IFREC Dear Student - Sales Assc

Selection of Questions from IFREC
Quiz--Chapters 1 & 2
Serving Central Florida Since 1983
1. Building or construction is considered part of which type of real estate business?
a. subdividing
b. land development
c. marketing
d. financing
2. A real estate appraiser's fee should be based upon:
a. a percentage of gross income.
b. a percentage of fair market value.
c. the amount of time spent and difficulty of appraisal.
d. a percentage of selling price.
3. The prospective member ofNAR must subscribe to high professional standards expressed in the:
a. Code of Ethics.
b. Florida Real Estate Handbook.
c. Standards of Business Conduct.
d. Handbook of Professional Practice.
4. A real estate broker or sales associate is one who performs all of which of the following
functions relating to real property for direct or indirect compensation?
a. appraises, auctions, sells, exchanges, fertilizes
b. auctions, appraises, measures, leases, exchanges, sells rental property information
c. auctions, sells, appraises, exchanges, buys, rents, leases, advertises real estate services
d. exchanges, buys, rents, finances, appraises, sells rental property information
5. The purpose of laws regulating real estate practitioners is to:
a. limit the number of people who can enter the real estate business.
b. ensure that real estate practitioners attain high levels of competence.
c. prevent the entry of unscrupulous, out-of-state land dealers.
d. protect the public.
6. The terms "real estate broker" or "real estate sales associate" apply to all of the following except:
a. persons selling, exchanging or leasing industrial property.
b. persons selling, exchanging or leasing property as a court appointee.
c. persons selling, exchanging or leasing condominiums for longer than one year.
d. persons selling, exchanging or leasing beach property.
7. The regulatory agency for real estate practitioners in Florida is:
a. FAR.
b. SEC.
c. FREC.
d. BRE.
8. What minimum age is necessary for licensure?
a. 18 years
b. 21 years
c. 30 years
d. No minimum age required
9. The initial licensure of an applicant must be for what classification?
a. sales associate
b. broker
c. broker or sales associate
d. whatever category is most appropriate
10. Under what type of employer other than a licensed broker may a sales associate be licensed?
a. broker-sales associate
b. out-of-state broker
c. property owner/developer
d. attorney
11. What status gives one the right to obtain a license?
a. resident of Florida
b. high school graduate
c. U.S. citizen
d. licensure
12. In addition to having licensure status, what must one have in order to act lawfully as a broker or
sales associate?
a. license
b. driver's license
c. high school diploma
d. voter registration card
13. All of the following types of competence of knowledge are tested on the license examination
a. ability to sell real estate.
b. nature of fraud and fraudulent conduct.
c. nature of deeds, abstracts, contracts and mortgages.
d. licensure and other details of the law.
14. In Florida, to be eligible for licensure as a broker, a sales associate must fust:
a. be licensed for 24 months with one or more brokers within the preceding five year period.
b. be licensed with one broker for 6 months.
c. be licensed with one or more brokers during any period.
d. be licensed as a broker/sales associate.
15. An applicant for licensure as a sales associate must meet all of the following requirements
a. be a natural person.
b. be a resident of Florida.
c. complete a sixty hour educational course.
d. provide information regarding any convictions or nolo contendere pleas the applicant may
have had in the past.
16. What is the licensing requirement for individuals who deal in business enterprises or business
a. they must be licensed as real estate brokers or sales associates
b. they must be licensed as mortgage brokers
c. they may be licensed as real estate brokers or sales associates or as mortgage
brokers, at their own option
d. they are not required to hold any license
17. Partners in a real estate brokerage partnership who do not deal with the public in a sales capacity
must hold what type of status?
a. active broker
b. active sales associate
c. registration
d. voluntary inactive
Practice Quiz--Chapter 3
1. The Director of the Division of Real Estate in DBPR is appointed by whom, subject to approval
by a majority of the Florida Real Estate Commission?
a. governor
b. governor with approval of the Florida Senate
c. secretary, DBPR
d. chairman, FREC
2. The administrative officer employed by DBPR and assigned to the Commission to be responsible
for the day to day administration of Commission business is the:
a. General Counsel.
b. Director, DRE.
c. Chairman.
d. Secretary.
3. In a real estate brokerage business partnership, each partner who expects to deal with the public
as a broker:
a. need not be licensed, since the partnership must be licensed.
b. must be registered as Involuntarily Inactive.
c. must be registered as Voluntarily Inactive.
d. must be licensed as an active broker.
4. The Florida Real Estate Commission is contained within which State department?
a. Department of Administration
b. Department of Commerce
c. Department of Community Affairs
d. Department of Business and Professional Regulation
5. The Florida Real Estate Commission is composed of how many members?
a. seven
b. four
c. five
d. three
6. All of the following functions come under the powers or duties of the Commission except:
a. Investigate persons doing real estate business in the state.
b. Enact by-laws and regulations for its own use.
c. Determine a reasonable per diem and mileage for members of the Commission attending
Commission meetings.
d. Prescribe minimum educational courses for real estate brokers and sales associates.
7. The members of the Commission are:
a. elected by the State Senate.
b. appointed by the State Senate.
c. elected at large.
d. appointed by the Governor and confirmed by the Senate.
8. Rules promulgated by the Commission are:
a. extensions of the law.
b. designed to specify and implement the law.
c. laymen's interpretation of the law.
d. none of the above.
9. The Florida Real Estate Commission consists of:
a. five members who have been active brokers for ten years and two lay members.
b. three members who have been active brokers for ten years and one lay member.
c. five members who are brokers and two lay members.
d. four members who have been active brokers for five years preceding appointment, one
member who has been an active broker or sales associate for two years preceding
appointment and two consumer members.
10. How long is a license year?
a. one year
b. two years
c. three years
d. indefmite
11. An involuntary inactive license may be maintained for no longer than:
a. 12 months.
b. 10 years.
c. 2 years.
d. 4 years.
12. The continuing education course must be taken:
a. every two years after renewal of a licensee's initial license.
b. every four years after renewal of a licensee's initial license.
c. every year after renewal of a licensee's initial license.
d. every other renewal period after renewal of a licensee's initial license.
13. If any type of license is lost or destroyed:
a. the holder must wait until the new license year to replace the license.
b. the holder should type a new license having approximately the same wording and dates as
appeared on the original.
c. a new license will be issued without fee.
d. a new license will be issued upon payment of $25.
Practice Quiz--Chapter 4
1. Who has responsibility to operate in a fiduciary capacity when a principal secures the services of
a broker?
a. the broker only
b. both the broker and the principal
c. the principal only
d. neither party
2. A single agent broker acts on behalf of his employer also known as the:
a. buyer.
b. seller.
c. agent.
d. principal.
3. The parties referred to by the Law of Agency as having a fiduciary relationship are:
a. buyer-seller.
b. principal-agent.
c. broker-sales associate.
d. sales associate-client.
4. The rules which govern a broker's dealings with his principal also govern the sales associate in
his dealings with:
a. only the principal.
b. both the principal and his broker.
c. all other real estate practitioners.
d. the Commission and its agents.
5. It is the duty of a single agent broker to obtain:
a. the highest price possible.
b. the most favorable price and terms from the standpoint of the principal.
c. the lowest price possible.
d. the most favorable price and terms with regard to his own commission.
