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Real Estate Practice Exam 2
Terms in this set (112)
A licensed real estate broker has been hired by a lender to appraise a home for a buyer who has made application for an FHA loan. Which statement is TRUE regarding this situation?
The broker is required to be a state-certified appraiser to perform this appraisal assignment.
Leasehold estates do NOT include:
A remainder estate.
The Florida Real Estate Commission must notify which agency when it takes disciplinary action against any of the agency's licensees?
Division of Condominiums, Timeshares, and Mobile Homes.
Failure to comply with the statute of frauds will result in:
An unenforceable contract.
Which statute prohibits discrimination in hotels, restaurants, and other places of public accommodation if such discrimination is based on national origin?
Civil Rights Act of 1964.
A broker received a $5,000 deposit from a buyer on Tuesday at 1:00 pm. The seller will not be available until Monday. The broker's normal banking day is Monday. The broker is required to deposit the $5,000 before the end of:
Business on Friday.
Which expense is subtracted to derive NOI?
Vacancy and collection losses.
An investor wanted to build a motel. A broker showed him three choice sites zoned hotel-motel. The investor promised to decide on a site in three weeks, so the broker took a two-week vacation. When the broker returned, the investor bought one of these sites. The broker sold the site, not knowing that the zoning on that site had been changed to industrial. Which is correct?
The broker is guilty of culpable negligence.
Which clause is included in a mortgage to prevent a subsequent buyer from assuming an existing mortgage loan?
The broker is a single agent of the seller. The principal has disclosed to the broker that the roof leaks, although there is no visible evidence of a water problem. The broker has satisfied her legal obligation to both the principal and all prospective buyers is she discloses:
That the roof leaks.
The seller instructs the listing broker not to show his home to members of a protected class. The broker informs the seller that this would be a violation of fair housing laws, but the seller is insistent. Which choice is the broker's best course of action under these circumstances?
Withdraw from the listing agreement.
A broker has a listing priced at $120,000. An uninformed buyer offers her $125,000. The broker buys the property for $120,000, then sells it for $125,000. Which statement is FALSE?
This is legal as long as the broker withdraws from the listing first.
A woman has homesteaded her residence. Her home has an assessed value of $279,000. She is a nonveteran who is totally and permanently disabled due to a serious car accident. She is also legally blind. What is her cumulative county taqx exemption on her homesteaded residence?
The duties of a real estate licensee, owed to a buyer or a seller who engages the real estate licensee as a single agent, does NOT include:
Limited confidentiality, unless waived in writing by a party.
Federal savings associations that are members of the Federal Home Loan Bank System are regulated by the:
Office of Thrift Supervision.
A sales associate who is employed by an owner-developer who owns properties in the name of various entities may be issued:
A group license.
A tenant signed a 10-year lease requiring a monthly base rent of $1,900, plus 2% of all monthly gross sales volume over $95,000. The tenant also must pay all property taxes, insurance, and other costs normally considered property owner's costs. This is a:
A real estate licensee may be revoked or canceled without prejudice for which action?
If it was issued through the mistake or inadvertence of the Commission.
A broker's license was involuntarily inactive for two years and one month. To operate again as an active licensee, the broker must complete:
FREC Course I and pass the sales associate's licensing exam.
A man successfully negotiated (and was paid for) the sale of a Federal Communication license for a television station. He is not a licensed real estate broker or sales associate. The man:
Has not violated F.S. 475.
Which statement concerning characteristics of the real estate market is FALSE?
The real estate market is organized and controlled centrally.
A comparable property has one more bedroom ($8,000) and is on a slightly larger lot ($2,000) than the subject property. The comparative market analysis requires a net adjustment of:
Minus $10,000 to the comparable property.
Which entity may NOT be registered as a real estate brokerage?
The formula to calculate the overall capitalization rate is:
NOI divided by value (or price).
Which is NOT a requirement under RESPA?
Give mortgage applicant a list of competing lenders so that the consumer can comparison shop for the best rate.
A transaction broker does NOT have which duty?
