Test Prep A

Front 1

Which lien is an example of a specific lien?

Back 1

Vendor

Front 2

A transaction broker discloses to a buyer who is considering making an offer on listed

property that the seller will go as much as $10,000 lower than the listed price. Which duty

has the licensee violated?

Back 2

Exercise limited confidentiality

Front 3

An appraiser calculates his fee based upon a percentage of the subject property’s market

value. This is

Back 3

unethical and a violation of the Uniform Standards of Professional Appraisal

Practice’s ethics provision.

Front 4

Which statement is TRUE regarding VA loans?

Back 4

VA loans do not have a due-on-sale clause.

Front 5

What township is located three tiers south and two ranges west of T3N R2W?

Back 5

T1S R4W

Front 6

A small neighborhood restaurant is allowed to continue to operate even though current

zoning ordinances do not allow commercial use. The property owner has what type of

exception to the zoning code?

Back 6

Nonconforming use

Front 7

Which instrument is used to transfer ownership of a mortgage from one company or

individual to another?

Back 7

Assignment of mortgage

Front 8

Which statement concerning tenant security deposits on residential leases is TRUE?

Back 8

Landlords may not commingle tenant deposits with their own funds unless they

post an appropriate surety bond.

Front 9

Planning commissions commonly do NOT have the final authority to decide on

Back 9

special exceptions.

Front 10

A home has excessive electric bills in the summer months due to single pane sliding glass

doors along the west wall. In this instance which type of depreciation will the appraiser

likely consider?

Back 10

Functional obsolescence

Front 11

Which type of window is the least energy efficient?

Back 11

Jalousie

Front 12

The Federal Reserve’s duties do NOT include

Back 12

regulating mortgage rates.

Front 13

New owners acquire residential property before January 1st of this year. The owners have

until what date in the current year to file for the Florida homestead tax exemption?

Back 13

March 1

Front 14

A group license

Back 14

allows a sales associate or broker associate employed by an owner-developer to

sell property for all the affiliated entities owned by the developer.

Front 15

Which statement is TRUE regarding a title company holding the escrow funds?

Back 15

Within ten business days after the deposit is due under the sale contract, the broker

must make a request in writing to the title company for a written verification of

receipt of the deposit.

Front 16

A contractor builds homes on several vacant lots in an established subdivision of 12- to

20-year-old homes. The contractor advertises the homes for sale to prospective buyers.

What type of residential construction is this?

Back 16

Spec homes

Front 17

When real property is pledged as security for a debt it is known as

Back 17

hypothecation.

Front 18

Which legal procedure is used to determine a fair price in an eminent domain action?

Back 18

Condemnation

Front 19

Which violation of real estate law is a misdemeanor of the first degree?

Back 19

Collecting a fee for inaccurate and out-of-date rental information

Front 20

A buyer and a seller are disputing a contract for sale and purchase. They agree to submit

the matter to a third party who will make a binding determination regarding the matter.

This type of settlement is called

Back 20

arbitration.

Front 21

A fractional piece of land less than a full quarter section located along the banks of a lake

is known as a

Back 21

government lot.

Front 22

Three brothers join together to purchase property. The brothers want their interest in the

property to go to their spouses in the event of their deaths. They have created which type

of estate or tenancy?

Back 22

Tenancy in common

Front 23

Which statement is TRUE regarding the federal telemarketing law?

Back 23

Real estate licensees may contact their former customers for up to 18 months

following the closing of a transaction, even if the customer’s name is on the

national registry.

Front 24

What is the statute of limitations for written contracts?

Back 24

5 years

Front 25

When leased property is sold the security deposits and advance rents

Back 25

must be transferred to the new property owner at closing.

Front 26

Risk of vandalism is classified as which type of risk?

Back 26

Static

Front 27

A lead-based paint disclosure must be given to

Back 27

tenants and buyers of all residential property built before 1978.

Front 28

Which property is exempt from property taxes?

Back 28

Air force base

Front 29

The law which requires lenders to provide borrowers with good faith estimates of probable

closing costs at the time of application for a loan is the

Back 29

Real Estate Settlement Procedures Act.

Front 30

A parcel of real estate has been left to a woman through her husband’s will for her use and

enjoyment during her lifetime, with the provision that the property goes to her stepson at

her death. What interest does the woman hold?

Back 30

life estate

Front 31

Placement of the windows is most important on which type of lot if the homeowner is

concerned about the possibility of vehicular headlights shining into the front windows?

