End Of Exam Practice Test

Front 1

Leasehold estates do NOT include

Back 1

a remainder estate.

The answer is A REMAINDER ESTATE. The other choices all concern lease estates. A remainder estate is associated with a life estate.

Front 2

The license of the only broker for a firm was revoked. What action, if any, will be taken against the sales associates' licenses registered under the broker?

Back 2

The licenses will be placed in involuntary inactive status.

Front 3

Essential elements of a deed do NOT include

Back 3

signature of a competent grantee.

The answer is SIGNATURE OF A COMPETENT GRANTEE. A competent grantor (not grantee) must sign the deed.

Front 4

The Statute of Frauds applies to

Back 4

The answer is INSTRUMENTS OF CONVEYANCE OF REAL PROPERTY. The Statute of Frauds requires that certain real estate instruments and contracts affecting title to real property be in writing to be enforceable.

Front 5

Which item below is NOT a requirement under RESPA?

Back 5

The answer is GIVE MORTGAGE APPLICANT A LIST OF COMPETING LENDERS SO THAT THE CONSUMER CAN COMPARISON SHOP FOR THE BEST RATE. The statement is false. RESPA does not require the lender to give mortgage applicants a list of competing lenders.

Front 6

A man owns a farm in fee simple. He deeds the farm to a friend until the friend dies, at which time a woman will acquire a fee simple title to the farm. The woman's interest in the farm is a

Back 6

The answer is REMAINDER ESTATE. The remainderman owns a remainder estate while the life estate exists.

Front 7

In the cost-depreciation approach, estimating accrued depreciation involves estimating

Back 7

The answer is THE LOSS IN VALUE OF THE IMPROVEMENTS. Depreciation is loss in value due to physical deterioration, functional obsolescence, and external obsolescence. Depreciation applies to the structure only.

Front 8

A developer purchased three oceanfront lots, each measuring 75 by 110 feet, for $20 per square foot. The developer later sold the lots for $200,000 each. What was the developer's percentage of profit on the sale of the three lots? (Round to nearest percent.)

Back 8

The answer is 21 PERCENT. The solution is: 75 feet × 110 feet = 8,250 square feet; 8,250 × $20 per square foot = $165,000 cost per lot; $200,000 sale price – $165,000 = $35,000 amount made per lot; $35,000 ÷ $165,000 = .2121212 or 21 percent.

Front 9

A real estate licensee is obligated to communicate to the seller

Back 9

The answer is ALL ORAL AND WRITTEN OFFERS, REGARDLESS OF HOW WORTHY THEY MAY BE IN THE BROKER'S OPINION. Unless a party has previously directed the licensee otherwise in writing, the licensee must present all offers in a timely manner.

Front 10

Business brokers appraise businesses using appraisal methods similar to real estate appraisal EXCEPT for the additional technique of

Back 10

The answer is LIQUIDATION ANALYSIS. Liquidation analysis is unique to business appraisal.

Front 11

The Florida Real Estate Commission is empowered by law to

Back 11

The answer is REPRIMAND, FINE, OR OTHERWISE DISCIPLINE LICENSEES. Possible administrative penalties include denial of an application for a license; refusal to recertify a license for renewal; revocation of a license; suspension of a license; fine; probation; reprimand; citation; and notice of noncompliance.

Front 12

Federal savings associations that are members of the Federal Home Loan Bank System are regulated by the

Back 12

The answer is OFFICE OF THRIFT SUPERVISION. The Office of Thrift Supervision (OTS) regulates member federal savings associations.

Front 13

The law that requires that the annual percentage rate be disclosed to consumers is the

Back 13

The answer is TRUTH-IN-LENDING ACT. The Truth-in-Lending Act requires that lenders disclosure the annual percentage rate (APR) of interest and finance charges imposed on consumers.

Front 14

A type of roof style that slopes from the ridge to four opposite sides and allows continuous eave venting around the entire house perimeter is the

Back 14

The answer is HIP. A hip roof peaks at the center ridge but extends downward on four opposite sites.

Front 15

Which information must be disclosed to all prospective buyers?

Back 15

The answer is THE HOME IS SITUATED IN A FLOOD-PRONE AREA. Whether a person was murdered, infected with HIV, or is Hispanic is not a material fact that affects the value of real estate. The fact that the home is in a flood prone area is a material fact A real estate brokerage company is a transaction broker for a buyer. The buyer wants to purchase a new home so the sales associate takes him to three model centers listed by three competing real estate companies. The sales associate must give the no brokerage relationship notice tothat affects the value of the property and must be disclosed to prospective buyers.

