Florida Real Estate Exam Questions 5

Front 1

A real estate sales associate has her license placed with Acquire Realty. Under what circumstances can this sales associate also work for Dolphin Realty on weekends selling condominiums for compensation?

Back 1

Never

Front 2

The clause in a deed that indicates the type of estate in a property is known as the:

Back 2

Habendum clause

Front 3

Bill has a one-year lease on a home on St. George Island. Three months into his lease he decides to rent a spare bedroom to a friend. This type of arrangement is known as:

Back 3

Sublease

Front 4

Which of the following is considered an encumbrance but not a lien?

Back 4

Deed restriction

Front 5

Mr. Gunter, a resident of Naples, was purposely withholding the sale of a parcel of land to the local electric company which affected the future welfare of that fair community. The local electric company would have the right to acquire that property through its power of:

Back 5

Eminent domain

Front 6

Which of the following business entities can broker real estate?

Back 6

Corporation

Front 7

Bruno purchased a tax certificate and held it for two years. He can now:

Back 7

Request a tax deed auction

Front 8

The most accurate method of describing real property for irregularly-shaped parcels is the:

Back 8

Metes and bounds method

Front 9

A township is:

A. 6 miles square

B. 36 square miles

C. 36 sections

D. All of the above

Back 9

D. All of the above

Front 10

When a broker negotiates a commission on a property that will be listed, that commission rate is based on:

A. A standard commission rate set by the local Association of Realtors

B. A standard commission rate set by the Florida Real Estate Commission

C. The ultimate listed price of the property

D. Negotiating at the time of the listing between the broker and the seller

Back 10

D. Negotiating at the time of the listing between the broker and the seller

Front 11

Broker Al has a listing contract that allows him to put a sign in the seller’s yard and hold open houses on the weekends. Also, the seller has directed Broker Al to make the listing available to other brokers in town and has promised that he will not list with anyone else during the term of Broker Al’s listing. The seller, however, has reserved the right to sell the property directly without owing a commission to Al. This agreement would best be described as:

Back 11

An exclusive agency contract

Front 12

To be valid, a real estate sales contract must contain:

Back 12

Offer, acceptance, and communication of the acceptance back to the offeror

Front 13

If a buyer makes an offer and the seller makes a counteroffer, the buyer:

Back 13

Is no longer bound to the original offer

Front 14

The phrase “time is of the essence” means:

Back 14

Time deadlines must be strictly enforced

Front 15

In case of breach by the buyer, most real estate sales contracts include a provision that the earnest money be regarded as:

Back 15

Liquidated damages to the seller

Front 16

A banking practice in which lenders refuse to make loans in certain areas because of discriminatory reasons is known as:

Back 16

Redlining

Front 17

The Federal National Mortgage Association was originally created to purchase:

Back 17

FHA mortgages

Front 18

The mortgage clause that requires the lender to provide a satisfaction of mortgage is known as the:

Back 18

Defeasance clause

Front 19

A loan amortization schedule shows monthly payments consisting of both principal and interest payments. Which of the following statements is most correct regarding amortized loan payments?

Back 19

Principal portion of each payment increases each month

Front 20

Which of the following has loan limits?

Back 20

FHA insured mortgages

Front 21

On a national level, mortgage interest rates are most influenced by:

Back 21

Availability of lendable funds

Front 22

A seller sells an option to a broker to buy the seller’s property for $80,000. Before the option expires, the broker finds a buyer will to pay $92,000. The broker exercises the option and buys the property for $80,000. The next day, the broker sells the same property for $92,000. Which statement best applies?

Back 22

The broker did nothing illegal

Front 23

Which form must be signed by either the buyer or seller when changing from a single agency relationship to a transaction brokerage relationship?

Back 23

Consent to transition to a transaction broker

Front 24

Al, Bob, and Charlie purchased a property together as joint tenants. Bob later sold his 1/3 share to Don. Which of the following statements is correct about this situation?

Back 24

Al and Charlie are joint tenants and Don is a tenant in common

Front 25

Broker Bryan is involved in a dispute over an earnest money deposit between a buyer and a seller. He has notified the FREC of this situation, and the parties have decided the take the issue to court. This is known as:

Back 25

Litigation

Front 26

A real estate commission paid by the buyer is a:

Back 26

Debit to the buyer

Front 27

The real estate market is different from other types of markets because it is:

Back 27

Slow to respond to changes in supply and demand

Front 28

Which of the following properties would be considered immune from taxation?

