Real Estate State Exam

Which of the following is NOT an acceptable depository for escrow funds received on a purchase agreement?

any licensed real estate attorney in any state

It would be fraudulent for a broker or sales associate to knowingly sell a property

by using a lottery

A beneficial interest in real estate which implies that an individual will receive legal title at a future date is known as

equitable title

A licensed real estate broker has a listing with an asking price of $80,000. A prospect makes an oral offer of $78,000 and one makes a written offer of $82,000 and submits it to the owner. What should the broker have done?

submitted both

An appraiser is using the sales comparison approach to value. The subject property has three bedrooms, and a comparable property has four bedrooms. If the appraiser determines that an extra bedroom is worth $5,000, what adjustment should the appraiser make?

subtract $5,000 from the comparable property

An easement can be removed by what

survey

A seller lists his home for sale with a broker. The broker tells the seller that FL law requires a 7% commission. Which of these is correct?

the broker has committed an illegal act, because commissions are not set by law

A broker, employed under an open-listing contract by a seller, finds a qualified buyer before going into the hospital for two months. During this time, the seller finds a buyer without the help of the broker. The broker would be in a strong position to claim a commission in this case because

the broker will only collect a commission if they find a buyer or tenant. Therefore the owner can always find their buyer and not owe any commission.

The guarantee in which the seller provides assurance that he owns the property and, therefore, has the right to sell it is called the covenant of

the covenant of seisin (Covenant of Seisin- the promise that the seller owns the property being sold. Covenant of the Right to Convey- the promise that the seller has the right to convey the property. Covenant Against Encumbrances- the promise that the property is free of any liens or encumbrances)

Lenders in mortgage market who supply mortgage funds directly to borrowers are known as

the primary mortgage Market (Primary Lenders: Banks, mortgage brokers, mortgage bankers, and credit unions)

A licensed real estate sales associate in the employ of a broker has

the same obligation to the broker's client and customers as the broker

With a purchase money mortgage, who retains the title to the property?

the seller

A good indicator of the relationship between supply-and-demand in the residential market is

the vacancy rate

In considering the given information, the lien that is superior or takes priority over each other is a

"first in time, first in right" (Mortgage liens usually take priority over any other lien except tax liens)

After completing the post licensing education during the initial license period, licensees must complete

14 hours of continuing education during every 2-year license period

After retrieving written notifications from the landlord, intending to impose a claim for damages upon the security deposit of the tenant, how many days does the tenant have to object in writing to the deduction from the security deposit?

15 Days

How many sections are there in a township?

36

In real property, an "estate by the entireties" is defined as an estate where

A tenancy created by a husband and wife jointly owning real property with an automatic and complete right of survivorship

To raise the lender's yield on a mortgage by 1%, the approximate discount required is

8 points

What is a Bundle of rights (small r)?

Air Rights Surface Rights (Subdivision, Timber, Riparian, Agriculture, Water) Subsurface rights (Mineral, Ground Water)p

The cost of a mortgage states as a yearly rate that includes such items such as interest, mortgage insurance, and loan origination fees (points) is known as the

Annual Percentage Ratio (APR)

"Highest and Best Use"

The possible use of a property that would produce the greatest net income and thereby develop the highest value.

In analyzing in borrower's ability to pay gratitude towards debt, the lender would be concerned with the characteristics of the borrower's

ability to repay the debt (credit rating?)

Property management in the real estate business has gained popularity and importance due to what

a growth in absentee ownership (absentee ownership, originally, ownership of land by proprietors who did not reside on the land or cultivate it themselves but enjoyed income from it)

A broker is allowed to share a referral fee directly with

actively licensed broker who has not violated any laws of Florida

The Comparative Market Analysis (CMA) is very similar to the comparative sales approach, which means

adjustments are made to the comparable properties

Which of these is an INCORRECT statement regarding the broker's escrow account?

broker deposits and personal or brokerage funds up to $6,000 may be kept in the escrow account

A borrower has a home loan with a local bank. His deed states that he is the owner of the property. The mortgage is an encumbrance or a deed on title. Upon repayment of the loan, the cloud will be removed. The borrower is in a state that recognizes which mortgage theory?

Lien Theory In lien theory states, the borrower holds the title to the property. Instead of a Deed of Trust, a Mortgage is recorded in the public record and acts as a lien against the property until the debt is paid off

The FHA insurance fund is intended to reimburse

FHA insures private lenders against the possibility of borrowers defaulting on mortgages that meet certain criteria, thereby expanding the availability of mortgage credit beyond what may be available otherwise. (private lenders when an FHA insured mortgage loan is determined to be uncollectible)

FREC has the authority to discipline Florida licensed, real estate professionals under what Florida State Statutes

FS 475.02

The monetary policy in the United States affects interest rates for home loans by controlling the availability of money. Who determines this monetary policy?