Front 16

A real estate brokerage company is a transaction broker for a buyer. The buyer wants to purchase a new home so the sales associate takes him to three model centers listed by three competing real estate companies. The sales associate must give the no brokerage relationship notice to

Back 16

The financial term applied to the use of borrowed funds to finance the purchase of an office building

Front 17

The financial term applied to the use of borrowed funds to finance the purchase of an office building is

Back 17

The answer is LEVERAGE. Leverage is the use of borrowed funds to finance the purchase of an asset.

Front 18

Which statement does NOT describe a planned unit development?

Back 18

The answer is CLUSTERING HOMES ON SMALLER LOTS RESULTS IN HIGHER OVERALL DENSITY OF DWELLING UNITS COMPARED WITH CONVENTIONAL DEVELOPMENT. Clustering results in the same overall density as in a conventional development. The other three descriptions apply to planned unit developments.

Front 19

Insulation is rated by its ability to resist

Back 19

The answer is HEAT FLOW. Insulation is rated (R-value) by its ability to resist heat flow.

Front 20

The government survey method of legal description

Back 20

The answer is HAS AS A BASIS A PRINCIPAL MERIDIAN AND A BASE LINE. The federal government selected certain north-south longitudes as principal meridians and certain east-west latitudes as base lines.

Front 21

Depreciation (cost recovery)

Back 21

The answer is IS AN ALLOWABLE DEDUCTION THAT REQUIRES NO CURRENT OUTLAY OF CASH. Depreciation is a key deduction because it reduces taxable income without involving a cash outlay.

Front 22

A real estate broker who is a single agent of a buyer or a seller does NOT have which duty to the principal?

Back 22

The answer is LIMITED CONFIDENTIALITY, UNLESS WAIVED IN WRITING BY A PARTY. Limited confidentiality is a duty associated with a transaction broker relationship.

Front 23

In relation to Section 1 of a township, Section 12 is due

Back 23

The answer is SOUTH. To answer this question requires knowing how to number a township.

Front 24

A title theory state is one in which a mortgage

Back 24

The answer is TRANSFERS TITLE TO THE LENDER OR ESCROW AGENT UNTIL THE LOAN IS PAID. Title theory is a legal concept that vests title to mortgaged property in the name of the mortgagee (lender) or a third party.

Front 25

The following taxes were paid at the closing of a new home: $1,540 state documentary stamp tax on the deed, $693 state documentary stamp tax on the note, and $396 state intangible tax on the mortgage. What was the purchase price of the home?

Back 25

The answer is $220,000. The solution is: Part ÷ Rate = Value; $1,540 doc stamps on deed ÷ $.70 rate = 22,000 tax increments; 22,000 × $100 = $220,000 purchase price.

Front 26

Brokers should NOT accept the task of appraising a parcel

Back 26

The answer is IF THEIR FEES ARE CONTINGENT ON THE APPRAISED VALUE. To accept an appraisal assignment contingent on the appraised value is a violation of the USPAP.

Front 27

A single agent broker received an offer on a listed property at the seller's price and terms. Before informing the seller, the broker received a higher offer. The single agent submitted only the first offer, and the seller-principal accepted the offer. The broker

Back 27

The answer is HAS VIOLATED THE FIDUCIARY DUTY TO THE PRINCIPAL. The licensee has a fiduciary duty to present all offers to the principal.

Front 28

A broker's license was involuntary inactive for two years and one month. To operate again as an active licensee, the broker must complete

Back 28

The answer is FREC COURSE I AND PASS THE SALES ASSOCIATE'S LICENSING EXAM. The broker's license became null and void after two years. To operate again as a licensee, she must start over by completing the sales associate's prelicense course and then pass the state-licensing exam.

Front 29

A mortgage in which changes in the interest rate may cause changes in the monthly payment amount is called

Back 29

The answer is AN ADJUSTABLE-RATE MORTGAGE. An adjustable-rate mortgage is a financing technique in which the lender can raise or lower the interest rate (which in turn adjusts the payment) to a set index.

Front 30

If all legislated requirements have previously been met, an active broker in Florida may hold an active license in

Back 30

The answer is FLORIDA AND ANY OTHER STATE OR FOREIGN COUNTRY WHOSE LICENSING LAWS HAVE NOT BEEN VIOLATED. A broker may hold licenses in several states as long as the laws of each state are not violated.