Back 28

Escambia county courthouse

Front 29

Dave recently deeded a property to his father in a life estate. Upon his father’s death, the property will transfer to the Naples Yacht Club in fee simple. What estate does the Naples Yacht Club have?

Back 29

Remainder estate

Front 30

Which of the following is not a legal requirement of a deed?

Back 30

Notarized

Front 31

The four characteristics that create economic value are:

Back 31

Demand, utility, scarcity, and transferability

Front 32

The amount of money spent to create an improvement is called its:

Back 32

Cost

Front 33

When an appraiser adjusts the estimate of value on a property because of an outdated kitchen, it is known as:

Back 33

Functional obsolescence

Front 34

If the mortgagor is holding title, to which type of mortgage theory does that state subscribe?

Back 34

Lien theory

Front 35

The Congress of the United States declared a national policy of fair housing in Title VIII of the Civil Rights Act of 1968. This legislation is known as the Fair Housing Act and applies to which of the following?

Back 35

Residential real estate brokerage transactions

Front 36

The Truth-in-Lending Law, enacted to protect the consumer, is implemented by the Federal Reserve System through:

Back 36

Regulation Z

Front 37

A public offering statement must be provided to a potential buyer under the Florida Uniform Land Sales Practices Law if the subdivision contains:

Back 37

50 lots or more

Front 38

A broker moves his branch office to a new location because of business reasons. What must the broker do to meet the legal requirements of the license law?

Back 38

Request a new registration for the new location

Front 39

What will likely happen if the Federal Reserve System raises the reserve requirement?

Back 39

Interest rates will rise

Front 40

If a broker’s license expires, what will be the status of the licenses of any associates who have their licenses placed with that broker?

Back 40

Cancelled after 14 days

Front 41

Bill, who is an active sales associate, is employed by Broker Bob. Bill acquired a listing on May 20th. Bill was able to sell the property. Prior to closing, however, it was discovered that Broker Bob’s license had expired on March 31st. Does the seller owe a commission in this transaction?

Back 41

The seller owes no commission

Front 42

Heather, Sara, and Brenda are partners who own real estate together. They sell one of their buildings, and Heather handles the transaction. Since Heather does all of the work, the other partners agree to let Heather have more than her pro-rata share of the profits. They are careful, however, to identify Heather’s additional payment as a “fee for expenses” and not as a commission. Which of the following statements apply?

Back 42

Heather must have a real estate license to do this

Front 43

Sales Associate Joe is employed by Oak Harbor Developers to sell condominium units, and he will receive a commission of 3%. If Joe wishes to work at another development that Oak Harbor is developing, he should:

Back 43

Obtain a group license

Front 44

Tom listed his home for sale with Broker Sue for a six-month period in an exclusive right of sale listing contract. Two months into the listing, Tom becomes dissatisfied with Sue’s performance and lists the home with Broker Beth also. Broker Beth is able to sell the property within 30 days. Which of the following statements is most accurate?

Back 44

Tom owes a commission to both Sue and Beth because both have a listing contract on the property

Front 45

The owner of a property directs the broker not to sell his home to anyone who was not born in the United States of America. The broker should:

Back 45

Convince the owner to reconsider the instruction, and if that is not successful, withdraw

Front 46

Developer Fran wishes to develop a new subdivision in Orlando. Which of the following will be required for this to happen?

Back 46

A subdivision plat map approval

Front 47

A real estate broker who represented the seller as a single agent failed to point out a leaky roof to a prospective buyer who later bought the property. The buyer then discovered the leak when it rained and filed charges against the broker. The broker might be guilty of:

Back 47

Concealment

Front 48

Broker White is working with a buyer in an attempt to sell one of White’s listing. White tells the buyer that he honestly feels the property will appreciate substantially over the next five years and, for that reason, the buyer should purchase the property right away. If the property does not increase in value, White could be found guilty of:

Back 48

Misrepresentation

Front 49

Which of the following secondary mortgage market participants is known as "Freddie Mac"?

Back 49

Federal Home Loan Mortgage Corporation

Front 50

Which of the following does NOT need to be on the brokerage official sign?

Back 50

Sales Associates' names

Front 51

A seller refuses to pay a legal commission upon the sale of his homestead. Who is legally entitled to pursue a litigation against the seller?

Back 51

Broker

Front 52

Which term best describes “Highest and Best Use”?

Back 52

Type of development that maximizes the value and potential of the site

Front 53

Sales Associate Sally accepts a cash deposit on Saturday night and deposits it into her personal checking account. On Monday morning, she promptly writes a check to her broker for the amount of the deposit indicating that, since there was a large sum of money involved, she felt much safer putting it in a place that was safe. Which statement best applies?