6. Which of the following is true regarding a broker's employment?
a. the broker may delegate his fiduciary responsibilities to another broker
b. a broker has the implied authority to reject unreasonable offers to his principal
c. a broker is obligated to obey arbitrary instructions given by his principal
d. a broker may buy his principal's property and resell at a profit to the prospect
7. When Broker B arranges a transaction such that he received compensation higher than customary
without the knowledge of his principal he is said to:
a. receive an overage.
b. commit conversion.
c. create usury.
d. have commingled.
8. Harmful information that a broker learns about his or her principal may be disclosed when?
a. at any time
b. during the period of the fiduciary relationship
c. after the transaction is completed and the fiduciary relationship is dissolved
d. never
9. When is a broker justified in acting contrary to instructions of his or her principal that do not
require the broker to commit fraud or otherwise violate the law?
a. when the broker believes a loss will result to the principal
b. when the broker believes that a more beneficial transaction may be obtained within a
reasonable time
c. when the broker believes the principal does not fully understand the provisions of an offer
d. never
10. A fiduciary relationship arises from the:
a. trust and confidence between parties.
b. specific promise of one party to be loyal to the other party.
c. valuable consideration in the employment contract.
d. actual or implied requirement for one person to protect the interests of another person.
11. It is fraudulent and dishonest for a broker or sales associate to:
a. offer for sale a property to which he knows title is not merchantable and about which he does
not inform the purchaser.
b. offer for sale any property which he knows is covered by mortgage which also covers other
property sold and which can be released only by payment of an amount greater than that
remaining due from the purchaser after the sale.
c. procure, influence, or induce a person to buy a property by promising that he, his employer (if
a sales associate), or the owner will resell or repurchase the property at a future time.
d. all of the above.
12. The relationship between broker and principal is known as a:
a. beneficent.
b. trustee relationship.
c. caveat emptor relationship.
d. fiduciary relationship.
13. The two relatively distinct areas in which fraudulent conduct may arise are:
a. negligence and concealment.
b. conversion and conspiracy.
c. concealment and misrepresentation.
d. caveat emptor and fiduciary relationships.
Practice Quiz--Chapters 5
1. A sales associate:
a. must maintain an office that is licensed with the Commission.
b. may have an office but is not required to do so.
c. must be licensed from and work out of an office maintained and licensed in the name of the
d. may not be associated with any office.
2. When there is a dispute between parties to an uncompleted transaction over a deposit held by the
broker or the broker is in doubt as to who is entitled to a deposit, the broker should:
a. split the deposit between parties.
b. keep it himself until an agreement is reached.
c. ask his lawyer what to do.
d. notify the Commission and seek its advice.
3. A broker's sign is required to contain:
a. the licensed trade name only.
b. the personal name and the name(s) of any active partners operating under that name.
c. the brokers trade name and personal name.
d. any name desired.
4. All of the following types of business organizations may act as real estate brokers except:
a. corporations sole.
b. business trusts.
c. unincorporated associations.
d. all of the above.
5. An earnest money deposit must be placed in a segregated escrow account in a Florida:
a. commercial bank only.
b. commercial bank, savings association or credit union only.
c. commercial bank, savings association, credit union, attorney with trust powers or title
company only.
d. commercial bank, savings association, title company or life insurance company only.
6. When does a broker's legal duty to account for and deliver to the parties to a transaction all
funds, deposits, abstracts, mortgages, conveyances, leases, and so on, normally end?
a. after the contract for sale is signed
b. after closing is completed
c. after all contingencies in the contract are satisfied
d. never
7. What is a partnership?
a. an artificial person created by law
b. an arrangement whereby two or more persons engage in business together although no
agreement concerning the sharing of profits and losses exists
c. an arrangement whereby two or more persons engage in business together with an express or
implied agreement concerning the sharing of profits and losses
d. any arrangement of three or more persons doing business
8. A sales associate or broker-sales associate may have no more than how many registered
employers at any one time?
a. one
b. two
c. three
d. any number
9. Which of the following types of business organizations rna y act as real estate brokers?
a. corporations for profit
b. general and limited partnerships
c. joint ventures
d. all of the above
10. All of the following are true about a broker's business except:
a. a broker must maintain an office during the time his license is active.
b. there must be a sign with the broker's name and the word "Realtor" at the entrance to his
c. a broker is liable for the acts of his salespeople.
d. a broker must report all purchase offers to his principal.
11. A limited partnership consists of what type of partner(s) in addition to the limited partners?
a. active
b. non-active
c. general
d. specific
12. Officers and directors of a corporation who expect to be actively engaged in the real estate
business become licensed:
a. by virtue of their offices without necessarily being qualified personally.
b. automatically through licensing of the corporation.
c. by filing appropriate documents with the Secretary of State.
d. in the same manner and procedure as any other applicant for active licensing.
13. Licensing of a broker's branch offices is required if:
a. brokerage operations are to be conducted at the place.
b. the office is more than a temporary shelter and transactions are closed there.
c. salespeople are permanently assigned there.
d. all of the above.
14. Regulations pertaining to signs specify that:
a. one sign per firm must be maintained.
b. each sales associate must maintain a sign.
c. signs are permissible but not required.
d. every licensed broker must maintain a sign for each office.
15. A trade name may be registered and used by:
a. an individual broker.
b. a corporation or partnership broker.
c. an individual, corporation or partnership broker.
d. an individual broker, provided the individual also uses his or her real name.
16. In order to be licensed, a corporation must have a minimum of how many active officers?
a. one
b. two
c. three
d. none
17. Regarding advertising of listings, sales associates are:
a. required to advertise under their own names.
b. permitted to advertise under their own names.
c. permitted to advertise under their own names with supervision from the employer.
d. prohibited from advertising under their own names only.
18. A deposit serving as earnest money is limited to:
a. cash.
b. cash and currency.
c. cash, currency and securities.
d. cash, currency, securities and any other medium of exchange that can be held or converted
into cash or bank credits.
19. A real estate sales associate who receives a deposit from a prospective buyer should
a. deposit the funds in the sales associates personal account.
b. deposit the funds in an escrow account.
c. deliver the funds to the sales associate's broker or employer.
d. deposit the funds with the Real Estate Commission.
20. All records pertaining to a broker's escrow account(s) are subject to inspection at all reasonable
times by:
a. buyers and sellers.
b. the Department or its authorized representatives.
c. the State Attorney General.
d. the public defender.
21. The earnest money held by a broker must be:
a. held in trust for the purchaser.
b. deposited in a separate account.
c. returned to the purchaser if the seller fails to tender good title.
d. all of the above.
22. A broker holds a deposit in trust for the account of the purchaser until which of the following
a. transaction is consummated
b. deposit is forfeited
c. seller refuses to sell or meet the terms of sale
d. any of the above actions
23. If a sales associate believes that a brokerage commission has been unjustly withheld from him,
he may take legal action against:
a. the employing broker only.
b. the client.
c. both the broker and client.
d. anyone the sales associate believes is contributing to the withholding.
Practice Quiz--Chapter 6
1. A defendant may seek to have a final order reviewed by the:
a. Florida Supreme Court.
b. District Court of Appeals.
c. County Court.
d. hearing officer.
2. If a person, corporation, or partnership is illegally acting as a broker or sales associate or is
otherwise in violation of the law, orders, rules, regulations or by-laws of the Commission, the
Department may apply for a(n):
a. writ of certiorari.
b. motion to quash.
c. writ of termination.
d. injunction or writ of mandamus.
3. The Florida Administrative Procedure Act provides procedural due process safeguards in all
adjudications by:
a. courts.
b. administrative agencies.
c. professional associations.
d. publicly owned corporations.