Front 31

The formula to calculate the overall capitalization rate is

Back 31

The answer is NOI ÷ VALUE (OR PRICE). The formula to calculate a cap rate is net operating income divided by value equals rate.

Front 32

An example of an ad valorem tax is

Back 32

The answer is A PROPERTY TAX. Ad valorem means taxed according to value. Property taxes are calculated based on the just value of the property.

Front 33

Which expense is subtracted to derive NOI?

Back 33

The answer is VACANCY AND COLLECTION LOSSES. Vacancy and collection (V&C) losses are subtracted from PGI to derive EGI. V&C loss is one of the items deducted in a reconstructed operating statement to calculate NOI.

Front 34

A property closes on April 8, with the day of closing charged to the seller. The annual property taxes are $1,486. Which entry will appear on the closing statement for the property taxes?

Back 34

The answer is DEBIT TO SELLER AND CREDIT TO BUYER IN THE AMOUNT OF $398.98. Taxes are paid in arrears. Therefore, calculate number of days seller is responsible for paying: January (31) + February (28) + March (31) + April (8) = 98 days. $1,486 ÷ 365 days × 98 days = $398.98 seller owes, so debit seller and credit buyer.

Front 35

Which element is NOT essential in a valid real estate sale contract?

Back 35

The answer is AN EARNEST MONEY DEPOSIT. Although a binder deposit is desirable to protect the seller, it is not required to make a contract valid.

Front 36

A licensed real estate broker has a buyer who is interested in investing in income-producing property. The broker finds a property producing net income of $1,750 per month. The buyer will purchase the property if the buyer can get it for a price that will return 14 percent per year on her investment. If the desired 14 percent rate of return is regarded as a 14 percent capitalization rate, what will the buyer be willing to pay for the property?

Back 36

The answer is $150,000. The solution is: $1,750 monthly net income × 12 months = $21,000 NOI; $21,000 ÷ .14 cap rate = $150,000 target price.

Front 37

In Florida real property is assessed on January 1 of each year, and property taxes become a lien on the property on

Back 37

The answer is JANUARY 1, THE SAME YEAR. Property taxes become a lien on all real estate on January 1 each year

Front 38

Which term refers to a situation where during the early years of a loan the principal balance increases?

Back 38

The answer is NEGATIVE AMORTIZATION. Negative amortization is a financing arrangement whereby monthly mortgage payments are less than required to pay both interest and principal. The unpaid amount is added to the loan balance.

Front 39

When the Fed wants to ease a tight money supply, it may

Back 39

The answer is BUY TREASURY SECURITIES. When an increase in economic activity seems needed, the Fed buys securities, thereby releasing money back into normal circulation and increasing loanable funds.

Front 40

Which estate includes the right of survivorship?

Back 40

The answer is JOINT TENANCY. Right of survivorship means that when one co-owner dies, the deceased co-owner's share goes to the surviving co-owners such as in a joint tenancy.

Front 41

The seller instructs the listing broker NOT to show his home to members of a protected class. The broker informs the seller that this would be a violation of the Fair Housing Laws, but the seller is insistent. Which choice is the broker's best course of action under these circumstances?

Back 41

The answer is WITHDRAW FROM THE LISTING AGREEMENT. Licensees may not violate the law. For example, if a principal instructs a listing broker not to show the property or sell to a member of a particular minority or ethnic group, the broker cannot obey the principal's instructions because doing so would violate the law.

Front 42

Failure to comply with the Statute of Frauds may result in

Back 42

The answer is AN UNENFORCEABLE CONTRACT. The Statute of Frauds is a law that requires that certain real estate instruments and contracts affecting title to real property be in writing in order to be enforceable.

Front 43

Homeowners who have homestead exemption on their current home in either of the two preceding years can transfer up to what amount of their Save Our Home benefit to a new home?

Back 43

The answer is $500,000. A homesteaded property owner can transfer up to $500,000 of Save Our Home benefit to a new homestead.

Front 44

A sales associate who is employed by an owner-developer who owns properties in the name of various entities may be issued

Back 44

The answer is A GROUP LICENSE. A group license is issued to a sales associate or broker associate to work various properties owned by affiliated entities under one owner developer

Front 45

What would be the total required taxes for the loans on a $47,500 tract that sold with $10,000 cash down, a new second mortgage of $15,500, and an assumed mortgage of $22,000 that was previously recorded?