Full fiduciary duties to both the buyer and the seller
A license become ineffective when it is:
A real estate brokerage company is a transaction broker for a buyer. The buyer wants to purchase a new home so the sales associate takes him to three model centers listed by three competing real estate companies. The sales associate must give written no brokerage relationship notice to:
Title to real property is technically conveyed when the deed is:
Voluntarily delivered and voluntarily accepted.
Which variable does NOT influence demans?
Availability of construction loans.
A real estate licensee is obligated to present:
All oral and written offers regardless of who worthy they may be in the licensee's opinion.
A single agent broker received an offer on a listed property at the seller's price and terms. Before informing the seller, the broker received a higher offer. She submitted only the first offer, and the seller, her principal, accepted it. The broker:
Has violated her fiduciary duty to her principal.
A man earned a $7,500 commission by selling a coin-operated laundry business, which has six more years before the expiration of its present lease. The man:
Must be registered with the Florida Real Estate Commission as a real estate licensee.
Three claimants have come before the Commission requesting relief from the Real Estate Recovery Fund. All three claimants were involved in the same real estate transaction. Payment for their claims, in the aggregate, is limited to:
The rate of interest that the Federal Reserve Bank charges member banks for borrowing from the Federal Reserve Bank is called:
The discount rate.
Local government exercises its greatest effect on the real estate business by:
Using zoning, taxation, and the planning process.
Which information must be disclosed to all prospective buyers?
The home is situated in a flood-prone area.
Which statement does NOT describe a planned unit development?
Industrial parks are a welcomed off shoot of the PUD project.
A real estate broker is accused of taking money from the company escrow account to pay personal expenses. The broker decides that she does not want to go through the hearing process so the broker turns over her real estate license to the DBPR. What term describes this situation?
Voluntary relinquishment for permanent revocation.
A licensee makes a statement that is material to the transaction as though it were a fact when the licensee does not know whether the statement is true or false, and the buyer relies on the statement. As a result of the statement made by the licensee, the buyer suffers damages. This situation constitutes:
The DBPR may issue which penalty for an initial offense of a minor violation by a licensee?
Notice of noncomnpliance.
A man owns a farm in fee simple. He deeds the farm to a friend until the friend dies, at which time a woman will acquire a fee simple title to the farm. The woman's interest in the farm is a:
Business brokers appraise businesses using appraisal methods similar to real estate appraisal EXCEPT for the additional technique of:
What authority originates from the U.S. Constitution and relates to protection of health and welfare of citizens at local levels?
Which element is NOT essential in a valid real estate sale contract?
An earnest money deposit.
A provision in all mortgages that allows the delinquent mortgagor to avoid foreclosure by paying all of the back mortgage payments, late penalties, and costs of collection up until the time of foreclosure is the:
Equity of redemption.
The statute of limitations is the authority that outlines the:
Period of time during which a contract may be enforced.
The statute of frauds applies to:
Instruments of conveyance of real property.
The documentary stamp tax on deeds is based on the:
Entire sale price of the property.
The documentary stamp tax on deeds is based on the:
The deed must specifically state intent to create such a tenancy.
The financial term applied to the use of borrowed funds to finance the purchase of an office building is:
A mortgage in which changes in the interest rate may cause changes in the monthly payment amount is called:
An adjustable-rate mortgage.
Depreciation (cost recovey):
Is an allowable deduction that requires no current outlay of cash.
Constructive notice is:
Provided by recording in the public records.
In a deed, the warranty of quiet enjoyment pertains to:
Peaceful possession undisturbed by others' claim of title.
The law requiring that the annual percentage rate be disclosed to consumers is the:
Truth in Lending Act/Regulation Z.
Homeowners who have a homestead exemption on their current home in either of the two preceding years can transfer up to what amount of their Save Our Home benefit to a new home?
The government survey method of legal description:
Has as a basis a principal meridian and a base line.
A buyer who obtains a mortgage loan that covers the purchase of a condominium plus furniture, appliances, and other personal property such as towels and kitchen utensils has a:
The bundle of legal rights associated with real property does NOT include the right of:
Which estate includes the right of survivorship?