4. Upon termination of suspension, a licensee's license:
a. is automatically reinstated.
b. is automatically revoked and a new license is issued.
c. will be reissued or renewed only if the licensee shows that he or she has not acted as a broker
or sales associate during the suspension period.
d. automatically lapses and the licensee must reapply for a license as any new applicant.
5. Probable cause of violations of the Florida Real Estate License Law is determined by:
a. the DBPR investigation section.
b. the DBPR examination section.
c. the Chairman of FREC.
d. the probable cause panel.
6. Loss or damage resulting from carelessness, improvidence, folly or omission of something a
reasonable, prudent, honest person would do is covered by which term?
a. culpable negligence
b. fraud
c. conversion
d. conspiracy
7. Whenever an issue of material fact appears in a formal proceeding to deny, suspend or revoke a
license, who is appointed to receive and report the testimony of witnesses and other evidence
offered by the parties?
a. attorney
b. administrative law judge
c. investigator
d. educator
8. If a licensee violates the statutes or rules and regulations of the Commission, a court may punish
the licensee by:
a. five years in jail.
b. a fme of not more than $500 and imprisonment for not more than 60 days.
c. a fine of not more than $2,000 and imprisonment for not more than 6 months.
d. courts have no jurisdiction over persons licensed with the Commission.
9. Types of penalties which the Commission may impose for violation of the statutes, rules or
regulations are:
a. forfeiture.
b. jail terms.
c. fines and jail terms as well as probation and suspension.
d. fines, reprimand, citations, probation, denial, suspension or revocation of license.
10. Which of the following actions or situations are grounds for revocation of licensure?
a. licensure and/or license obtained by fraud, misrepresentation or concealment
b. licensure and/or license granted by mistake or inadvertence by the Commission
c. confinement in a state or federal prison
d. all of the above
11. An Administrative Complaint is:
a. another name for a judgment.
b. an indictment.
c. an outline of charges against a broker, sales associate or applicant.
d. an examination.
12. How many times must a licensee ordinarily be found guilty of misconduct that warrants
suspension before his licensure may be revoked?
a. once
b. twice
c. three times
d. the Commission may suspend or revoke at its discretion
13. If a broker mishandles or misappropriates earnest money deposits, the broker's license may be:
a. denied.
b. suspended.
c. revoked.
d. either b or c.
14. If a licensee commits a crime of moral turpitude (such as embezzlement, larceny, robbery, rape,
kidnapping, perjury or blackmail), the Commission may:
a. take no action since these crimes are beyond its jurisdiction.
b. suspend license.
c. revoke license.
d. suspend or revoke license.
15. Which of the following categories is the most inclusive list of those who may file a complaint
against a licensee?
a. any non-licensee
b. any licensee
c. the Commission
d. any person or the Department
16. Failure of an active broker to maintain an office, operating without current and valid license,
failure to handle escrow funds properly, use of false advertising, false promises, tricks, blind ads,
fraud, culpable negligence or misrepresentation may result in:
a. suspension.
b. jail.
c. revocation.
d. any of the above.
Practice Quiz--Chapters 7 & 8
1. The Civil Rights Act of 1866 prohibits discrimination on the basis of:
a. race.
b. race, religion.
c. race, religion, sex and national origin.
d. all of the above.
2. A licensee may not be a party to any plan to discriminate against any person on the basis of race,
color, religion, national origin, familial status, handicap or:
a. sex.
b. economic status.
c. social status.
d. politics.
3. If a landlord requires a security deposit which is held over three months, the landlord must:
a. keep the deposit in an account for the tenant.
b. post a surety bond with the Clerk of the Circuit Court.
c. either a or b.
d. neither a nor b.
4. In conveying an interest in real property to another party, legal title is conveyed in all of the
following except:
a. an estate for years.
b. a fee simple estate.
c. an estate by the entireties.
d. a life estate.
5. Time sharing projects in Florida are regulated by the:
a. Florida Real Estate Commission.
b. Department of Community Affairs.
c. Division of Florida Condominiums, Timeshare and Mobile Homes
d. Department of Housing and Urban Development.
Questions 6-8 refer to the following situation:
Able, an owner in fee simple, deeds land to Baker to enjoy until he dies, at which time Charlie
will receive title to the land.
6. Baker's interest in the land is known as a:
a. fee simple estate.
b. life estate.
c. remainder estate.
d. estate for years.
7. Charlie's interest in the land is a(n):
a. reversion estate.
b. remainder estate.
c. estate for years.
d. joint estate.
8. Suppose Baker mortgages the land to Darwin, then sells the land to Edgar. Baker subsequent!)
dies. Title to the land is held by:
a. Edgar, encumbered by the mortgage.
b. Charlie, encumbered by the mortgage.
c. Baker's heirs.
d. Charlie, in fee simple.
9. For what period does a time-share purchaser have the right to cancel the contract?
a. 10 days
b. 20 days
c. 30 days
d. There is no such right
10. The Florida Real Estate Time Sharing Act primarily requires:
a. evaluation of the investment merits of time share units.
b. market valuation of time share units.
c. time share project developers to meet zoning and environmental regulatory provisions.
d. full disclosure of all pertinent facts about time share projects.
11. In Florida, a surviving spouse's "elective share" in the deceased spouse's property is:
a. 50 percent of the decedent's real estate.
b. 30 percent of the decedent's net distributable estate.
c. 50 percent of all property owned by the decedent during their marriage.
d. one-third of all property owned by the decedent during their marriage.
12. The full "bundle of rights" in real property includes:
a. use, extinction, destruction, possession.
b. use, enjoyment, destruction, possession.
c. use, exclusion, enjoyment, possession.
d. use, exclusion, disposition, possession.
13. A through-the-wall air conditioner would most likely be considered a:
a. chattel personal.
b. fixture.
c. chattel real.
d. personal property.
14. The four criteria for determining whether an item is a fixture are:
a. intent, method of annexation, adaptation, relationship of parties.
b. intent, abandonment, redemption, accretion.
c. size, annexation, avulsion, adaptation.
d. intent, size, annexation, redemption.
15. Unless the instrument specifically creates survivorship, all of the following estates normally
provide for survivorship except:
a. Tenancy by the entireties.
b. Tenancy in common.
c. Joint tenancy in which survivorship is specified.
d. All of the above provide for survivorship.
16. The four unities necessary for a joint tenancy are:
a. interest, survivorship, possession, time.
b. possession, deed, title, time.
c. title, interest, time, possession.
d. person, utility, interest, purpose.
17. George and Anna, husband and wife, own a piece of property in an estate by the entireties. They
divorce. Now they own property as:
a. joint tenants.
b. tenants in common.
c. tenants by the entireties.
d. joint tenants without right of survivorship.
18. Arthur and Bernard own a section of land as joint tenants. Arthur sells his interest to Clyde.
Bernard and Clyde are now:
a. joint tenants.
b. tenants in common.
c. tenants by the entireties.
d. tenants for years.
19. If a wife's husband dies intestate and there are no children or lineal descendants, she may take
what share of the estate?
a. 50 percent
b. 33-1/3 percent
c. 100 percent
d. none of the above
20. If a husband dies intestate, his wife obtains what type of estate in the homestead property held i
his name only, if there are two lineal descendants?
a. fee simple estate
b. life estate
c. tenancy in common
d. tenancy by the entireties
21. The surviving spouse of a decedent is entitled to what value of decedent's household furniture,
furnishings, appliances and personal effects?
a. $10,000 total
b. $ 6,000 total for any such property
c. $ 1,000 household items and $5,000 personal effects
d. $10,000 household items plus automobiles
22. A parcel of real property includes:
a. land and improvements.
b. mineral rights, trees, houses and septic tanks.
c. airspace, surface and ground beneath the surface.
d. all of the above.