Back 45

The answer is $162.25. The solution is: Doc stamps on new note: $15,500 ÷ $100 increments × $.35 rate = $54.25; Doc stamps on assumed note: $22,000 ÷ $100 increments × $.35 rate = $77.00; Intangible tax on new mortgage: $15,500 × $.002 = $31.00; $54.25 + $77.00 + $31.00 = $162.25 taxes for the mortgage loans.

Front 46

Constructive notice is

Back 46

The answer is PROVIDED BY RECORDING IN THE PUBLIC RECORDS. Constructive notice is accomplished by recording the document in the public records.

Front 47

A buyer who obtains a mortgage loan that covers the purchase of a condominium plus furniture, appliances, and other personal property such as towels and kitchen utensils has a

Back 47

The answer is PACKAGE MORTGAGE. A package mortgage includes real and personal property.

Front 48

The mortgage clause that requires the lender to waive the right to a deficiency judgment against the borrower, relieving the borrower of personal liability to repay the loan, is referred to as

Back 48

The answer is AN EXCULPATORY CLAUSE. The exculpatory clause is a provision in a mortgage or note in which the lender waives the right to a deficiency judgment against the borrower and the borrower is relieved of personal liability to repay the loan.

Front 49

If a seller refuses to pay a broker sales commission owed after the residential property is sold, the broker may

Back 49

The answer is FILE A SUIT IN THE COURTS FOR THE COMMISSION. When a buyer or seller refuses to pay a broker's commission after it is earned, the broker may take action to collect by filing a suit against the party for the amount due.

Front 50

A person must hold an active real estate license if, for express or for implied compensation, the person

Back 50

The answer is ADVERTISES A LIST OF AVAILABLE RENTAL PROPERTIES. Advertising rental lists is one of the services of real estate that requires a real estate license.

Front 51

The Florida Real Estate Commission must notify which agency when it takes disciplinary action against any of the agency's licensees?

Back 51

The answer is DIVISION OF FLORIDA CONDOMINIUMS, TIMESHARES, AND MOBILE HOMES. The FREC must inform the Division of Florida Condominiums, Timeshares, and Mobile Homes when any disciplinary action is taken by the FREC against any of its licensees.

Front 52

A licensee makes a statement that is material to the transaction as if it were a fact when the licensee does NOT know if the statement is true or false, and the buyer relies on the statement. As a result of the statement made by the licensee, the buyer suffers damages. This situation constitutes

Back 52

The answer is FRAUD. All of the elements of fraud are presented here.

Front 53

An investor wanted to build a motel. A broker showed him three choice sites zoned hotel-motel. The investor promised to decide on a site in three weeks, so the broker took a two-week vacation. When the broker returned, the investor bought one of these sites. The broker sold the site, not knowing that the zoning on that site had been changed to industrial. Which is correct?

Back 53

The answer is THE BROKER IS GUILTY OF CULPABLE NEGLIGENCE. Culpable negligence is the term used to describe inadequate attention to duties and obligations.

Front 54

A broker who changes business address must notify the Commission of the address change within how many days?

Back 54

The answer is 10. The FREC requires that licensees notify the Commission in writing of any change in business address within 10 days after the change. The license ceases to be in force until the Commission receives proper notification.

Front 55

Which information is confidential?

Back 55

The answer is AN EXAMINEE'S GRADE ON THE STATE LICENSING EXAMINATION. Exam grades are considered confidential.

Front 56

A provision in all mortgages that allows the delinquent mortgagor to avoid foreclosure by paying all of the back mortgage payments, late penalties, and costs of collection up until the time of foreclosure sale is the

Back 56

The answer is EQUITY OF REDEMPTION. Equity of redemption is the right of a mortgagor, before a foreclosure sale, to reclaim forfeited property by paying the entire indebtedness

Front 57

A property has been assessed at $40,000. The city tax rate is 10 mills, the county tax rate is 9 mills, and the school board levy is 8 mills. The owner has qualified for and received homestead tax exemption. How much will the owner save from county taxes as a result of the homestead tax exemption?

Back 57

The answer is $225. The solution is: $25,000 homestead exemption × .009 county rate = $225.

Front 58

Three claimants have come before the Commission requesting relief from the Real Estate Recovery Fund. All three claimants were involved in the same real estate transaction. Payment for their claims, in the aggregate, is limited to

Back 58

The answer is $50,000. The maximum payment from the recovery fund for damages associated with a single transaction is $50,000.

