======== Reading Marker ============== ??? <-Needs some research 812 review Questions ------------------------------------------------------------------- 'Real Estate Chapter 1 Test Review ------------------------------------------------------------------- Developer Bob acquires a tract of land that he divides into 25 home sites. Prior to marketing the home sites, Bob must submit the subdivision plat to the" *local governmental planning agency Department of Housing and Urban development. Florida Real Estate Commission local building code enforcement department. The term follow-up refers to: *What a salesperson does for buyers and sellers after the sale. returning calls in a timely manner. completing instructions given by one's broker. following through on listing calls made to "for sale by owners." An active real estate licensee is legally entitled to appraise real property for compensation concerning a non-federally related transaction: *as long as she/he does not represent themselves as a state-certified or licensed appraiser and complies with USPAP (Uniform Standars of Professional Appraisal Practice) only if the appraisal is refered to as a comparative market analysis. provided the compensation is based on a commission agreed on before the appraisal work is done. provided a licensed or certified appraiser signs the appraisal report. The field of property management has experienced growth and specialization primarily because of: *the increase in the number of absentee owners. the deregulation of the real estate industry. the increase in the numbers of licensees specializing in property management. higher construction costs that have caused an increase in the number of renters. Appraising is considered to be: *an art. a science a precise determination of value. purely mathematical with no room for personal judgement. Appraisers are paid a fee because: *to accept compensation based on the appraised value is a conflict of interest. custom dictates the method of compensation. the fee would be too high if it were based on a percentage of property value. only brokers and salespersons are paid commissions for their services. When a developer makes lots available for custom building in a newly developed subdivision, the overall purpose of deed restrictions is to ensure that custom built homes will: *not decrease the value of neighboring properties. not conflict with local zoning ordinances not exceed the minimum square footage requirements conform to standard building codes The real estate activity that is devoted to leasing, managing, marketing, and overal maintenance of property for others is refered to as: *property management. commercial sales. counseling. rental agents. Which of the following types of construction involves building for a specific buyer to his or her specifications? *Custom homes. Tract homes. Spec homes. Model homes. The term dedication as it applies to development and construction refers to: *a gift of land by the owner to the local government for public use. The builders careful attention to construction details. recording a subdivision plat map in the public records. preparing raw land for site improvements. The appraisal of real property: (Choose all that apply!) *Involves mathematical calculations and is an estimate of value. *Is an estimate of value. is a precise determination of value. Local government affects real estate in which of the following ways? *Property taxes. Documentary Stamp Taxes on Deeds Mortgage Interest Rates All of the above. The real estate profession requires: *skill and experience in real estate values, specialized service, and expertise. Only the ability to list property. Expertise in all types of real estate That licensee also act as mortgage brokers from time to time. Selecting a limited geographical area in which a real estate professional develops special expertise is refered to as: *farming. follow-up. subdividing. dedicating land. Broker Mike charges a prospective seller $50 for a comparative market analysis (CMA). Which of the following applies? *This is permissible, provided Mike does not represent the CMA as an appraisal. Brokers are not permitted to charge for CMAs. Broker Mike must be a state-certified or licensed appraiser to do so. The CMA must be signed by a state-certified or licensed appraiser. ------------------------------------------------------------------- 'Real Estate Chapter 2 Test Review ------------------------------------------------------------------- A licensed salesperson may operate: *for the broker registered as the salesperson’s employer for any registered broker. independently as long as he or she is registered with FREC. as a broker-salesperson. When applying for licensure in Florida, the salesperson applicant must: (Choose all that apply!) *Submit a notarized application *be 18 years or older *have a high school diploma or it’s equivalent. Be a bona fide Florida resident. Sarah Sota is a Florida-licensed broker-salesperson. All of the folowing statements apply to Sarah, except that she: holds an active license is broker-qualified. Has an employer *May hold more than one Florida broker-salesperson license. The intent of the Florida legislature is that professions and licensed occupations be regulated to protect the public only: (Choose all that apply!) *when the potential for harm to the public is clear *when other ordinances and laws are not sufficient to protect the public *when less-constraining measures of regulation are not available or apparent. Whenever deemed appropriate by the Legislature. A salesperson or broker student who fails the required end-of-course exam on the first attempt must: *wait 30 days and take a different version of the end-of-course exam. repeat the entire course before retaking the end-of-course exam. Repeat the end-of-course exam in full. Retake only those portions of the end of course exam that the student did not pass. Salesperson Sam sells real estate for Seasonal Sales Realty. He also works as a salesperson for Two Sides Realty. Which of the following applies? *Sam is in violation of F.S. 475 Sam may work for both companies as long as he registers both employers with FREC. This is legal as long as he only works part-time for each company. Sam must be a broker-salesperson for this to be legal. After the applicable academic course has been completed satisfactorily, the applicant must pass the state licensing exam within what period of time after passing the end-of-course exam? *24 months. 