Back 53

She has commingled funds and may be disciplined by the FREC

Front 54

The seller is considered to be which of the following?

Back 54

The vendor

Front 55

What is the maximum interest rate that can be charged in a tax certificate sale?

Back 55

18%

Front 56

Brokerage real estate advertisements (including yard signs) must include the name of the:

Back 56

Brokerage firm

Front 57

The property appraiser is evaluating all the properties in the county for next year’s tax base. The local high school would be considered:

Back 57

Immune

Front 58

A broker opens a branch office in compliance with the law. The official sign by the front door must include:

Back 58

The name of the firm, the name of the broker, and the words “Licensed Real Estate Broker”

Front 59

Shifty Savings and Loan was forced to foreclose on a property that was in default. After the public auction, there were insufficient funds to pay the debt due. What right does the bank have under these conditions?

Back 59

Obtain a deficiency judgment for the balance

Front 60

Ted is a sales associate and wishes to invest in a real estate business. In which of the following can Ted invest?

Back 60

Either a or c

Front 61

Gracie purchased a rental list from a broker and fails to obtain a rental due to personal reasons. If Gracie demands her money back within 30 days from the date the list was purchased, which of the following would apply?

Back 61

The broker must make a 75% refund

Front 62

Sales Associate Samuel accepts a binder deposit made payable to him on Friday. Which of the following should Samuel consider appropriate?

Back 62

Endorse the check in Samuel’s name and give the check to his broker by 5:00 p.m. Monday

Front 63

Angela is a real estate broker working in her own name as a sole proprietor. In order to expand her business, she decides to operate as Gulf Atlantic Investments. Which of the following will be required in order for Angela to practice in this manner?

Back 63

File the new name with the Division of Real Estate

Front 64

A sales associate is due a commission in a transaction that has closed. The seller refuses to pay the commission, and the broker is involved in a litgation with the sellers. Which of the following best describes the appropriate actions of the broker?

Back 64

The broker is not required to pay the sales associate unless he receives the commission from the seller

Front 65

Which type of mortgage calls for the payment of interest only?

Back 65

Term mortgage

Front 66

Sales Associate Allen, working for Broker Bryan, wrote an ad for the local newspaper that is later found to be false and misleading. Who is legally responsible for this situation?

Back 66

Sales Associate Allen and Broker Bryan

Front 67

Broker Dave is representing the seller as a single agent. If he wishes to continue working in this capacity while working with buyers, which of the following statements would be correct?

Back 67

Dave can remain loyal to his seller and work with the buyer in a No Brokerage Relationship capacity

Front 68

Developer Dan purchased twenty acres of land to develop and pledged the entire parcel in one mortgage. In order for Dan to sell individual lots to separate buyers, his mortgage should contain a(n):

Back 68

Release clause

Front 69

A broker comes to work everyday in a "constant state of drunkedness", and is posing a threat to public safety. The DBPR should seek a:

Back 69

Summary suspension

Front 70

A real estate broker was once a member of the Appraisal Institute. He has recently let his membership lapse; however, he still continues to use the Appraisal Institute logo in his advertising. Which of the following statements is true?

Back 70

This is not permitted because it is technically false advertising

Front 71

If a loan is made on a parcel of land in a lien theory state, title to that parcel would be held by the:

Back 71

Mortgagor

Front 72

Broker Alec was able to combine eleven parcels of real estate under legal description and ownership in order to develop a medical complex. In doing so the land increased in value by $50,000. The combining of these parcels is known as:

Back 72

Assemblage

Front 73

A broker receives an offer with a $3,000 earnest money deposit. What should the broker do with the money?

Back 73

Deposit the money into a non-interest bearing account immediately, even if there has been no communications with the seller

Front 74

The unique location and immobility associated with a parcel of real estate is known as:

Back 74

Situs

Front 75

Broker Becky has listed Seller Sam’s home for a ninety-day period. Which type of agency relationship makes Seller Sam the broker’s principal?

Back 75

Single agent

Front 76

A complaint was filed against Broker Ann alleging that she had been committing fraud over the internet. For criminal prosecution, it will likely be reported to the:

Back 76

State Attorney’s Office

Front 77

If a sales associate or a broker student fails the required pre-license course exam, he or she must repeat the:

Back 77

Exam after waiting 30 days from failing the end-of-course exam

Front 78

Broker Sally discovers that her principal may have to declare bankruptcy. At what point can Sally legally disclose this information?

Back 78

It cannot be disclosed without permission from the principal due to the single agency duty of confidentiality

Front 79

If the seller defaults in a real estate sales contract, what legal action can the buyer to take to force the seller to close?