Front 59

You have been hired to appraise the local public library building. The approach that is likely to be the MOST relevant is the

Back 59

The answer is COST-DEPRECIATION APPROACH. The cost-depreciation approach is particularly applicable for appraising special purpose properties.

Front 60

A woman has homesteaded her residence. Her home has an assessed value of $279,000. The woman is a nonveteran who is totally and permanently disabled due to a serious car accident. She is also legally blind. What is the cumulative tax exemption for county taxes on the homesteaded residence?

Back 60

The answer is $51,000. $25,000 base homestead exemption + $25,000 additional homestead exemption + $500 disability + $500 blind = $51,000.

Front 61

A broker received a $5,000 deposit from a buyer on Tuesday at 1 P.M. The seller will NOT be available until Monday. The broker's normal banking day is Monday. The broker is required to deposit the $5,000 before the end of

Back 61

The answer is BUSINESS ON FRIDAY. Brokers must deposit escrow funds no later than the end of the third business day following receipt of a deposit. The deposit was received on Tuesday, so the broker has Wednesday, Thursday and until the end of business on Friday.

Front 62

A licensed real estate broker has been hired by a lender to appraise a home for a buyer who has made application for an FHA loan. Which statement is TRUE regarding this situation?

Back 62

The answer is THE BROKER IS REQUIRED TO BE A STATE-CERTIFIED APPRAISER TO PERFORM THIS APPRAISAL ASSIGNMENT. A state-certified or licensed appraiser must prepare appraisal reports for any loans involving Fannie Mae, Freddie Mac, HUD, or VA.

Front 63

Which individual is NOT exempt from real estate licensure under F.S. 475?

Back 63

The answer is A BUSINESS BROKER WHO NEGOTIATES LEASES OF BUSINESS PROPERTY. A real estate license is required for dealing in business opportunities.

Front 64

Which statement concerning characteristics of the real estate market is FALSE?

Back 64

The answer is THE REAL ESTATE MARKET IS ORGANIZED AND CONTROLLED CENTRALLY. The market is unorganized and without central control.

Front 65

A broker has a listing priced at $120,000. An uninformed buyer offers her $125,000. The broker buys the property for $120,000, then sells it for $125,000. Which statement is FALSE?

Back 65

The answer is THIS IS LEGAL AS LONG AS THE BROKER WITHDRAWS FROM THE LISTING FIRST. A secret profit or overage is considered to be fraud, misrepresentation, concealment, and/or dishonest dealing and could expose the licensee to liability to both seller and buyer for the full amount of the secret profit, and might further give rise to disciplinary proceedings against the licensee.

Front 66

If you have located a township numbered T2S, R4E, the township due south of that township is

Back 66

The answer is T3S, R4E. The township number changes when moving south. Because it is further south (away from the intersection of the principal meridian and base line) the number is larger.

Front 67

A license becomes ineffective when it is

Back 67

The answer is SUSPENDED. License is ineffective when it is suspended

Front 68

A real estate license may be revoked or canceled without prejudice for which action?

Back 68

The answer is ISSUANCE OF A LICENSE BY MISTAKE BY THE COMMISSION. A license may be revoked without prejudice if it was issued through the mistake or inadvertence of the Commission.

Front 69

In a deed, the warranty of quiet enjoyment pertains to

Back 69

The answer is PEACEFUL POSSESSION UNDISTURBED BY OTHERS' CLAIMS OF TITLE. Quiet enjoyment is a provision in a deed guaranteeing that the buyer may enjoy possession of the property in peace and without disturbance by reason of other claims on the title by the seller or someone else.

Front 70

Which variable does NOT influence demand?

Back 70

The answer is AVAILABILITY OF CONSTRUCTION LOANS. Availability of construction loans influences supply.

Front 71

Local government exercises its greatest effect on the real estate business by

Back 71

The answer is USING ZONING, TAXATION, AND THE PLANNING PROCESS. Local government, through its police powers, come the many ordinances and regulations governing zoning, building codes, health standards, city planning, and rent controls. Property taxes provide the bulk of revenue for city and county governments.

Front 72

How much personal money may a broker place in a property management escrow account?

Back 72

The answer is $5,000. A broker may place up to $5,000 of personal or business funds in a property management escrow account.

Front 73

Which entity may NOT be registered as a real estate brokerage?