23. A tenancy at sufferance is a tenancy in which the:
a. tenant suffers from an obnoxious landlord.
b. landlord suffers from an obnoxious tenant.
c. lease instrument was invalid.
d. tenant stays in possession of the property without renewing a written lease with another
written instrument.
Practice Quiz--Chapter 9
1. The legal instrument by which title to property or estates is conveyed in a private grant between
living persons is known as a:
a. contract.
b. deed.
c. warranty.
d. covenant.
2. A warrant is a(n):
a. agreement.
b. promise to do something.
c. promise not to do something.
d. guarantee of a promise.
3. The clause in which the grantor warrants that he owns and has the power to convey all he is
conveying is known as the:
a. habendum clause.
b. warrant of seizen.
c. warrant of quiet enjoyment.
d. reddendum clause.
4. The most common deed, and most desirable from the buyer's point of view, is the:
a. fat deed.
b. warranty deed.
c. quit-claim deed.
d. bargain and sale deed.
5. A person who dies without leaving a will is said to have died:
a. inchoate.
b. intestate.
c. testate.
d. incoherent.
6. A person appointed by the court to handle a deceased's estate is known as a(n):
a. executor.
b. administrator.
c. personal representative.
d. bailiff.
7. For a deed to be valid, two witnesses are:
a. not necessary.
b. necessary only for a homestead transfer.
c. required in Florida for all deeds.
d. always required.
8. Compatibility of home size or style in a neighborhood is usually controlled by means of:
a. police power.
b. restrictive covenants.
c. zoning ordinances.
d. restrictive cummerbunds.
9. Recording of a deed tells the world at large that the new owner is Mr. X. This is called:
a. actual notice.
b. acknowledgment.
c. construed notice.
d. constructive notice.
10. Buyer buys a property subject to an existing mortgage. Buyer contracts with builder to add a
room onto his house. After construction has started, buyer gives a second mortgage to a friend
who promptly has it recorded. After the construction has been completed the contractor places a
construction lien on the property. What are the priorities of the liens on the buyer's property?
a. 1st mortgage, 2nd mortgage, construction lien
b. 1st mortgage, construction lien, 2nd mortgage
c. construction lien, 1st mortgage, 2nd mortgage
d. none of the above
11. Liens for taxes and assessments have priority over private liens:
a. with the exception of construction liens.
b. except when private liens have already been accrued.
c. with exception of mortgages.
d. without exception.
12. Charlie buys a property for $50,000 of which $30,000 is an assumed mortgage, $15,000 is a
purchase money 2nd mortgage and the remainder $5,000 is cash. How much is the documentary
stamp tax on the deed?
a. $350.00
b. $300.00
c. $275.00
d. $250.00
13. Obtaining title by adverse possession is accomplished by possession which is:
a. open, notorious, hostile, adverse.
b. open, exclusive, hostile, notorious, adverse.
c. hostile, exclusive, open, continuous, adverse, notorious.
d. hostile, open, perverse, exclusive, continuous.
14. The statutory period of continuous adverse possession in Florida is:
a. 12 months+ 1 day.
b. 4 years.
c. 7 years.
d. 11 years.
15. The power of government to take land for a public purpose by way of condemnation proceedings
with compensation is known as:
a. adverse possession.
b. eminent domain.
c. police power.
d. escheat.
16. The power of government to enact zoning and building codes is based upon:
a. eminent domain.
b. adverse possession.
c. police power.
d. escheat powers.
17. Farmer Brown puts up a fence between his and Farmer Jones' properties. Farmer Jones
discovers that the fence is two feet on his side of the property line. This is termed a(n):
a. appurtenance.
b. easement.
c. encroachment.
d. assessment.
18. In Florida, an estate for a term longer than one year must be created by:
a. an oral agreement if witnessed by no natural persons.
b. a written instrument.
c. a written instrument signed by its creator in the presence of two subscribing witnesses.
d. a written instrument signed both by the lessor and lessee in the presence of two subscribing
19. The requirements for a valid lease are:
a. names of lessor and lessee, legal capacity, property description, consideration, term of
b. signature of lessor, seal, legal capacity, consideration, term.
c. names of lessor and lessee, seal of lessor, consideration, capacity.
d. signature of lessor, term, property description, consideration.
Practice Quiz--Chapter 10
1. The first reference point in a surveyor's description of property is termed the:
a. starting point.
b. point of beginning.
c. initial reference point.
d. point of first reference.
2. The legal description of unplatted land should be prepared by a(n):
a. broker
b. attorney.
c. land surveyor.
d. title company.
3. A legal description such as" ... run N 73°26'43"E a distance of 100.43', thence northerly along a
curve convex to the East and having a radius of 60.0' a distance of 74.96' ... " is an example of the:
a. government survey method.
b. Torrens system.
c. metes and bound system.
d. monuments method.
4. The main reference lines running north to south in the government survey method are termed:
a. latitudes.
b. longitudes.
c. base lines.
d. meridians.
5. The starting point of measurement in Florida by government survey is:
a. Washington, D.C..
b. Jacksonville.
c. Tallahassee.
d. Miami.
6. The area between adjacent meridians is called a(n):
a. range.
b. township.
c. section.
d. acre.
7. The distance between adjacent meridians is:
a. 5 miles.
b. 6 miles.
c. 10 miles.
d. 15 miles.
8. The area bounded by two adjacent meridians and two adjacent base lines is called a(n):
a. township.
b. range.
c. section.
d. acre.
9. The number of sections in a township is:
a. 30.
b. 36.
c. 140.
d. 640.
10. How many square miles are in a section?
a. 640.
b. 64.
c. 36.
d. 1.
11. The number of square feet in an acre is:
a. 45,360.
b. 43,650.
c. 46,350.
d. 43,560.
12. The number of acres in a square mile is:
a. 640.
b. 5280.
c. 100.
d. 36.
13. The legal description of lot and block number necessarily refers to a:
a. government survey.
b. plat map.
c. development.
d. recorded deed.
14. The area between adjacent baselines is called a(n):
a. range.
b. township.
c. section.
d. acre.
Practice Quiz--Chapter 11
1. Which of the following is a unilateral contract?
a. contract for the sale of land
b. contract for deed
c. open listing contract.
d. exclusive right-of-sale listing contract
2. Florida statutes require which type of contract to be in writing?
a. contract for the sale of land
b. listing contract
c. unilateral contract
d. parol contract
3. A broker's commission may be forfeited under which condition?
a. broker does not inform both parties in an exchange that he is the broker for both parties
b. broker has not renewed his license
c. broker has not obtained a valid listing
d. all of the above
4. If some of the terms and/or promises of a contract are inferred from the acts or conduct of the
parties rather than expressly stated, that contract is known as:
a. an inferred contract.
b. an implied contract.
c. a parol contract.
d. an executory contract.
5. The practical essentials of a valid real estate contract are:
a. legality of object, competent parties, offer, acceptance, legal age.
b. competent parties, offer, acceptance, consideration, meeting of the minds.
c. offer, acceptance, consideration, competent parties, legality of object, in writing and signed.
d. legal age, meeting of the minds, consideration, acceptance.