Back 31

T-intersection

Front 32

Which individual is exempt from real estate licensure?

Back 32

Person who is appointed by a court of law to liquidate real estate held in an estate

Front 33

Property values have increased in a residential neighborhood approximately 8 percent per

year. An appraiser chooses a comparable sale that occurred six months ago in the same

neighborhood. Which adjustment will be required?

Back 33

Plus 4 percent for market conditions

Front 34

Martha, Ellen, and Howard purchased an investment property as joint tenants. Ten years

later Howard sold his interest in the property to Andrew. Andrew recently died. Who will

receive Andrew’s interest in the investment property?

Back 34

Andrew’s heirs

Front 35

The Florida Building Energy-Efficiency Rating Act does NOT require

Back 35

the seller, at the seller’s expense, to conduct an energy-efficiency rating of the

structure prior to closing.

Front 36

Which item is added to rental income to calculate effective gross income?

Back 36

Other income

Front 37

An administrative complaint is issued against a broker for failure to properly maintain his

escrow account. The attorneys for the DRE and the broker’s attorney reach an agreement

as to the penalty for the license law violation. This agreement is referred to as a

Back 37

stipulation.

Front 38

Which statement is TRUE regarding a fee waiver for military veterans?

Back 38

The fee waiver applies to all licenses issued by the Department of Business and

Professional Regulation.

Front 39

Which legal description contains 2.5 acres?

Back 39

SE¼ of SW¼ of SE¼ of NE¼ of Section 9

Front 40

Which variable influences the demand for real estate?

Back 40

Housing prices

Front 41

The four characteristics of value do NOT include which characteristic?

Back 41

Surplus

Front 42

A real estate firm has a property management agreement with a woman. A licensed sales

associate from the firm calls the woman to inform her that he has found a tenant for the

woman’s residence. The woman asks the sales associate, “Do they have dark skin?” How

should the sales associate reply?

Back 42

Respond that the tenant’s race is of no relevance, and furthermore, to base the

decision of whether to rent to a prospective tenant on race is a violation of the fair

housing laws.

Front 43

Which action associated with water rights will cause the uncovering of additional land due

to the gradual receding of water?

Back 43

Reliction

Front 44

The title to a parcel of real property is not effectively conveyed until a valid deed is

Back 44

voluntarily delivered and accepted.

Front 45

Which expense may NOT be deducted when calculating taxable income for an investment

property?

Back 45

Reserve for replacements

Front 46

A broker complied with an escrow disbursement order (EDO). Later, the buyer sued the

broker and the buyer was awarded a judgment of $25,000. The buyer’s attorney fees and

courts costs totaled $3,500. The real estate broker’s attorney’s fees totaled $4,000.

Punitive damages of $10,000 were also awarded by the court. What is the maximum

amount that can be paid from the Real Estate Recovery Fund as a result of the judgment?

Back 46

$32,500

Front 47

IRS regulations require buyers to withhold what percent of the gross sale price when

purchasing property from a foreign seller?

Back 47

10 percent.

Front 48

Which duty is ONLY required in single agent relationships?

Back 48

Full disclosure

Front 49

Which entity guarantees mortgage backed securities with the full faith and credit of the

U.S. government?

Back 49

B. Ginnie Mae

Front 50

Which solution is NOT a remedy for the breach of a real estate sale contract?

Back 50

D. Claim against the Real Estate Recovery Fund

Front 51

A closing is set for July 15. How will the property taxes be entered on the closing
statement?

Back 51

A proration debited to the seller and credited to the buyer

Front 52

Under the statute of frauds, which element is required for contracts pertaining to the

purchase and sale of real property (except for certain specific exceptions)?

Back 52

In writing

Front 53

Which statute gives a real estate broker lien rights against an owner’s net sale proceeds for

earned commission?

Back 53

Chapter 475, Part III, F.S.

Front 54

A sales associate received a prospect’s binder deposit on Tuesday morning. That afternoon

the sales associate presented the prospect’s offer, and it was accepted by the seller. The

sales associate turned the binder deposit over to his broker on Wednesday morning. The

broker has until the end of business on which day to deposit the check into the escrow

account?

Back 54

Friday

Front 55

A broker may reopen a branch office in the same location during the same license period

Back 55

by requesting a reissue of the branch office license.

Front 56

Which information must be disclosed to a prospective buyer regarding a particular

property?