18 months. 12 months. 6 months. Which of the following may cause an applicant to be considered unqualified? (Choose all that apply!) The applicant is a citizen of a foreign country. *The applicant was previously denied a real estate license in Florida. *The applicant was previously denied a real estate license in another state. *The applicant was disbarred by the legal profession. Which of the following may cause FREC to refuse to certify an individual as qualified for licensure? Dropped out of highschool and later earned a GED. *Was convicted of fraud in an insurance claim. *Was recently denied registration as a real estate licensee Lost a pot of his own money in a bad real estate investment. To receive a notice of satisfactory completion of FREC Course I or II, a student may not miss more than: *8 classroom hours. 4 classroom hours 6 classroom hours 12 classroom hours. Lindelu received her Florida salesperson’s license in 2001. Which of the following requirements must she fullfill before becoming licensed as a real estate broker? (Choose all that apply!) Complete at least six months’ real estate eperience before enrolling in FREC course II. *Sucessfully complete the salesperson’s post licensing education. *Complete at least 12 months’ experience before taking the broker licensing exam. *Pass the broker end-of-course exam. Vincent Black has a North Carolina broker’s license, but he is not licensed in Florida. He sells a parcel of land he owns in Florida. Assuming all else is proper, this is a legal transaction because: *Florida law exempts from licensure individual owners selling their own real property. Mutual recognition agreements allow this. Florida has honored his non-resident broker's license. He has the knowledge and qualifications necessary to handle the transaction. A salesperson applicant who has submitted a correctly completed application for the state license examination and who successfully passes the state exam may legally begin to operate as a licensee when the: *applicant is notified of having passed the state exam and has filed the appropriate form with the DRE. application and proper fees are recieved by the state. applicant recieves a return receipt acknowledging acceptance of the application. applicant recieves his or her canceled check as evidence of payment followed by an assigned date for the state exam. If the post-licensing requirement is not fullfilled before the first renewal and a salesperson licensee wishes to continue in the real estate business, the licensee *must requalify for licensure. must retake the state exam within one year. is allowed a six-month grace period to meet the requirement, but must hold an inactive license during that period. must retake the prelicense course within one year. All of the following are considered services of real estate except: advertising rental property lists. appraising real property *selling cemetary lots for compensation. Conducting an auction of real property. Which of the following best defines who must be licensed to practice real estate in Florida? Anyone who performs any of the services of real estate. Anyone who performs any of the services of real estate for another. Anyone who performs any of the services of real estate for another for compensation. *Anyone who performs any of the services of real estate for another for compensation, unless specifically exempted by law. All of the following individuals are exempt from licensure under F.S. 475, except a(n): individual owner selling his or her own property. Mortgage broker dealing in personal property only. Individual serving as a personal representative and acting within the statutory limits of that designated role. *Business broker who negotiates leases of business property only. A salaried individual manages a condominium building and rents units for three to six month periods. The manager: *is exempt from licensure under F.S. 475 must be licensed under F.S. 475 because leasing is on of the real estate services. must be licensed under F.S. 475 because she rents condominium units for compensation. must be licensed by the Division of Condominiums and Time Share Sales. Rhoda is an on-site manager of an apartment complex. Rhoda receives a meager salary from the owner of the apartment complex. According to F.S. 475, Rhoda: *is exempt from licensure. must be a licensed real estate salesperson. must be a licensed real estate broker. is not exempt from licensure because she receives compensation. FBI files reveal that six months ago Mr. Croft worked as a real estate broker in Georgia, where he was charged with arson related to a large insurance claim. To avoid a long court fight without pleading guilty, Mr. Croft agreed to revocation of his real estate license and entered a plea of nolo contendere (latin for no contest). FREC has just receieved Mr. Croft’s application for licensure as a salesperson disclosing the above information. The application shows that all academic requirements have been met, and a background check reveals no incriminating information other than the facts mentioned above. FREC will probably decide that: (Choose all that apply!) *Mr. Croft is not qualified for licensure. The recommendations from the references provide adequate grounds for licensure of Mr. Croft. Because Mr. Croft was never convicted of the charge in Georgia, he can be licensed in FLorida. Mr. Croft can be licensed based on the information on the application. ------------------------------------------------------------------- 'Real Estate Chapter 3 Test Review ------------------------------------------------------------------- All of the following statements are true with respect to the members of the Florida Real Estate Commission except that they: are a mix of real estate practicioners and consumer members. Are accountable to the govenor for proper performance. *Are DBPR employees. Depend on the DRE for their administrative assistance. Members of FREC are appointed by the: *DBPR Secretary and confirmed by the govenor. govenor and confirmed by the cabinet. govenor and confirmed by the DBPR Secretary. govenor and then confirmed by the state Senate. The