6. "Meeting of the minds" refers to:
a. offer and acceptance.
b. offer and consideration.
c. legality of object and acceptance.
d. legality of object and consideration.
7. A contract is:
a. a form denoting written instruments and acknowledgments.
b. a meeting of the minds creating enforceable rights.
c. an offer and acceptance.
d. an agreement to find a purchaser for a stipulated property.
8. The party which considers accepting a stipulated price for a property is termed the:
a. offeror.
b. offeree.
c. grantee.
d. party of the second part.
9. When the requirements of a contract have been fully performed, it is termed:
a. executed.
b. finished.
c. parol.
d. bilateral.
10. The requirement that to be enforceable contracts for sale for real property be in writing and
signed by the parties comes under the:
a. real estate license law.
b. statute of limitations.
c. statute of frauds.
d. declaration of independence.
11. The consideration put down by the buyer to show good faith of an offer to purchase is termed
a. earnest money deposit.
b. binder contract.
c. escrow disbursement.
d. binder receipt.
12. The amount of time allowed in which to bring suit for breach of a contract is specified by the:
a. statute of frauds.
b. statute of limitations.
c. real estate license law.
d. court of equity.
13. An enforcement action on an oral contract must be brought within what time period?
a. 20 years
b. 5 years
c. 4 years
d. 6 months
14. When not under express contract, a broker is entitled to a commission when:
a. the broker fmds a ready, willing and able buyer.
b. the broker effects a sale.
c. the broker is the procuring cause of a sale.
d. the broker communicates the offer.
15. A broker who has procured a purchaser who is ready, willing, and able to buy may collect a
commission even though:
a. he failed to inform his client of a rumor which may have influenced his principal's decision.
b. the sale fails due to some act of the principal.
c. his services were voluntary.
d. he bought the property himself at a higher price without informing the principal of this.
16. A broker cannot execute a contract on behalf of a principal unless:
a. the broker is an attorney-at-law.
b. The broker has been given power of attorney.
c. the principal cannot be reached in time.
d. all of the above.
17. Mr. Baker gives XYZ Corporation, licensed real estate brokers, an exclusive-right-to-selllisting
on his property. He subsequently sells the land through ABC Realtors on the terms and within
the time period of the XYZ Corporation listing. To whom is he liable for a commission?
a. no one
b. ABC Realtors
c. XYZ Corporation and ABC Realtors
d. insufficient information to determine
Practice Quiz--Chapter 12
1. The instrument accompanying a mortgage which evidences the debt is called the:
a. note.
b. contract.
c. lien.
d. option.
2. A mortgage is a(n):
a. conveyance of real property.
b. interest in or claim against real property.
c. evidence of debt.
d. all of the above.
3. In most cases, the buyer of real property finances a purchase and secures the loan by:
a. giving a mortgage to the mortgagee.
b. taking a mortgage from the mortgagor.
c. giving a mortgage to the mortgagor.
d. taking a mortgage from the mortgagee.
4. Although a mortgage is an instrument in the form of a deed, the conveyance of title is annulled
when the debt is repaid by means of the:
a. estoppel clause.
b. acceleration clause.
c. defeasance clause.
d. release clause.
5. To free subdivided parcels from a mortgage upon payment of a stipulated amount, the mortgage
necessarily contains a(n):
a. defeasance clause.
b. acceleration clause.
c. satisfaction clause.
d. partial release clause.
6. In amortized mortgages, the periodic payment is composed of:
a. principal only.
b. interest only.
c. principal, insurance and taxes.
d. principal and interest.
7. After defaulting on mortgage payments but prior to foreclosure, the mortgagor may retain the
property by paying all back payments with interest. This is known as the mortgagor's:
a. equity of redemption.
b. right of estoppel.
c. right of defeasance.
d. right of release.
8. An FHA mortgage loan is:
a. granted by the Federal Housing Administration.
b. insured by the FHA.
c. guaranteed by the FHA.
d. certified by the FHA.
9. The interest rate on a FHA mortgage is established by the:
a. market.
b. Federal Reserve.
c. Secretary of Housing and Urban Development (HUD).
d. Congress.
10. The VA or GI mortgage loan:
a. is insured by the Department of Veterans Affairs.
b. is guaranteed by the Department of Veterans Affairs.
c. is sometimes made by the Department of Veterans Affairs.
d. (b) and (c) above.
11. The required down payment on a VA loan can be as small as:
a. determined by Congress.
b. calculated the same as an FHA mortgage loan.
c. zero.
d. raised and lowered by the President.
12. The most common view of a mortgage is that it secures a debt with a claim against the property.
This view is called:
a. title theory.
b. inchoate interest.
c. lien theory.
d. secured interest.
13. A mortgage on which the entire principal amount comes due at the end of the mortgage term is
known as a(n):
a. package mortgage.
b. amortized mortgage.
c. straight or term mortgage.
d. balloon mortgage.
14. Barney wants to buy Sam's house but Sam wants $75,000 cash. Barney doesn't have this much
cash on hand but persuades Sam to take back a $68,000 mortgage. This type of mortgage is
known as a(n):
a. conventional mortgage.
b. term mortgage.
c. purchase money mortgage.
d. second mortgage.
15. Qualifying for a conventional or FHA mortgage loan is heavily based on which two ratios:
a. housing expense and nonhousing expense to monthly gross income.
b. housing expense and total obligations to monthly net income.
c. total obligations and nonhousing expense to monthly net income.
d. housing expense and total obligations to monthly gross income.
16. For FHA loans, the applicant's monthly ratio of housing expense to gross income cannot exceed:
a. 28 percent.
b. 36 percent.
c. 31 percent.
d. 41 percent.
17. Analyzing a borrower's credit position to determine whether the borrower will be satisfactory to
a lender is the process performed by the mortgage banker known as:
a. servicing.
b. brokering.
c. qualifying.
d. leveraging.
18. All of the following items would be considered as income in evaluating a loan application
a. salary.
b. a gift.
c. dividends and interest.
d. alimony and child support.
19. A mortgage may be regarded as a conveyance of property coupled with a:
a. defeasance clause.
b. release clause.
c. reddendum clause.
d. habendum clause.
20. Mr. Beyer signs an agreement to purchase real estate whereby he acquires the right of possession
but not legal title and whereby failure to make payments by him will constitute breach of
contract resulting in forfeiture of all previous payments. This agreement is termed a(n):
a. installment contract.
b. contract for deed.
c. land contract.
d. all of the above.
Practice Quiz--Chapter 13

1. The mortgage banker:
a. qualifies applicants and services loans for the large financial institutions.
b. is usually employed by a commercial bank.
c. has contributed to the creation of capital deficient areas.
d. is another name for mortgage broker.
2. The most important group of primary market participants in the single-family loan market are:
a. commercial banks.
b. insurance companies.
c. savings associations.
d. mortgage brokers and mortgage companies.
3. The major source of funds for large commercial developments is:
a. savings associations.
b. commercial banks.
c. life insurance companies.
d. mutual savings banks.
4. Two points are approximately equal to:
a. 2 percent.
b. $200.
c. 1/4 of 1 percent.
d. 1/8 of 1 percent.
5. In the secondary mortgage market:
a. individual lenders make loans to financial institutions.
b. second mortgages are made to risky borrowers.
c. second mortgages are sold to banks and savings.
d. fust mortgages are bought and sold.