Back 56

Cracks in the fireplace chimney that are a fire hazard

Front 57

A sales associate sold and closed on two homes and delivered the commission checks to
his broker on Wednesday. When the sales associate asked for his split of the commission
checks on Friday, the broker indicated that he had spent all of the money on overhead and
now had nothing with which to pay the sales associate. The broker can be charged with

Back 57

conversion.

Front 58

A residential real estate investment property is purchased for $300,000 with the land

valued at $70,000. Based on the IRS straight-line method depreciation deduction which

calculation is correct?

Back 58

Useful asset life of 27.5 years with depreciable basis of $230,000

Front 59

Mark Smith is preparing to open a real estate office. He has registered the trade name Fast

Sales. He has two sales associates, Betty Able and John Stone. What information is NOT

required to be included on the brokerage entrance sign?

Back 59

John Stone, sales associate

Front 60

The legal evidence that gives a purchaser the right of occupancy in a cooperative unit is a

Back 60

C. proprietary lease.

Front 61

The direction opposite South 20 degrees West in a metes-and-bounds description is

Back 61

North 20 degrees East.

Front 62

The term used to measure the amount of energy an electrical appliance consumes is

Back 62

wattage.

Front 63

Which property would be defined as residential real estate under Chapter 475, Florida

Statutes?

Back 63

Five acres of agricultural property

Front 64

One method of controlling the money supply is for the Federal Reserve to increase or

decrease the amount of funds member banks must set aside. What is this method called?

Back 64

Reserve requirement

Front 65

A local lender charges five discount points on a conventional mortgage loan. How much

will the discount points increase the return to the lender?

A. $100

Back 65

5/8 percent

Front 66

What is the state’s intangible tax on a new mortgage of $10,000?

Back 66

A. $20

Front 67

What is the legal term for a type of evidence that, unless refuted by evidence to the

contrary, will prove a case?

Back 67

Prima facie

Front 68

68. A broker received conflicting demands from the buyer and the seller for the earnest

money deposit. The broker unsuccessfully attempted to resolve the issue between the

parties to the contract. Eleven business days after receiving conflicting demands the

broker notified the Florida Real Estate Commission of the conflict. How many business

days does the broker have remaining to implement a settlement procedure?

Back 68

B. 19

Front 69

You are analyzing an investment property. You forecast the effective gross income to be

$396,000. The operating expenses for this property, including a $4,400 reserve for

replacements, total $176,000. What is the property’s net operating income?

Back 69

C. $220,000

Front 70

The earnest money deposit normally appears on the closing statement as a

Back 70

credit to the buyer.

Front 71

How does a quitclaim deed differ from a bargain-and-sale deed?

Back 71

The bargain-and-sale deed has a covenant of seisin.

Front 72

The constitutional homestead law protects real property from forced sale to satisfy which

type of delinquent debt?

Back 72

Personal loan to pay medical expenses

Front 73

Which requirement is one of the elements of a valid real estate contract?

Back 73

Legal purpose

Front 74

What is the per diem amount that Florida Real Estate Commission (FREC) members

receive for participating in official meetings and other FREC business?

Back 74

A. $50

Front 75

A DBPR investigator is authorized, in cases that involve a first-time offense of a minor

violation, to issue

Back 75

a notice of noncompliance.

Front 76

Who issues a recommended order at the conclusion of a formal hearing?

Back 76

Administrative law judge

Front 77

In lien theory states, the

Back 77

borrower has title to the property and the lender has a lien.

Front 78

Which item would be most likely classified as a fixture once incorporated into real

property?

Back 78

Chain link fence

Front 79

A buyer offered $225,000 for a seller’s property. The seller countered at $250,000. The

buyer did not accept the seller’s counteroffer. The seller told her broker that she was

revoking the counteroffer and accepting the buyer’s original offer. Which statement is

TRUE regarding this situation?

Back 79

The seller cannot now accept the original offer because it was killed by the

counteroffer.

Front 80

A license is ineffective when it is

Back 80

suspended.

Front 81

Which requirement must be met for individuals acquiring a Florida sales associate’s

license through mutual recognition?

Back 81

C. Pass a written Florida-specific real estate law exam with a grade of at least 75

percent

Front 82

Which business would be classified as a base industry?

Back 82

B. Coffee roasting plant

Front 83

A comparable property recently sold for $210,000. Compared with the subject property,

the comparable is built of superior materials valued at $10,000. The comparable also has

less square footage than the subject property, valued at $15,000. What is the adjusted sale

price of the comparable?