commission’s purpose is to regulate real estate: (Choose all that apply!) *Brokers, broker-salespersons, and salespersons. *Schools. *Instructors. *Brokerage firms. A holder of a voluntarily inactive license on active duty with the U.S. Army is required to renew his/her license: *within 6 months after discharge. every two years on discharge within one year after discharge The term of office for each Commission member is: (HINT: same as the president of the united states.) *four years. two years. five years. seven years. The members of the Commission receive: *$50 per day when on official business, plus expenses. no compensation for their services. only a per-diem fee when on official business. an annual salary equal to a state legislator's annual salary. Legal councel to the Commission is provided by *independent councel with the prior approval of the attorney general. The DRE chief staff attorney and his or her staff. The Florida Bar Association. The Division of Administrative Hearings. The commission is empowered to: (Choose all that apply!) levy fines and imprisonment as penalties for certain crimes. *Make determinations of violations. *Impose administrative fines. *Adopt an official seal that, when used on document, certificate, proceeding, or act of the commission, is prima facie evidence of its authenticity in all courts of law in this state. All of the following are specific responsibilities of FREC except: (Choose all that apply!) determining the amount of licensing fees needed to operate the commission. Reporting criminal violations to the state’s attorney. Informing the Division of Florida Land Sales, Condominiums, and Mobile Homes of disciplinary action against any of its licensees. *Providing the services necessary for the preparation and administration of licensing examinations. Fees assessed by the commission are to be used for: *the regulation of real estate practioners. general state revenues overall DBPR activities the regulation of all DBPR licensee Salesperson Jenny recently moved from Dunedin, Florida, to High Springs, Florida. Which of the following statements are true? *Jenny must notify the DRE of her change in current mailing address within 10 days of change. Jenny must notify the DRE of her change in current mailing address within 60 days of change. If jenny does not change brokers, she is not required to notify the DRE of her change in mailing address. Jenny's license is automatically canceled until she notifies the DRE of her change in current mailing address. Salesperson Sal is employed by Broker Barb. Barb’s license is suspended. This action causes Sal’s license to be: *canceled. suspended. revoked unaffected. When an active broker changes his or her business address and the broker notifies FREC within the required ten days, the licenses of the salespersons: *remain in force. cease to be in force. are null and void. are temporarily ineffective. If an active lincensee fails to renew his third two-year license before the expiration date on the license, the license will: *revert automatically to involuntary inactive status at the end of the license period. be suspended automatically. be canceled, and the licensee will have to retake botht he course and licensing exams. be canceled, and the licensee will have to retake the licensing exam only. An involuntarily inactive license will automatically expire without further action by the FREC or DBPR after: *two years. four years. five years. ten years. All of the following can reactivate a license to active status except: voluntarily inactive salesperson. Licensed corporate director of a rel estate company. involuntarily inactive broker *salesperson who did not complete his post-licensing education prior to the expiration of the intial license. An owner-developer owns several properties with different names, but all are business entities closely connected and controlled by the owner-developer. A salesperson working for that owner-developer may legally obtain: *a group license. multiple licenses. either a group license or multiple licenses, but not both. neither a group license nor multiple licenses. Broker Vagabond moves his real estate office to a new, trendy location. He is so busy coordinating the move that he forgets to notify the DBPR. Broker Vagabond’s license: *will cease to be in force. is null and void. is automatically suspended. is canceled. All of the following statements are true regarding the inactive status of a real estate licensee except that a license: may be placed in voluntarily inactive status at any time at the request of the licensee. That has been in involuntarily inactive status for more than two years shall expire automatically. That has been in voluntarily inactive status may be reactivated by making application to the DBPR and submitting proof of completing the education requirement and payment of appropriate fees. *That has been in involuntary inactive status automatically expires at the end of four years. A license ceases to be in force when a: (Choose all that apply!) *salesperson changes employers *broker changes his or her business address. *Real estate instructor changes employer. *School changes its business address. ------------------------------------------------------------------- 'Real Estate Chapter 4 Test Review ------------------------------------------------------------------- The principle of the broker is the: *person who has authorized the broker as a single agent. buyer seller customer In the common public relationship that exists in a typical real estate transaction, buyers and sellers are said to be dealing: *at arm’s length with each other. at a fiduciary capacity. in an agency status with each other. under the doctorine of ethical confidentiality. Which of the following activities is (are) considered to be fraudulent? (Choose all that apply!) *A licensee accepts and earnest money deposit on a property without first disclosing that a blanket mortgage lien exists that encumbers several lots including the subject property and that requires full payment of the lien to release the subject property. *A transaction broker fails to disclose a latent defect to a potential buyer to entice the buyer to make an offer on the property. A broker refuses to abide by a principal’s instructions to avoid showing a listed