6. A capital deficit area has:
a. more potential loans than the available local money supply.
b. too many mutual savings banks.
c. more banks than savings.
d. a large pool of wealth.
7. Disintermediation occurs when:
a. loans exceed deposits in financial institutions.
b. depositors withdraw more than they deposit.
c. money market interest rates are low.
d. the Federal Reserve Board pursues an "easy" money policy.
8. Tight money means generally:
a. lower interest rates and more money available for loans.
b. higher interest rates and more money available for loans.
c. lower interest rates and less money available for loans.
d. higher interest rates and less money available for loans.
9. The function of mortgage brokers involves:
a. selling mortgages.
b. bringing together lenders and borrowers for a fee.
c. making mortgage loans which are usually resold to an institutional lender.
d. making mortgage loans by real estate brokers.
Practice Quiz--Chapter 14
1. How much documentary stamp tax must be paid on a deed conveying real property for a price of
$105,550 (other than in Dade County)?
a. $739.20.
b. $633.60.
c. $738.85.
d. $633.30.
2. Broker Bob and sales associate Jim agree that Jim will receive 60% of all commissions Jim
generates for the company. Broker Charli has listed a home with a 7.5% commission which Jim
has sold for $125,000. Charli's listing offered to share the commission 50/50 with any
cooperating broker who sold the house. How much will sales associate Jim earn on this sale?
a. $5,625.00.
b. $1,875.00.
c. $2,812.50.
d. $3,750.00.
3. A builder purchased a parcel of land measuring 1,452' by 1,200' for $3,000 per acre. The builder
paid the seller 29% in cash, assumed a $50,000 fust mortgage and the seller took back a second
for the rest of the sales price. The seller must pay how much documentary stamps on the deed?
a. $660.
b. $840.
c. $720.
d. $600.
4. Ms. Harr and her partners have sold a parcel of land they own for $12,000 per acre. Ms. Harr
received $480,000 for her 2/5 share of the sale price. What was the total sale price of the
a. $ 192,000.00.
b. $ 1 ,200,000.00.
c. $ 800,000.00.
d. $ 288,000.00.
5. Seller Steve sold two (2) forty (40) acre parcels of property for $50,000 per acre each. On Parcel
"A" Steve made a 10% profit and on Parcel "B" he lost 10%. What was Steve's net profit or loss
on the two sales.
a. $ 22,222.22
b. $-18,818.82
c. $-40,404.04
d. No Loss/No Gain
6. Dick purchased a piece of property which measured 750' wide by 125' deep for $100 per front
foot. Dick subdivided the property into six (6) 125' by 125' lots which he sold for $15,625 each.
What was Dick's percentage of profit or loss on the sales?
a. 25% profit.
b. 20% loss.
c. 20% profit.
d. 25% loss.
7. Mr. and Mrs. Lovebirds obtained a mortgage loan of $41,000 at 9 1/2% for 30 years. Monthly
payments will be $344.75 including principal and interest. What portion of the second month's
payment will be paid on the principal?
a. $20.17.
b. $32.44.
c. $20.33.
d. $38.91.
8. Mr. No Account sold his home to Mr. Goody Two Shoes for $89,750 with one half cash and Mr.
No Account took back a first mortgage for the other half. They each agreed to pay taxes on the
instruments in accordance with the provisions of the contract, which reflects the usual and
customary allocation of these costs between the buyer and the seller. Which of the following is
a. Mr. No Account paid $628.25, Mr. Shoes paid $246.95.
b. Mr. No Account paid $628.60, Mr. Shoes paid$ 89.80.
c. Mr. No Account paid $628.60, Mr. Shoes paid $246.90.
d. Mr. No Account paid $628.25, Mr. Shoes paid $157.15.
9. How much intangible tax must be paid on a $90,000 loan secured by a mortgage?
a. $ 90.00.
b. $ 900.00.
c. $1,800.00.
d. $ 180.00.
10. How much documentary stamp tax must be paid on an assumed mortgage of $60,000.
a. $210.00.
b. $192.00.
c. $120.00.
d. $ 0.00.
11. A house has been appraised at $96,000. The buyer has qualified for a conventional mortgage
with an 80/20 LTV and a 4 point discount. How much must be paid to the lender as discount?
a. 112%
b. $3,072.00.
c. 4%
d. $3,840.00.
12. If the current month's interest on a loan is $712.50 and the annual percentage rate of interest is
9.5%, what was the principal balance of the loan at the beginning of this month?
a. $ 75,000.00.
b. $ 80,000.00.
c. $ 85,000.00.
d. $ 90,000.00.
13. Closing on a property was June 9 and the combined taxes were $978. Using the 365 day method
with closing day belonging to the seller, how much was credited to the buyer?
a. seller credits buyer with $428.71
b. seller credits buyer with $431.98
c. buyer credits seller with $549.40
d. buyer credits seller with $546.02
14. A lot is 660' wide and 1,320' deep and sells for $10,890 per acre. What is the price per square
a. $ 2.50.
b. $ .50.
c. $ 4.00.
d. $ .25.
15. A Certificate of Mortgage will usually be obtained by the buyer's attorney or broker from the:
a. mortgagor.
b. seller.
c. mortgagee.
d. public records.
16. The seller usually pays all of the following expenses except:
a. documentary stamp tax on deed
b. recording of new mortgage
c. brokerage commission
d. abstract continuation
17. The document that governs closing arrangements is the:
a. deed.
b. mortgage.
c. listing contract.
d. contract for sale.
18. How is a binder deposit entered on a closing statement?
a. debit to buyer
b. credit to buyer
c. debit to buyer and credit to seller
d. credit to buyer and debit to seller
19. The state documentary stamp tax on deeds is usually paid by:
a. sellers.
b. buyers.
c. brokers.
d. attorneys.
20. How is the brokerage commission usually entered on a closing statement?
a. credit to buyer
b. debit to buyer
c. credit to seller
d. debit to seller
21. The balance due from the buyer on a composite closing statement is paid to whom?
a. the seller
b. the mortgagee
c. the closing agent
d. the broker
22. The balance due the seller on a composite closing statement is paid by whom?
a. the buyer
b. the mortgagee
c. the closing agent
d. the broker
Practice Quiz--Chapter 15
1. An appraiser is usually concerned with estimating:
a. book value.
b. market value.
c. insurable value.
d. condemnation value.
2. Property sold at auction to collect back taxes would probably not be sold at market value
a. the property won't be exposed for a reasonable time in the market place.
b. the buyer would not be aware of all of the uses.
c. the tax sale will leave a cloud on the title.
d. the book value would not reflect the back taxes.
3. A necessary ingredient for a sale price to equal market value is:
a. an exclusive listing.
b. proper zoning for highest and best use.
c. clear title.
d. willing and informed buyer and seller.
4. One cannot usually rely upon the cost of real estate to estimate its value because:
a. past costs may be difficult to determine.
b. costs change with time.
c. many factors other than cost affect value.
d. real estate costs increase faster than others.
5. An overimprovement would be represented by an addition to a home in which the:
a. cost of the improvement exceeds the amount the improvement adds to the market value.
b. cost of the improvement equals the amount the improvement adds to the market value.
c. cost of the improvement is less than the amount the improvement adds to the market value.
d. cost of the improvement exceeds the cost of the property.