Federal Reserve System

The law that establishes the legal rights and responsibilities of real estate licensees is

Florida Statute 475

FREC Commission

Four FREC members must be licensed real estate brokers, who each must have held an active license for five years before they join the commission. One member must be a licensed broker or a licensed sales associate who has held an active license for the two years preceding appointment. Two members must be people who are not, and have never been, brokers or sales associates. FREC members are appointed for four-year terms, and at least one member must be at least 60 years of age. (Section 475.02, Florida Statutes)

The capitalization rate is obtained by

dividing the annual net operating income by the cost of a piece of property.

The FL law that requires sellers of property to provide buyers with a disclosure summary regarding a mandatory HOA

Homeowners' Association Disclosure, Chapter 720 F.S.

Assuming that the broker is a seller's agent, the sales commission would appear most commonly on the Closing Disclosure as a?

If the Broker is the agent for the seller, the seller is normally responsible for paying the commission, and so it appears as a debit to the seller

Buyer-Broker Agreements typically include all of the following except

It does NOT include seller's obligations This agreement outlines the broker's/agent's duties and obligations to the buyer. It defines agency relationships, the broker's scope of duty, and buyer obligations.

From a legal standpoint, when the buyer is a real estate brokers principal, the sales associate in the broker's office are

also legally bound by the broker's agency obligations

What element is NOT essential to the validity of a real estate contract

NOT recording (1. Contract In Writing 2. Competent Parties 3. Mutual Assent (Agreement) 4. Legal consideration 5. Lawful Object 6. Legal Description)

Active real estate licensees are allowed to perform a comparative market analysis but FS 475.612 prohibits referring to it as

an appraisal

Buyer Smith purchases thirty-five acres for subdivision development and she plans to phase the development. In order to sell the lots in the first phase of the project, she should reserve within the mortgage which type of clause?

Partial release clause

What is a Bundle of Rights (Capital R)?

Possess Use Transfer Encumber Exclude

Which of these is required in a lead-based paint disclosure for homes built prior to 1978?

Sellers are to provide evidence that a lead based paint test has been conducted prior to the sale of the residential real property

A joint tenant who wants to sell their share of a property

Since the joint tenants have equal interest, the property cannot be sold without the consent of all parties. Instead of selling, a joint tenant can choose to transfer their interest to another party. But it's important to note that when interest is transferred, the new party may not enter the joint tenancy

Since performing a broker price opinion or CMA constitutes real estate brokerage activity, the compensation collected in connection with that activity must be paid to the

broker

The main purpose of a constitutional homestead is to

The Florida Homestead provides an exemption from a forced sale of the property to pay certain creditors. (The Florida Homestead law makes purchasing a primary residence exceptionally attractive as it protects a Florida resident's primary home from a judgment creditor. This means that, should you have a recorded judgment against you, that judgment cannot attach to or become a lien on your homestead)

Abstract of Title

The abstract of title is a brief history of a piece of land, and it is used to determine whether or not there is any kind of claim against a property. The abstract of title includes encumbrances, conveyances, wills, liens, grants and transfers.

Buyer purchases a house through Broker and asks Broker to refer a contractor who can remodel parts of the house. Broker refers Buyer to a contractor who gives Broker money for customer referrals. If all interested parties were notified of this arrangement prior to payment, which of these is a correct statement?

The receipt of any money for referral services violates the Florida Real Estate Licensure Law

Prospect pays Broker 100$ for a list of rental properties. When Prospect is unable to successfully locate a rental, Broker returns $50 to Prospect. However, Prospect requested a full refund within 30 days. Could Broker be subject to disciplinary action by refusing to make any further refund?

Yes, Broker should have given a full refund

A mortgage note has been paid in full. The mortgage lien can now be released through which clause?

a defeasance clause

Anything that is permanently fastened or connected to land is what

a fixture

A real estate broker owns XYZ Realty, and his brother owns ABC Developers. Both firms work out of the same office. In this situation, a sales associate may

be registered, and have an active license with, one realty firm or one owner developer

The No Brokerage Relationship notice must be disclosed

before the showing of the property

Advertisements that fail to disclose the license name of the brokerage firm are called

blind advertisement

What should a licensee do when his principal, an owner of subdivision lots, directs that he not show the lots to persons of a particular sex, race, or religion?

contact his attorney for legal guidance

Customarily, the state documentary stamp tax on the deed will show up on the closing disclosure as what

debit to the seller, unless agreed upon for buyer to pay it

A clause found in a deed limiting the size of a dwelling to be a minimum of 2,000 sq. ft would be an example of what

deed restrictions

Which of these is an INCORRECT statement concerning a VA loan?

discount points must be paid by the seller (A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs.)

Which of these deeds is not a statutory deed?

guardian's deed

Unlicensed personal assistant capabilities at an open house include what

handout flyers and promotional materials

A broker entered into a listing contract with the seller of a house and became the single agent of the seller. A potential buyer wants to see the sellers house and wishes to have representation by the broker as well. The broker must

have the seller sign a consent to Transition to Transaction Broker form BEFORE showing the house to the buyer. (FLORIDA LAW ALLOWS REAL ESTATE LICENSEES WHO REPRESENT A BUYER OR SELLER AS A SINGLE AGENT TO CHANGE FROM A SINGLE AGENT RELATIONSHIP TO A TRANSACTION BROKERAGE RELATIONSHIP IN ORDER FOR THE LICENSEE TO ASSIST BOTH PARTIES IN A REAL ESTATE TRANSACTION BY PROVIDING A LIMITED FORM OF REPRESENTATION TO BOTH THE BUYER AND THE SELLER. THIS CHANGE IN RELATIONSHIP CANNOT OCCUR WITHOUT YOUR PRIOR WRITTEN CONSENT.)