Back 83

C. $215,000

Front 84

Can an insurance company refuse to provide insurance coverage to applicants within a

particular neighborhood because of the racial and ethnic characteristics of the

neighborhood?

Back 84

No, to do so is redlining, which is a violation of the Fair Housing Act.

Front 85

An investor’s own funds used to purchase investment real estate are called

Back 85

equity.

Front 86

Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans

differ in that

Back 86

FHA insures the mortgage and establishes a maximum mortgage amount; VA

guarantees the mortgage and has no legislated down payment requirement.

Front 87

Which clause in a mortgage instrument allows the mortgagee to advance the due date of

the unpaid balance if the borrower defaults on the loan?

Back 87

Acceleration

Front 88

Which phrase, when used in credit advertising, is NOT considered a triggering term under

the Truth in Lending Act?

Back 88

“Below-market-rate financing available”

D. “Fixed-rate mortgage loans as low as 6 percent”

Front 89

Which clause in a deed indicates the duration of the estate being conveyed?

Back 89

Habendum

Front 90

A real estate agent has been licensed in Texas for one year. The licensee worked for a

Texas broker but recently moved to Florida. The agent wants to open his own brokerage in

Florida so he recently completed the Florida broker prelicense course. Is the Texas

licensee eligible to take the Florida broker license exam?

Back 90

No, the Texas licensee must earn at least 12 months additional real estate

experience before he qualifies to sit for the Florida broker license exam.

Front 91

A business owner has a five-year variable lease. The first year of the lease calls for rent of

$23.50 a square foot based on a beginning index of 189. The index increases to 194 at the

beginning of the second year. What is the new rental rate?

Back 91

B. $24.12

Front 92

A developer purchased two 135-front-foot lots for $22,900 net each and divided them into

three lots of equal front footage. The developer sold the lots for $230 per front foot.

Calculate the developer’s percentage of profit. (Round to nearest whole percentage point.)

Back 92

36 percent

Front 93

An appraiser has assigned the following weights to three adjusted sale prices:

Comparable 1: $429,500 45 percent weight

Comparable 2: $425,750 30 percent weight

Comparable 3: $410,900 25 percent weight

What is the reconciled estimated market value of the subject property?

Back 93

$423,725

Front 94

A duplex is scheduled to close on February 15 (not a leap year). The seller collected rent

for February at the first of the month amounting to $588 per unit. According to the

purchase and sale agreement, the buyer is due the rental income for the day of closing.

Calculate the proration using the actual number of days in the month.

Back 94

$588 credit to buyer; $588 debit to seller

Front 95

A multifamily unit consists of 10 two-bedroom apartments that rent for $900 per month

and 15 three-bedroom apartments that rent for $1,200 per month. The vacancy and

collection loss is estimated to be 6 percent. Management is 5 percent of effective gross

income. What is the annual vacancy and collection loss allowance for this property?

Back 95

D. $19,440

Front 96

You are appraising a three-year-old, single-family residence. The total square footage of

the livable area is 2,500. The garage is 500 square feet. According to figures obtained

from a cost-estimating service, the base construction cost per square foot of livable area is

$82 and $66 per square foot

structure.

Back 96

C. $238,000

Front 97

Property tax rates are: County 9.5 mills, City 8.8 mills, and School Board 9.5 mills. A

homestead has been assessed at $195,000 for tax purposes, and the owner has qualified for

homestead tax exemption. What is the homeowner’s savings resulting from the homestead

exemption?

Back 97

B. $1,152.50

Front 98

Buyers have obtained a mortgage loan of $122,000 at 81⁄2 percent interest. The loan will

be amortized by equal monthly payments of $938.07 over 30 years that include principal

and interest. How much of the buyers’ second month’s payment will be applied to

principal?

Back 98

B. $74.43

Front 99

A prospective borrower is considering applying for a FHA-insured mortgage loan. The

borrower has an estimated monthly housing expense of $1,486. His total monthly

obligations are $2,050. If the borrower’s gross income is $98,400, what is his monthly

housing expense ratio? (Round answer to nearest whole percent.)

Back 99

18 percent

Front 100

Calculate all applicable documentary stamp taxes and intangible taxes associated with

financing the transaction for a property located in Pinellas County.

Purchase price: $67,550

Earnest money: 4,000

Recorded first mortgage (assumed): 27,800

Second mortgage (new): 14,700

Cash at closing: 21,050

Back 100

B. $178.15