6. In the real estate market, properties tend to be put to what type of use?
a. the use resulting in the highest population density
b. the most space efficient use
c. the highest and best use
d. the use that produces the greatest amount of dollar income
7. The appraisal approach which most closely reflects the definition of value is the:
a. cost depreciation approach.
b. sales comparison approach.
c. income capitalization approach.
d. land residual approach.
8. The most suitable appraisal approach for an apartment complex would be the:
a. cost depreciation approach.
b. comparable sales approach.
c. income capitalization approach.
d. land residual approach.
9. A warehouse property has an estimated reproduction cost new of $250,000. The land is worth
$50,000. An appraiser estimates physical deterioration to be worth about $50,000, functional
obsolescence to be $40,000 and external obsolescence to be -0-. How much would be the
property's appraisal value?
a. $300,000.
b. $290,000.
c. $250,000.
d. $210,000.
10. To utilize the cost depreciation approach, one must know the:
a. original cost of the improvement.
b. current book value of the improvement.
c. original cost of the improvement minus depreciation.
d. current reproduction cost of the improvement.
11. An annual income to be received in perpetuity, divided by the appropriate discount rate, equals
a. amount of money to be received.
b. present value of the income stream.
c. gross value.
d. depreciation rate.
12. Other things remaining unchanged, the lower the capitalization rate the:
a. lower the value.
b. higher the value.
c. riskier the investment.
d. lower the net receipts.
13. The present value concept adjusts for the:
a. riskiness of the investment.
b. time value of money.
c. value of current improvements.
d. relative length of the perpetuity.
14. Sunshine City, Florida, has recently built a new airport. Large jets must now fly low over
Fairview Heights. The market value of a new home in Fairview should be estimated by the:
a. cost of new houses being constructed in Fairview Heights.
b. comparable sales approach using recent sales in Fairview Heights.
c. comparable sales approach using recent sales in any neighborhood but adjusting for location.
d. income capitalization approach using capitalization rates derived from recent sales in
Fairview Heights.
15. In the income capitalization approach, the capitalization rate is determined by the:
a. appraiser's opinion.
b. relationship between sales prices and income in comparable transactions.
c. interest rate paid on Treasury bills.
d. reproduction cost of the property less depreciation.
16. A comparable property recently sold for $40,000. It has a garage worth approximately $2,000
while the property under appraisal has no garage. The properties are comparable in every other
respect. What adjustment should be made by the appraiser?
a. The price of the comparable property would be increased by $2,000.
b. The price of the subject property would be decreased by $2,000.
c. The price of the subject property would be increased by $2,000.
d. The price of the comparable property would be decreased by $2,000.
17. Real estate is considered a good hedge against inflation because:
a. real estate prices usually rise as fast as other prices.
b. the price of other goods rises faster than real estate.
c. real value tends to decline.
d. homeowners can avoid inflated rents.
18. The approach frequently used for insurance purposes is the:
a. cost depreciation approach.
b. market or sales comparison approach.
c. income capitalization approach.
d. land residual approach.
19. Three potential uses of a parcel of property would provide $4,000, $5,000 and $8,000 income to
the land respectively. If the appropriate capitalization rate is 10 percent, what would be the value
of the land?
a. $ 40,000
b. $ 50,000
c. $ 80,000
d. $170,000
20. A small apartment property is estimated to have potential gross income of $25,000. Vacancy
and collection losses are expected to average 5 percent over the life of the property. Operating
expenses are expected to average about 30 percent of effective gross income. An overall
capitalization rate of 12 percent is derived from market transactions of similar properties. What
is your estimate of the property's market value?
a. $208,333.
b. $138,542.
c. $197,917.
d. $145,833.
21. A house cost $89,500 when new four years ago. A 50 year useful life was assigned when it was
new. What is the depreciated value?
a. $82,340.
b. $ 8,950.
c. $ 7,160.
d. $80,550.
22. Three houses recently sold with the following amenities:
I. $112,500.00, 3br/2ba, good location, pool, garage
II. $ 96,500.00, 3br/2ba, fair location, pool, carport
m. $100,000.00, 3br/2ba, good location, carport
If a good location adds $10,000.00 and a garage adds $6,000.00 what would be the value of the
a. $ 6,000.00
b. $ 6,500.00
c. $10,000.00
d. $12,500.00
B, A, B
Practice Quiz--Chapter's 16 & 17
The following three questions are reprinted with permission of Real Estate Education Company
1. A custom 2-story home will have flagstone veneer installed along the lower portion of the
exterior walls. The type of framing most suited to this situation is:
a. post-and-beam.
b. platform.
c. balloon.
d. pier.
2. Mechanical equipment is sometimes placed on top of this type of roof:
a. gable.
b. hip.
c. gambrel.
d. built-up.
3. A three-wire electrical system to a home can supply a maximum of how many volts of electricity
for large appliances?
a. 240
b. 220
c. 120
d. 110
4. Real estate investment analysis is the process of relating the productivity characteristics of
properties to an investor's:
a. income tax situation.
b. required rate of return.
c. objectives.
d. need for cash flow.
5. Usually, the most important determinant of investment desirability (besides price) of vacant land
in an urban area is:
a. soil fertility.
b. location.
c. zoning.
d. size and shape.
6. The type of risk incurred by borrowing funds to purchase a property is:
a. business risk.
b. interest rate risk.
c. purchasing power risk.
d. financial risk.
7. The price of an apartment property is $1,000,000. It produces income (before depreciation) of
$140,000 per year and is expected to have the same value when the investor sells it. A mortgage
loan could be obtained at an interest rate of 15 percent. The effect of leverage would be:
a. positive.
b. negative.
c. neutral.
d. indeterminate.
8. In estimating the income tax liability produced by a property for its owner, which two expenses
are deductible that have not been deducted in calculating net operating income?
a. annual debt service and interest
b. annual debt service and depreciation
c. interest and depreciation
d. management and interest
9. One of the advantages to investing in real estate is that:
a. it is a liquid investment.
b. there is no need for management.
c. it is a hedge against inflation.
d. that there is little risk involved in making the investment.
10. All of the following are considerations which influence a building's investment value except:
a. market risk.
b. operating expenses.
c. exterior considerations.
d. interior considerations.
11. A disadvantage to owning investment real estate is that:
a. the investor cannot obtain a good rate of return.
b. there is a need for expert help.
c. the investor cannot utilize leverage in the purchase.
d. there is little or no equity buildup in the investment.
12. Conditions in the money market caused the cost of bond money to increase and thereby resulted
in an increase in long term financing costs in the form of higher mortgage rates. The increase in
mortgage rates resulted in a decrease in the value of investment properties. This is an example
a. purchasing-power risk.
b. business risk.
c. financial risk.
d. interest-rate risk.
13. All of the following valuation methods can be used for businesses and real estate except:
a. comparable sales analysis.
b. reproduction and replacement cost less depreciation analysis.
c. income capitalization analysis.
d. liquidation analysis.
14. Which of the following can be considered major components of a business enterprise/opportunity?
a. personal property
b. short-term liabilities
c. good will
d. all of the above
15. All of the following is/are true concerning real estate's role in business enterprise and
opportunity brokerage except:
a. real estate may be in the form of a lease.
b. real estate must be the primary component.
c. the character of the property and its functional utility are relatively more important than the
property's owner/lessee.
d. the sales associate must be licensed under chapter 475. F.S ..
16. Which of the following is often characteristic of the market for business enterprises versus the
market for real estate?
a. The market for business enterprises is typically wider in geographic scope.
b. The market for business enterprises is typically limited to the same state.
c. The market for real estate is typically wider in geographic scope.
d. None of the above.