Back 79

Specific performance

Front 80

Can a sales associate work out of his or her own office located in the sales associate’s home?

Back 80

No, sales associates must work out of a broker's office

Front 81

A broker is preparing a CMA for a client. The broker should do all of the following except:

Back 81

Determine the reproduction cost of the subject property

Front 82

Broker Bill listed a property in Ocala and co-brokered the sale with Broker Dan. The entire commission was paid to Bill at closing. However, Bill was unable to pay Dan his share because of excessive offices expenses. Broker Bill could be found guilty of which of the following?

Back 82

Failure to account and deliver

Front 83

Shifty Savings and Loan is evaluating an applicant’s willingness to repay debt. Shifty S & L will be reviewing which of the following as part of the underwriting process?

Back 83

Credit report that includes credit scores

Front 84

A chain of title can best be described as a:

Back 84

History of ownership

Front 85

A real estate agent was involved in a difficult closing. Who of the following can pay this sales associate a bonus in this situation?

Back 85

The employing broker

Front 86

The Brokerage Relationship Disclosure Act applies to all of the following except

Back 86

A 100-acre ranch

Front 87

If a licensee renews his license on September 30, 2007, does no continuing education after that, and does not apply for renewal, how many years will it take for his license to be declared null and void?

Back 87

4 years

Front 88

Seller Sam was defrauded by Broker Barry in a real estate transaction. Sam is able to successfully sue Broker Barry and receive a judgment in the amount of $30,000, consisting of $15,000 in punitive damages and $15,000 in compensatory damages. How much can Sam collect from the real estate recovery fund?

Back 88

$15,000

Front 89

When a broker changes the address of the main office, who of the following must notify the Division of Real Estate?

Back 89

The broker

Front 90

A sales associate wishes to open up his own office in a separate location from the broker. Which of the following best applies?

Back 90

This cannot be done under any circumstances

Front 91

An investor purchased a warehouse that measures 150 ft. by 200 ft. and is four stories high. The county building codes requires that each floor contain 20% of the floor space to be used as walkways, stairwells, and elevators. Each rental cubicle is 10 ft. by 15 ft. How many are available for rental?

Back 91

640

Front 92

A rental property is scheduled to close on August 5th of the current year. Total rent for each month is $1,200 collected on the 1st. How will this problem appear on the closing statement if the day of closing belongs to the seller?

Back 92

$1,006.45 debit to the seller and a credit to the buyer

Front 93

Salesperson Steve, an agent for Broker Dave, is able to sell a parcel of vacant land described as the NE ¼ of the SE ¼ of Section 18 and the S ½ of the NW ¼ of Section 18, T1N, and R29W. The listing contract calls for an 8% commission to be paid to the broker, and the broker has agreed to pay Steve 60% of the commission if Steve is able to sell the property. Steve is able to secure a contract that is for $20,000 per acre. What is Broker Dave’s share of the commission?

Back 93

$76,800

Front 94

Mr. Wilson purchased a home from Mr. Smith on June 5th. The sales price was $179,500 and the buyer obtained an 85% loan in order to make the purchase. What are the total state taxes due on this transaction?

Back 94

$2,095.75

Front 95

A square parcel of land measures 700 feet on each side. How many acres are contained in this parcel?

Back 95

11.2

Front 96

Greg purchased a home in Tampa for $188,000. His down payment was $18,800, and the balance was secured by a note and mortgage. What was the loan to value ratio?

Back 96

90%

Front 97

A rental property rents for $300 per month. The lease term is four years. The broker is entitled to a commission for locating a tenant. The commission agreement calls for a commission of 6% for the rental income for the first year, 4% of the rental income for the second year, and 2% of the rental income for the last two years. How much was the earned commission for all four years?

Back 97

$504.00

Front 98

An investor purchased a small office building for $150,000 which contained four suites of equal size. The investor projects full occupancy with total operating expenses of $30,000. If the investor wishes to get a 20% capitalization rate of return, how much rent will he need to charge for each office each month?

Back 98

$1,250

Front 99

Becky recently purchased a duplex for $75,000. The property has monthly mortgage payments of $650, monthly rent of $625, and expenses of $60 each month. What is the property’s gross rent multiplier?

Back 99

120

Front 100

The county has decided to install new sewer lines throughout your subdivision. The cost is estimated to be $100 a linear foot. Your home sits on a lot that is 120 feet by 200 feet. If the county is prepared to pay 70% of the total cost, how much is your special assessment?

Back 100

$1,800