Back 73

The answer is CORPORATION SOLE. A corporation sole is an artificial or fictitious person formed by an ecclesiastical body and may not register as a broker.

Front 74

The documentary stamp tax on deeds is based on the

Back 74

The answer is ENTIRE SALE PRICE OF THE PROPERTY. Doc stamps on deeds are charged on the entire purchase price

Front 75

Which statement concerning tenancy by the entireties is FALSE?

A)

The deed must specifically state intent to create such a tenancy.

B)

It is a form of concurrent ownership.

C)

The estate includes right of survivorship.

D)

The property must be owned by a wife and her husband.

Back 75

The answer is THE DEED MUST SPECIFICALLY STATE INTENT TO CREATE SUCH A TENANCY. A tenancy by the entireties is automatically created (without special wording) when title is taken in the names of the husband and wife.

Front 76

The Statute of Limitations is the authority that outlines the

Back 76

The answer is PERIOD OF TIME DURING WHICH A CONTRACT MAY BE ENFORCED. The Statute of Limitations prescribes specific time restrictions for enforcement of rights by operation of law.

Front 77

The DBPR may issue which penalty for an initial offense of a minor violation by a licensee?

Back 77

The answer is NOTICE OF NONCOMPLIANCE. The DBPR may issue a notice of noncompliance as a first response to a minor violation by a licensee.

Front 78

A man successfully negotiated (and was paid for) the sale of a Federal Communications Commission license for a television station. He is NOT a licensed real estate broker or sales associate. The man

Back 78

The answer is HAS NOT VIOLATED F.S. 475. Individuals negotiating the sale, purchase, or lease of radio, television, or cable enterprises are exempt from real estate licensure, provided the sale or purchase does not involve the sale or lease of real property.

Front 79

The broker is a single agent of the seller. The principal has disclosed to the broker that the roof leaks, although there is no visible evidence of a water problem. The broker has satisfied her legal obligation to both the principal and all prospective buyers if she discloses

Back 79

The answer is THAT THE ROOF LEAKS. The licensee must disclose all known facts that materially affect the value of residential real property and are not readily observable.

Front 80

Sales associate Terry Stoufer may have which information entered on her license, if applicable?

Back 80

The answer is TERRY STOUFER, LLC. Sales associates may not use trade names.

Front 81

A transaction broker does NOT have which duty?

Back 81

The answer is FULL FIDUCIARY DUTIES TO BOTH THE BUYER AND THE SELLER. A transaction broker has all of the duties listed except for full fiduciary duties.

Front 82

A tenant signed a lease for ten years requiring a monthly base rent of $1,900, plus 2 percent of all monthly gross sales volume over $95,000. The tenant also must pay all property taxes, insurance, and other costs normally considered property owner's costs. This is a

Back 82

The answer is NET LEASE. A net lease requires that the tenant (lessee) pay all property costs, including those usually regarded as owner expenses (taxes, insurance, mortgage interest, etc.).

Front 83

A man earned a $7,500 commission by selling a coin-operated laundry business, which has six more years before the expiration of its present lease. The man

Back 83

The answer is MUST BE REGISTERED WITH THE FLORIDA REAL ESTATE COMMISSION AS A REAL ESTATE LICENSEE. A real estate license is required for selling businesses.

Front 84

A man earned a $7,500 commission by selling a coin-operated laundry business, which has six more years before the expiration of its present lease. The man

Back 84

The answer is MUST BE REGISTERED WITH THE FLORIDA REAL ESTATE COMMISSION AS A REAL ESTATE LICENSEE. A real estate license is required for selling businesses.

Front 85

Title to real property is technically conveyed when the deed is

Back 85

The answer is VOLUNTARILY DELIVERED AND VOLUNTARILY ACCEPTED. Title to real property is conveyed when the deed is voluntarily delivered to and accepted by the grantee.

Front 86

A comparable property has one more bedroom ($8,000) and is on a slightly larger lot ($2,000) than the subject property. The comparative market analysis requires a net adjustment of

Back 86

The answer is MINUS $10,000 TO THE COMPARABLE PROPERTY. Adjustments are always made to the comparable, not to the subject. (-$8,000 bedroom and -$2,000 for the larger lot equals a -$10,000 adjustment.)

Front 87

If a developer wants to develop a new subdivision, she must submit

Back 87

The answer is A SUBDIVISION PLAT MAP TO THE PLANNING COMMISSION. A developer planning to create a subdivision must submit a subdivision plat to the planning commission for approval.