17. Business enterprise and opportunity brokerage is similar to real estate brokerage in that:
a. there is almost always a sale of real property or an assignment of a long term lease involved.
b. the value of the business may be allocated among shares of corporate stock.
c. transactions typically involve the assumption of short-term as well as long-term liabilities of
the purchaser.
d. both a and b.
Practice Quiz--Chapter 18
1. Property taxes are most important to:
a. local government.
b. state government.
c. federal government.
d. they play no significant role.
2. The county appraiser determines:
a. the tax rate.
b. the tax amount.
c. property value for taxation.
d. how much homestead exemption one is entitled to.
3. The Florida Supreme Court has ruled that property must be valued for tax purposes at the:
a. most recent sale price.
b. most recent sale price minus depreciation.
c. current "quick sale" price.
d. current just value.
4. Greenbelt laws:
a. require farm land in or near an urban area to be valued the same as more distant farm land.
b. help to raise the local tax base.
c. provide for the best use of the land in an economic sense.
d. prevent land from being withheld from development.
5. Greenbelt laws have been abused by:
a. speculators posing as farmers.
b. overzealous environmentalists.
c. developers seeking greater density.
d. the Florida Nurserymen's Association.
6. In order to receive homestead protection on a particular house, a person must meet all of the
following requirements except:
a. be a Florida resident.
b. live in that house all year.
c. file each year a declaration of homestead.
d. use that house as his principal place of residence.
7. One "mill" equals:
a. one-tenth of a dollar.
b. one-hundredth of a dollar.
c. one-tenth of a cent.
d. one-hundredth of a cent.
8. An owner of property, in Florida, located outside of any city must pay property taxes levied by
a. local flood control district.
b. nearest city whose services he or she uses.
c. local school board.
d. State of Florida.
9. Special assessments are used:
a. to repay school board bonds.
b. to pay for sidewalks, sewers and other specific improvements.
c. when the city's expenditures exceed their budget and they need more revenue.
d. when the city desires special amenities like coliseums and new public structures.
10. A tax lien is prior to:
a. all other liens.
b. all liens except mechanics liens.
c. all liens except mortgage liens.
d. only those liens filed after the tax lien.
11. If property taxes are not paid the:
a. county forecloses.
b. county property appraiser may attach the wages of the property owner until the taxes plus
interest are paid.
c. lien is auctioned off as a tax certificate.
d. property is condemned by the county sheriff.
12. A property owner whose taxes are in default must fail to pay taxes for what period before
possible foreclosure?
a. 30 days
b. 60 days
c. 6 months
d. 2 years
13. A street is to be paved and gutters installed in front of your property. The city assesses propert)
owners 75 percent of the cost of such improvements which are estimated to be $60 per running
foot. Your property has 100 feet of frontage on one side of the street. How much will be your
special assessment?
a. $6,000
b. $4,500
c. $2,250
d. $1,000
14. The Federal income tax is related to real estate in that:
a. the income tax is levied directly against property.
b. the tax must be paid on income derived from the use of property.
c. the property tax is related to the owner's income.
d. property subject to the property tax must produce income.
15. There is a millage cap in Florida which determines:
a. how much taxes one must pay.
b. the maximum assessment on property.
c. the maximum taxes to special assessments.
d. the maximum tax rate.
16. The Value Adjustment Board:
a. adjusts property values each year to reflect changing conditions in local real estate.
b. changes the tax rate to insure a balanced budget.
c. acts as an appeal board for those contesting their assessment.
d. all of the above.
17. Depreciation may be a source of tax shelter because:
a. it is a noncash expense.
b. properties do not depreciate.
c. depreciation expense for tax purposes is greater than the actual loss of a property's value.
d. the actual loss of a property's value is greater than allowable depreciation expense.
Practice Quiz--Chapters 19 & 20
1. The main purpose of a market system is to determine:
a. who will produce, who will consume, when it will be produced.
b. what will be produced, when will it be produced, how will it be produced.
c. what will be produced, who will produce it, who will get to consume it.
d. when will it be produced, who will consume it, what will be produced.
2. All of the following characteristics apply to the real estate market except:
a. limited number of buyers and sellers.
b. heterogeneity of properties.
c. little or no external influence.
d. relatively large amount of capital is required.
3. With respect to a shift in demand for real estate, the market reacts:
a. relatively slowly.
b. relatively quickly.
c. proportionate in time.
d. unpredictably.
4. Demand variables in the real estate market are:
a. price, income, population, credit and consumer preferences.
b. price, income, production costs and credit.
c. income, production costs, population and productivity.
d. consumer preferences.
5. A home builder is which of the following with respect to real estate markets?
a. monopolist
b. competitor
c. demander
d. supplier
6. The desire plus the ability to pay for an economic good is:
a. effective demand.
b. effective control.
c. the supply function.
d. monopolistic.
7. A good indicator of the relationship between supply and demand for residential real estate is:
a. the demand curve.
b. the capitalization rate.
c. population growth trends.
d. the vacancy ratio.
8. Which result is most characteristic of a real estate market in its attempt to meet an increase ir
a. equilibrium between supply and demand continues at the previous supply level
b. an oversupply relative to previous levels of supply and demand will occur
c. high vacancy ratios will occur
d. supply will tend to increase over time to accommodate the demand
9. The decision of what is to be produced in a free enterprise system is determined by:
a. the President.
b. Congress.
c. producers themselves.
d. demand by consumers.
10. Usually local planning boards are composed of:
a. lay members representing a cross section of the community.
b. professionals from each of the local planning authorities.
c. the city and county commission.
d. local developers and representatives of local utilities.
11. Cities hire professional city planners to:
a. make new zoning laws.
b. inspect houses and construction.
c. advise elected officials.
d. approve zoning requests.
A, C
12. The master plan or comprehensive plan provides a(n):
a. unchanging, inflexible pattern for future development.
b. future use for each piece of land.
c. means to stop growth.
d. guide for an area's desired and expected future growth.
13. The purpose of the Board of Adjustment is to:
a. compensate property owners for losses due to zoning changes.
b. deal with variances and special exceptions.
c. make alterations in the comprehensive plan.
d. enforce zoning regulations.
14. Land uses which existed prior to and are not permitted under current zoning in an area are
a. variances.
b. nonconforming uses.
c. special exceptions.
d. grandfather uses.
15. The basic justification for the control of land uses (zoning) is that:
a. the use of one property may affect the value of other properties.
b. the country is moving toward socialism.
c. it enables the plans of professional planners to be implemented.
d. some land would not otherwise be used.
16. The basic idea behind the creation of the concept of zoning was:
a. to make land less expensive for businesses.
b. to develop a master plan for cities.
c. to raise construction standards.
d. to protect single-family home owners.
17. Residential zoning categories are usually divided according to:
a. lot size.
b. dwelling size.
c. type of use.
d. density.
18. Single-family residential categories are set by specifying the:
a. type of use.
b. minimum lot size.
c. units per acre.
d. parking requirements.
19. Multi-family residential categories are set by:
a. type of use.
b. minimum lot size.
c. units per acre.
d. parking requirements.
20. Commercial categories are set by specifying the:
a. type of use.
b. minimum lot size.
c. units per acre.
d. parking requirements.
21. The power to enforce zoning comes from:
a. the protection of health and welfare clause of the Constitution.
b. the Department of Health, Education and Welfare.
c. the Department of Housing and Urban Development.
d. the local police department.