A title theory state is one in which a mortgage:
Transfers title to the lender or escrow agent until the loan is paid.
Which term refers to a situation where, during the early years of a loan, the principal balance increases?
Which statement is TRUE regarding the monthly payments on a 30-year, fully amortized loan?
Initially, terest is the larger portion of the payment.
When the Fed wants to ease a tight money supply, it may:
Buy Treasury securities.
How much personal money may a broker place in a property management escrow account?
An example of an ad valorem tax is:
A property tax.
Which individual is NOT exempt from real estate licensure under F.S. 475?
A business broker who negotiates leases of business property only.
If a developer wants to develop a new subdivision, she must submit:
A subdivision plat map to the planning commission.
You have been hired to appraise the local public library building. The approach that is likely to be the most relevant is the:
The loss in value of the improvements.
The loss in value of the improvements.
The purchase price of a business minus the value of the tangible assets of that business equals the intangible assets of the business. This is called:
A sales associate received a $5,000 earnest money deposit from a buyer. She immediately delivered the deposit to her broker. The broker deposited the check on the third business day into his general operating account.
This is an example of commingling of escrow funds.
Sales associate Terry Stouffer may have which information entered on her license, if applicable?
Terry Stouffer, LLC.
If all legislated requirements have previously been met, an active broker in Florida may hold an active license in:
Florida and any other state or foreign country whose licensing laws have not been violated.
Which statement is FALSE regarding a corporation for profit that is doing business as a real estate broker?
All stockholders must be registered with the FREC as inactive brokers.
A broker who changes the business address must notify the Commission of the address change within how many days?
In relation to section 1 of a township, section 12 is due:
A man is a 72-year-old retired college professor. The local lender to whom the man applied for a 30-year mortgage denied the man's loan application, even though he has sufficient income from his pension plan and an excellent credit history.
The lender's actions violate the Equal Credit Opportunity Act.
Essential elements of a deed do NOT include:
Signature of a competent grantee.
A person must hold an active real estate license if, for express or for implied compensation, the person:
Advertises a list of available rental properties.
Individuals who solicit mortgage loans, accept applications for mortgages loans, and negotiate the terms of new mortgage loans on behalf of a borrower are called mortgage:
The Florida Real Estate commission is empowered by law to:
Reprimand, fine, or otherwise discipline licensees.
If a seller refuses to pay a broker her sales commission after the residential property is sold, the broker may:
File a suit in the courts for her commission.
If you have located a township numbered T2S, R4E, the township due south of that township is:
In Florida, real property is assessed on January 1 of each year, and property taxes become a lien on the property on:
January 1, the same year.
Brokers should not accept the task of appraising a parcel:
If their fees are contingent on the appraised value.
Which information is confidential?
An examinee's grade on the state licensing examination.
A prospective tenant purchases a rental list from a broker and then rented a duplex that the list said included all utilities. The tenant discovered that only water was included in the rent and notified the broker within the legislated time limit. The tenant is entitled to:
100% of the fee paid.
A real estate company represents a motel owner who wishes to list one of his motels for sale. The owner has told the listing gent that he does not want to sell the motel to any racial minority. Which statement is TRUE?
To refuse to sell or lease any real property based on one's race is a violation of the federal Civil rights Act of 1866.
A property closes on April 8, with the day of closing charged to the seller. The annual property taxes are $1,486.00. Which entry will appear on the closing statement for the property taxes?
Debit to seller and credit to buyer in the amount of $398.98.
The following taxes were paid at the closing of a new home: $1,540 state documentary stamp tax on the deed, $693 state documentary stamp tax on the note, and $396 state intangible tax on the mortgage. What was the purchase price of the home?
What would be the total required taxes for the loans n a $47,500 tract that sold with $10,000 cash down, a new second mortgage of $15,500, and an assumed mortgage of $22,000 that was previously recorded?
You have a level-payment, amortized mortgage of $142,000 at 4.5% for 30 years. The monthly payment is $719.49. What amount of interest will be paid from the second monthly payment?
