borrowers the ability to shop wisely for credit. b. Borrowers must be shown the actual amount paid for credit in a percentage form called the annual percentage rate (APR). c. Borrowers must be given three working days to rescind a loan. d. The Act was implemented by the Board of Governors of the Federal Reserve System through Regulation B. Reference: Ch. 13, Laws Regarding Fair Credit and Lending Procedures, Truth-in-Lending Act

d. The Act was implemented by the Board of Governors of the Federal Reserve System through Regulation B.

575. Real estate brokerage commissions are based on which of the following? a. MLS rule b. Custom c. The seller's equity d. The actual sales price Reference: Ch. 4, Broker's Right to Compensation, Payment of Commission

d. The actual sales price

477. All of the following statements are correct with respect to a broker registered with a real estate brokerage corporation, EXCEPT: a. The broker may be a stockholder. b. The broker has to be an officer or director. c. The broker does not have to be a resident of Florida or a citizen of the United States. d. The broker can be an active broker and officer in one corporation and an inactive broker in another corporation. Reference: Ch. 5, Real Estate Brokerage Corporation

d. The broker can be an active broker and officer in one corporation and an inactive bro

211. Broker Jones takes a listing on a condominium from Mr. Charles. Mr. Charles notifies Jones that the roof leaks. Jones negotiates the sale of the condominium to Smith without disclosing the leak. Smith, a year later, sells the condominium for a profit. Which statement applies? a. This was a legal transaction since it was the buyer's responsibility to check for leaks. b. This would have been an illegal sale if the property had not been sold at a profit. c. The broker would have been liable had the property sold at a loss. d. The broker could be disciplined for concealment. Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

d. The broker could be disciplined for concealment.

550. A sales associate successfully finds a ready, willing, and able buyer for a listing and is entitled to part of a $5,000 commission. Just prior to the closing, it is necessary for the sales associate to go out of town. Upon returning, it was discovered that the employing broker has had a lot of unexpected expenses, and the money is just not available to pay the sales associate. Which statement is correct? a. The sales associate is not entitled to the commission because they missed the closing. b. The broker's priority is keeping the office open; therefore, they have the option of paying the sales associate at a later date. c. The broker may be charged with larceny. d. The broker may be charged with failure to account and deliver. Reference: Ch. 6, Administrative Penalties, Fraudulent Activities

d. The broker may be charged with failure to account and deliver.

489. Which statement is correct regarding a broker acting as a transaction broker? a. The broker has fiduciary duties to both parties. b. The broker has fiduciary duties to the seller, but not to the buyer. c. Both parties must give their prior written consent before the broker may act as a transaction broker. d. The broker must treat both parties with honesty and fairness. Reference: Ch. 4, Authorized Real Estate Brokerage Relationships, Transaction Broker

d. The broker must treat both parties with honesty and fairness.

259. In pursuit of an unpaid commission, a broker hires an attorney to attempt to obtain a judgment lien against the seller. In the course of the action, and on the advice of the attorney, the broker filed a lis pendens against the seller's property. What action may be taken against the broker? a. None, since no violation has occurred b. FREC could fine the broker up to $10,000 c. FREC could impose a criminal penalty d. The broker's license may be suspended or revoked Reference: Ch. 4, Broker's Right to Compensation, Payment of Commission; Ch. 9, Liens, Lis Pendens

d. The broker's license may be suspended or revoked

648. What is the deadline for a broker to deposit all earnest money funds? a. The next business day b. The next calendar day c. The third calendar day d. The close of the third business day following receipt Reference: Ch. 5, Escrow Funds, Depositing Escrow Funds

d. The close of the third business day following receipt

310. A broker accepts a listing that has an unmerchantable title. A sales contract is signed, and a deposit is obtained contingent upon the owner clearing title. At closing, the owner cannot give a clear title. The deposit is returned to the buyer. Which statement applies to this situation? a. The broker is entitled to a full commission. b. The owner can sue the broker and the buyer. c. The buyer can sue the owner. d. The contingency was not met, so the contract is dead. Reference: Ch. 11, Contract Termination

d. The contingency was not met, so the contract is dead.

854. Jack defaulted on his mortgage payments, and the lender instituted foreclosure proceedings. If the foreclosure sale does not bring enough to cover the debt, what is the impact to the lender? a. The lender may seek a cognovits judgment. b. The lender may seek a reconveyance judgment. c. The lender automatically gets ownership of the property. d. The lender may seek a deficiency judgment. Reference: Ch. 12, Default, The Foreclosure Process

d. The lender may seek a deficiency judgment.

146. All of the following are characteristics of real estate, EXCEPT: a. The market is local in nature. b. The market is slow to respond to changes in supply and demand. c. There is no central control over the market. d. The market is homogenous. Reference: Ch. 15, Characteristics of the Real Estate Market

d. The market is homogenous.

830. Concerning the characteristics of real estate, which statement is true? a. A change in demand for real estate in Oregon affects Florida real estate prices. b. A change in demand for real estate in Florida affects Oregon real estate prices. c. It is okay to take advice from an Oregon broker concerning Florida real estate. d. The markets in Florida and Oregon are unrelated, so prices in one have no effect on prices in the other. Reference: Ch. 15, Characteristics of the Real Estate Marke

d. The markets in Florida and Oregon are unrelated, so prices in one have no effect on prices in the other.