When Haley, the landlord of 5604 Wagon Wheel Street, receives money given as a security deposit she may not deposit the funds in what manner?

hold the money in any bank, credit union, or savings and loans institution located in any of the 50 states and may not commingle

Broker advertises property on a lake, with full knowledge that hazardous chemicals from a previous agricultural use are buried on the parcel, but fails to disclose this fact

in violation of the Florida Real Estate Licensure Law

Which of these would be most likely to cause external obsolescence in a single family residence?

increased flow of traffic, expressway, etc ((Environmental, Social, or economic forces))

A real estate sales contract or a contract for sale and purchase is a bilateral contract because

it contains promises to perform by both parties (the seller promises to sell a parcel of real estate and transfer title to the property to the buyer, who promises to pay a certain sum of money or other lawful consideration for the property)

Smith and Brown owned real estate together. When Smith died last year, Smith's ownership interest passed to Brown, rather than Smith's surviving heirs. Most likely, Smith and Brown held title to the property as

joint tenants, with right to survivorship

Advertising for a brokerage corporation must include what

licensed name of the brokerage firm

Smith grants an estate to Johnson "for the life of Jones" with the provision that the estate is to revert back to Smith, or his heirs, upon the death of Jones

life estate

In a platted subdivision, the legal description most often used is

metes and bounds

With respect to ownership of a primary residence, which housing expenses are tax-deductible?

mortgage interest and property tax payments

When using a Florida based title company to hold escrow funds for a real estate sales contract, what must be included in the agreement?

name, address, phone number

The INCORRECT statement regarding adjustable-rate mortgages is that

the bank offering the mortgage loan is required to allow an assumption of the mortgage by a new purchaser (banks cant assume a new purchaser)

Prior to Owner's death, she named her friend, Jenny, as the personal representative of her estate. To take an active part in the sale of Owner's real estate, Jenny is

not required to obtain a real estate license

As a general rule, closing expenses are

paid by the buyer and seller according to the contract

If an owner should die without leaving a will, the probate court having jurisdiction will appoint an individual to settle the decedents matters, formalizing and recording the transfer of title with what type of deed?

personal representative deed

In appraising a 15 year old, typical home in a non-changing rural community, the appraiser would most likely be concerned with which type of depreciation?

physical deterioration

What disclosure summary concerning ad valorem taxes must be presented to a prospective home buyer in Florida?

property tax disclosure

For a metes and bounds legal description to be valid by today's standards, it must include all of these EXCEPT

reference to a conspicuous monument, such as a tree or rock ((MUST BE concrete monuments))

A sales associate leaves Realty Company to work for Realty INC. Before leaving, the sales associate takes the original copies of listing contracts that he secured for Reality Company. The sales associate is

subject to a charge of larceny (larceny only for originals)

Sales associate who fail to complete the post-licensing education requirement and want to continue in the real estate business must

repeat the 63 Hour Sales Associate Pre-License Course and pass the state examination.

In the law of real property, the Statute of Frauds refers to the

requirement that all promises made for the purchase and sale of real property must be in writing to be enforceable (The statute of frauds means if it's not in writing, it did not happen.)

A licensee has been confined in a State Penitentiary as a result of activities not associated with his real estate business. His license may be

revoked

The chance of losing all or part of an investment is called

risk

A sales associate has an argument with his broker and immediately goes to work for another broker. Which of these is a correct statement?

sales associate must be registered with FREC under the new broker before working there

The legal relief in equity action in which the plaintiff seeks to have the court force the other party to perform according to the contract is called a suit for what?

specific performance

If you and a friend are going to purchase a parcel of land together, upon which to erect and rent apartments, it would be advisable, from your family's point of view, in the event of your death, for you and your friend to hold title as

tenants in common

The current FL homestead tax exemption is up to $50,000 for qualifying homestead, and is deducted from the

the assessed value of a primary / permanent residence. The first $25,000 of value is entirely exempt. The second $25,000 exemption applies to the value between $50,000 - $75,000 and does not include a benefit on the school tax. (assessed value when calculating the taxable value)

The purpose of Fannie Mae

to help boost the mortgage market (purchase residential real estate loans in order to keep a uniform flow of funds in the mortgage market) to provide liquidity, stability and affordability to the mortgage market.

Real estate agents have a duty to improve professional standards within the industry. Some acts may be legal but

unethical

An option contract is a

unilateral contract

Zoning ordinances are normally used to control

use of land, such as residential or commercial

Leverage refers to the practice of what?

you borrow funds from a lender to be able to buy the property

Broker was convicted of publishing false or misleading information and received the appropriate criminal penalty. Given these facts, the broker is subject to what

your license could be revoked and you could face fines of up to $5,000 for each violation