Front 88

A borrower has a level-payment, amortized mortgage of $42,000 at 12½ percent for 30 years. The monthly payment is $448.25. What amount of interest will be paid from the second monthly payment?

Back 88

The answer is $437.39. The solution is: $42,000 mortgage × .125 rate = $5,250 annual interest; $5,250 ÷ 12 months = $437.50 interest month 1; $448.25 PI – $437.50 = $10.75 principal month 1; $42,000 – $10.75 = $41,989.25 outstanding balance; $41,989.25 × .125 rate = $5,248.6563 annual interest; $5,248.6563 ÷ 12 months = $437.39 interest month 2.

Front 89

The rate of interest that the Federal Reserve Bank charges member banks for borrowing from the Federal Reserve Bank is referred to as

Back 89

The answer is THE DISCOUNT RATE. The discount rate is the interest rate charged member banks for borrowing from the Federal Reserve.

Front 90

What authority originates from the U.S. Constitution and relates to protection of health and welfare of citizens at local levels

Back 90

The answer is POLICE POWER. Police power is the authority of government to protect the property, life, health, and welfare of its citizens.

Front 91

A sales associate received a $5,000 earnest money deposit from a buyer. The associate immediately delivered the deposit to the broker. The broker deposited the check on the third business day into the general operating account.

Back 91

The answer is THIS IS AN EXAMPLE OF COMMINGLING OF ESCROW FUNDS. Commingling is the mixing together of escrow funds with general business funds or personal funds

Front 92

The purchase price of a business minus the value of the tangible assets of that business equals the intangible assets of the business, referred to as

Back 92

The answer is GOODWILL. Goodwill is an intangible asset (value) of a business.

Front 93

A loan applicant is a 72-year-old retired professor. The loan applicant was denied for a 30-year mortgage, even though the applicant has sufficient income from a pension plan and an excellent credit history.

Back 93

The answer is THE LENDER'S ACTIONS ARE A VIOLATION OF THE EQUAL CREDIT OPPORTUNITY ACT. The Equal Credit Opportunity Act prohibits discrimination regarding credit on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance.

Front 94

A seller owns a home appraised at $52,500. The seller still owes $32,760 on the first mortgage and $4,200 on a second mortgage. The sales commission will be $3,640. What is the seller's equity in the home?

Back 94

The answer is $15,540. The solution is: $52,500 appraised value – $32,760 first mortgage – $4,200 second mortgage = $15,540 equity.

Front 95

A real estate company represents a motel owner who wishes to list one of his motels for sale. The owner has told the listing agent that he does NOT want to sell the motel to any racial minorities.

Back 95

The answer is TO REFUSE TO SELL OR LEASE ANY REAL PROPERTY BASED ON ONE'S RACE IS A VIOLATION OF THE FEDERAL CIVIL RIGHTS ACT OF 1866. All racial discrimination, whether private or public in the sale or rental of property, is prohibited and illegal.

Front 96

A prospective tenant purchased a rental list from a broker and then rented a duplex that the list indicated included all utilities. The tenant discovered that only water was included in the rent and notified the broker within the legislated time limit. The tenant is entitled to

Back 96

The answer is 100 PERCENT OF THE FEE PAID. If the information provided to the prospective tenant is not current or is inaccurate in any way, the full fee must be refunded on request.

Front 97

Which statement is TRUE regarding the monthly payments on a 30-year, fully amortized loan?

Back 97

The answer is INITIALLY, INTEREST IS THE LARGER PORTION OF THE PAYMENT. Payments during the first few years are used almost entirely to pay interest.

Front 98

The city has decided to pave the streets of a recently incorporated community. Property owners are to be assessed 70 percent of the cost of paving, which is found to be $25 per foot. The 70 percent assessment tax is to be apportioned between owners on both sides of the streets. What will the special assessment be for a property with 80 feet of frontage?

Back 98

The answer is $700. The solution is: $25 cost × 80 feet = $2,000 total cost of paving; $2,000 × .70 property owner's rate = $1,400 non-city portion; $1,400 ÷ 2 sides of street = $700 home owner's cost.

Front 99

Which statement is FALSE regarding a corporation for profit that is doing business as a real estate broker?

Back 99

The answer is ALL STOCKHOLDERS MUST BE REGISTERED WITH THE DBPR AS INACTIVE BROKERS. Stockholders are not required to register with the Commission.