105. Which statement is correct in a lientheory state such as Florida? a. The borrower will obtain title only after the loan is paid. b. Foreclosure will take place much quicker than in title theory states. c. The borrower conveys title to the lender using a deed of trust. d. The mortgage serves as a lien against the property. Reference: Ch. 12, Lien Theory of Mortgages

d. The mortgage serves as a lien against the property

643. Sue Douglas wishes to open a real estate brokerage corporation, Sunshine Realty, Inc. When ordering her sign, she is required to include all of the following items, EXCEPT: a. Sunshine Realty, Inc. b. Sue Douglas c. Licensed real estate broker d. The office phone number Reference: Ch. 5, Brokerage Office Requirements, Office Signs

d. The office phone number

656. Which of the following is required in a real estate brokerage limited partnership? a. All officers and directors must be registered. b. All limited partners must be active licensees. c. All general partners must be active licensees. d. The partnership must be registered with the Department. Reference: Ch. 5, Types of Business Formations, Real Estate Brokerage Limited Partnership

d. The partnership must be registered with the Department.

721. A real estate sales associate obtains an offer to lease from a prospective tenant. The agent calls the owner to inform them of the offer. The owner asks the sales associate, "What race is the tenant?" The sales associate responds, "They are Caucasian." Which statement is correct? a. The sales associate responded in a manner consistent with the law. b. The sales associate acted as any licensee should. c. Had the tenant been a minority, the sales associate would be in violation, but because the tenant was Caucasian, there is no violation. d. The sales associate may be subject to severe administrative and civil penalties. Reference: Ch. 7, Federal Fair Housing Laws

d. The sales associate may be subject to severe administrative and civil penalties.

241. A broker has shown by their actions that they are an immediate danger to the public. What can be done? a. The license can be immediately revoked. b. The license can be immediately suspended. c. The chairperson of FREC can issue a writ of supersedeas. d. The secretary of the DBPR can issue a summary suspension. Reference: Ch. 6, The Disciplinary Process

d. The secretary of the DBPR can issue a summary suspension.

422. All of the following statements apply to special assessments, EXCEPT: a. They are charged to the owner of the property. b. They are levied to finance specific improvements. c. They are charged only for improvements that will increase the value of the property. d. They are used to provide revenue for the county's operating budget. Reference: Ch. 18, Special Assessments

d. They are used to provide revenue for the county's operating budget.

183. An owner of a service station who holds an inactive sales associate's license has been appointed by the court to appraise another service station. Which statement is most correct? a. Since they have registration status, that person may be compensated for this service of real estate. b. They must have an active license to be compensated. c. They may be compensated by a licensed broker. d. They may be compensated directly for this service. Reference: Ch. 2, Individuals Who are Exempt from Licensure

d. They may be compensated directly for this service.

742. In the course of listing the seller's house, the sales associate noticed that minor repairs were necessary. The sales associate suggested that the sellers use ABC Contractors, Inc., to handle the repairs. ABC forwarded the sales associate a 10% referral fee. Which statement applies? a. This is common in the industry and therefore legal. b. This is illegal, as the referral fee should have been paid to the broker. c. This is unethical, but legal. d. This is a violation of real estate license law. Reference: Ch. 4, Broker's Right to Compensation, Referral Fees

d. This is a violation of real estate license law.

535. During the week, a sales associate works for XYZ Real Estate, Inc. On the weekends, the sales associate moonlights for an unconnected development company and is paid on a transactional basis. Which statement is correct? a. This is a violation of the Federal Trade Commission law. b. The sales associate may work for both companies. c. This is allowable provided the sales associate obtains a group license. d. This is illegal under the license law. Reference: Ch. 2, Employment; Ch. 5, Sales Associate's Duties, Compensation

d. This is illegal under the license law.

147. What is the purpose of building codes? a. To set standards for the amount of land a building can cover b. To specify the style of building that may be built c. To regulate government properties d. To establish minimum standards of building design and construction Reference: Ch. 19, Building Codes

d. To establish minimum standards of building design and construction

294. Complete the statement. A deed must be acknowledged (notarized): a. Prior to being witnessed b. By an attorney c. To make it valid d. To make it recordable Reference: Ch. 9, Deeds

d. To make it recordable

312. Florida has established three authorized brokerage relationships. Unless otherwise established by agreement, what is the broker's relationship with the public? a. Nonrepresentation b. Single agency c. Dual agency d. Transaction brokerage Reference: Ch. 4, Authorized Real Estate Brokerage Relationships

d. Transaction brokerage

817. To what term does "subleasing" refer? a. Changing a lease termination date b. Adding an addendum to a lease c. Transferring all rights to a property d. Transferring less than all rights to a property Reference: Ch. 9, Leases, Assignment, and Sublease

d. Transferring less than all rights to a property

26. Which form requires the signature of all parties? a. No Brokerage Relationship Notice b. Transaction Broker Notice c. Single Agent Notice d. Transition to Transaction Broker Reference: Ch. 4, Brokerage Relationship Disclosure Act