Your seller owns a home appraised at $152,500. The seller still owes $132,760 on the first mortgage and $4,200 on a second mortgage. Your sales commission will be $9,150. What is your seller's equity in the home?
The city has decided to pave the streets of a recently incorporated community. Property owners are to be assessed 70% of the cost of paving, which is found to be $25 per foot. The 70% assessment tax is to be apportioned between owners on both sides of the streets. What will the special assessment be for a property with 80 feet of frontage?
A property has been assessed at $40,000. The city tax rate is 10 mills, the county tax rate is 9 mills, and the school board levy is 8 mills. The owner has qualified for and received a homestead tax exemption. How much will the owner save from his county taxes as a result of the homestead tax exemption?
A developer purchased three oceanfront lots, each measuring 75 by 110 feet, for $20 per square foot. The developer later sold the lots for $200,000 each. What was the developer's percentage of profit on the sale of the three lots? (Round to the nearest percentage.)
A seller listed a home for $200,000 and agreed to pay a commission rate of 5%. The MLS stated that the commission would be shared between the listing office and the selling office on a 50-50 basis. The home was sold 4 weeks later for 90% of the list price. The listing broker paid the listing sales associate 50% of the listing office's commission. The selling broker paid the selling associate 60% of the selling office's commission. How much commission did the selling sales associate receive?
A licensed real estate broker has a buyer who is interested in investing in income- producing property. The broker finds a property producing net income of $1,750 per month. The buyer informs the broker that she will buy the property if she can get it for a price that will return her 14% per year on her investment. If the desired 14% rate of return is regarded as a 14% capitalization rate, what will the buyer be willing to pay for the property?
Which savings association is federally chartered?
Federal Savings Association
Which governmental entity must be informed when the FREC takes disciplinary action against a real estate licensee?
Division of Florida Condominiums, Timeshares, and Mobile Homes
A seller transfers title to a buyer with a general warranty deed. In which clause of the deed does the seller define the quality of ownership interest conveyed to the buyer?
Which valuation assignment is exempt from USPAP requirements?
Broker's price opinion prepared for a lender concerning a short sale
A property closes on June 10, with the day of closing charged to the buyer. The buyer is assuming the seller's mortgage with its principal balance of $227,500 at 4.5% interest. Which entry will appear on the closing statement?
Debit to seller and credit to buyer in the amount of $252.43
A residential zone requires at least 7,500 square feet per lot. The developer is reserving 25 percent of the land for streets, sidewalks, and a community center. The tract of land for the development consists of 175 acres. How many residential lots are available for the development?
A lender quotes a mortgage loan on $265,000 a 4.5% interest. The monthly payment is $1,342.72. How much of the second monthly payment will apply to the principal reduction?
You are appraising a five-year-old, single-family home. The livable area is 60 feet by 50 feet. The garage is 24 feet by 20 feet. According to figures obtained from a cost-estimating service, the base construction cost per square foot of livable area is $103 and $92 per square foot for the garage. Calculate the reproduction cost new of the structure.
A homeowner originally purchased a new home for $244,900. During the period of ownership, the homeowner spent $27,000 in capital improvements. The homeowner sold the home 16 years later for $329,900. The homeowner paid a brokerage fee of 6% of the sale price and paid other closing costs totaling $2,750. What was the homeowner's capital gain from the sale?
A homesteaded property is located in Jupiter, Florida, in Palm Beach County. The property has been assessed at $185,000. The city tax rate is 8.8 mills, the county tax rate is 9.3 mills, and the school board levy is 6.5 mills. The owner is a widow and has qualified for and received homestead tax exemption. How much will the owner pay in property taxes?
A developer purchased three oceanfront lots, each measuring 75 x 110 feet, for $20 per square foot. The developer later sold the lots for $200,000 each. What was the developer's percentage of profit on the sale of the three lots? (round to the nearest percentage)
An appraiser has assigned the following weights to three adjusted sale prices:
(a) Comparable 1: $322,500, 40%
(b) Comparable 2: $319,000, 35%
(c) Comparable 3: $312,000, 25%
What is the recorded estimated market value of the subject property?
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