d. Transition to Transaction Broker

217. Complete the sentence. A fiduciary relationship is one of: a. Trust b. Confidence c. Trust and confidence d. Trust and confidence when accepted Reference: Ch. 4, Authorized Real Estate Brokerage Relationships, Single Agent

d. Trust and confidence when accepted

543. How long may commissioners sit on the Real Estate Commission? a. Only one two-year term b. Only one four-year term c. Two consecutive two-year terms d. Two consecutive four-year terms Reference: Ch. 3, The Florida Real Estate Commission, Term of Office

d. Two consecutive four-year terms

526. Under which condition may a sales associate be employed by two brokers? a. If FREC grants a special exception b. If both employers agree c. If the public agrees d. Under no circumstances Reference: Ch. 2, Employment; Ch. 5, Sales Associate's Duties, Compensation

d. Under no circumstances

725. When may a sales associate take a deposit without his broker's permission? a. When the broker is out of town b. When the buyer insists c. When no lender is involved d. Under no circumstances Reference: Ch. 5, Sales Associate's Duties, General Duties

d. Under no circumstances

874. A prospect steps into a broker's office and tells the broker that they want to buy property in an area called Everglades Estates. The broker informs the prospect that he does not have the property listed, but that he will take the prospect over to meet the owner. The owner tells the broker that he will NOT deal through real estate brokers. The next day, the owner contacts the prospect and a deal results. What may the broker do? a. Collect a commission from the seller as the seller cannot make use of the "fruit of the broker's labor" b. Sue the buyer c. Bring court action against the seller d. Under the circumstances, do nothing Reference: Ch. 11, Listing Contracts

d. Under the circumstances, do nothing

502. In case of a financial hardship due to a zoning requirement, for what should the homeowner apply? a. Nonconforming use b. Special use exception c. Easement d. Variance Reference: Ch. 19, Zoning Board of Adjustment

d. Variance

564. Which covenant in a deed is a warrant by the grantor that they will sign any documents in the future that would be necessary to maintain quiet title? a. Warranty forever b. Warrant of seizing c. Warrant of quiet enjoyment d. Warrant of further assurance Reference: Ch. 9, Deeds, Warrants, or Covenants in Deeds

d. Warrant of further assurance

116. When is intermediation in financial institutions most likely to occur? a. When demand and supply of funds are both decreasing b. When demand and supply of funds are both increasing c. When supply of funds is decreasing, and the demand is increasing d. When supply of funds is increasing, and the demand is decreasing Reference: Ch. 13, Money in the Marketplace

d. When supply of funds is increasing, and the demand is decreasing

833. An involuntarily inactive sales associate sends in a renewal along with the required fee and the change of status form. When will their license be considered active? a. When the sales associate puts the form and fee in the mail b. When the sales associate signs their license c. When the check to the DRE clears the bank d. When the DBPR receives the form and fee Reference: Ch. 3, Licensing Periods, Reissue

d. When the DBPR receives the form and fee

960. When does disintermediation occur? a. When deposits exceed withdrawals b. When withdrawals exceed loans c. When loans exceed deposits d. When withdrawals exceed deposits Reference: Ch. 13, Money in the Marketplace

d. When withdrawals exceed deposits

837. Sales associate Sally sells a home. When must Sally's broker pay her commission? a. Within five days of the closing b. Within ten days of the closing c. At the closing d. Within a reasonable period of time Reference: Ch. 5, Sales Associate's Duties

d. Within a reasonable period of time

659. All of the following are essential elements of a real estate contract, EXCEPT: a. Consideration b. Offer and acceptance c. In writing and signed d. Witnessed and under seal Reference: Ch. 11, Contracts, Elements of a Valid Contrac

d. Witnessed and under seal

557. To determine the potential use for a vacant lot, which entity would you contact? a. Value adjustment board b. Health department c. Building department d. Zoning department Reference: Ch. 19, Zoning, Land Use Restrictions, and Building Codes

d. Zoning department

143. Local planning agencies have the final authority for all of the following, EXCEPT: a. Subdivision plat approval b. Site plan approval c. Sign control d. Zoning variances Reference: Ch. 19, Authority of the Local Planning Agency

d. Zoning variances

178. Jerry was notified that he passed the state sales associate license exam. For which type of employer does his license allow him to perform real estate services? a. A broker b. An owner-developer c. A real estate brokerage corporation d. a, b, or c Reference: Ch. 2, Employment; Ch. 5, Types of Business Formations, Real Estate Brokerage Corporation

d. a, b, or c

645. When should a broker earn commission when employed to find a purchaser? a. When a successful closing is completed b. When a signed offer from a ready, willing, and able buyer is brought to the seller c. When the terms are acceptable to the seller d. b and c Reference: Ch. 11, Listing Contracts, Broker's Right to Compensation

d. b and c

273. A broker can legally show homes based upon which requests? a. Caucasian neighborhood b. African American neighborhood c. Hispanic community d. retirement community Reference: Ch. 7, Federal Fair Housing Laws

d. retirement community