property to a certain minority group. *To promote the opening of a new real estate office, the broker invites the public to register for the drawing of a free residential lot. Which of the following statements is true regarding a salesperson's fiduciary duties? (Answer unknown) A salesperson has fiduciary obligations only to his employing broker. Salespersons have fiduciary duties to their employing brokers and the brokers’ principals. A salesperson who has independent contractor status has less stringent obligations to principals compared with an employee of the broker. All of the above. Broker Murl is an agent of the seller. The seller has disclosed to Murl that the foundation of his house has a serious structural flaw that is not readily visible because it is covered by flooring. Murl has satisfied his legal obligation if he tells the buyer: *that there is a structural defect in the foundation. that the floor appears to be in good condition. nothing unless specifically asked about the foundation. that he cannot discuss the condition of the foundation because to do so would violate his fiduciary duty to the seller. If a principal gives his broker instructions that will result in loss or harm to the principal, the broker: *should inform the principal of possible harm inherent in the instructions, then either do as instructed or widthdraw from the relationship. is justified in not carrying out such instructions. should carry out such instructions without question. should carry out only that portion of the instructions that will not cause loss or harm to the principal. A broker is obligated to communicate to the seller: (Choose all that apply!) [Answer unknown] all oral offers received regardless of how worthy they may be in the broker’s opinion all written offers receieved, regardless of how worthy they may be in the broker’s opinion. only those oral offers that are worthy in the broker’s opinion. only those written offer that are worthy in the broker’s opinion. A single agent seller’s broker who decides to buy the property of his her prinicpal: (Choose all that apply!) *Must advice the principal of everything the broker knows about the property that might influence a decision to buy or sell. Is obligated to pay the price and terms the principal has requested. *Must inform the principal that the brker is changing roles from agent representative to customer negotiator. Is automatically guilt of a breach of the listing contract, whether oral, written, or implied. What disclosure notice must be signed by the consumer before implimentation? *Consent to Transition to Transaction Broker notice. Transaction Broker Notice Single Agency Notice All of the Above. Designated salespersons are best described as: (Answer unknown) single agents for the buyer and seller in nonresidential transactions where the buyer and seller meet certain asset thresholds. the salesperson designated to represent the buyer and seller in a transaction broker relationship. undisclosed dual agents. the salespersons designated on all of the required agency disclosure forms required under the Brokerage Relationship Disclosure Act. An individual who is empowered by a principal to handle a particular transaction for the principal is a: *special agent. third party. general agent. universal agent. The laws of agency regulate the obligations and duties of: *prinicpals and agents. principals only. principals, agents, and third parties. principals, agents, third parties, and witnesses. A transactional broker provides limited representation to the buyer or the seller, or both, and has the duty: (Choose all that apply!) *of limited confidentiality *to use skill, care, and diligence. *to disclose letent defects. *of accounting. A seller has informed his transaction broker that the garage roof leaks; however, on inspection the broker does not find any indication of water damage. The broker does not mention the leaky roof to a prospective buyer. The broker is: *in violation of Chapter 475, F.S. has breached his duty of accounting. must disclose the roof conditionbefore the signing of the purchase agreement. has done nothing wrong because he does not have an agency relationship with the buyer or the seller. An agency relationship is terminated (Choose all that apply!) *when it is renounced by the agent. *when the subject property is destroyed. when the purchase contract is signed. at the will of either party without notice. A broker’s obligations to customers include the duty: *to use skill, care, and diligence. all of these. of confidentiality of undivided loyalty. To sell a property encumbered by a mortgage lien that also covers other property is fraudulent: *unless the property may be released from the mortgage before a foreclosure sales, on payment of an amount less than the amount due from the purchaser after the sale. under any circumstances unless the broker disclosed this fact at first contract. unless the arrangement has been approved by an agency of the State of Florida. For a buyer to prove a charge of fraud against a real estate licensee who has made a nonfactual statement about a property, the buyer must prove that the: (Choose all that apply!) *Misstatement was made by the licensee. *Misstatement made by the licensee was material to the transaction. *Buyer was damaged by the misstatement. *Buyer relied on the mistatement. Seller Mike decides to list his condo with Gator Realty. He entered intoa single agency relationship with Gator Realty. Later, Mike agreed to allow his broker to transition to transaction broker. Which of the following must Mike receive for the single agent broker to transition to a transaction broker? (Choose all that apply!) *Transition disclosure *Transaction broker disclosure. Single agent disclosure Notice of No Brokerage Relationship A transaction broker involved in an expensive residential sale discovered before the closing that a large recycling plant will be builtapproximately three-quatrters of a mile from the home site. The transaction broker should: *disclose the information to both buyer and seller. inform only the buyer of this fact. inform only the seller of this fact. ignore the information to protect the transaction. ------------------------------------------------------------------- 'Real Estate Chapter 5 Test Review ------------------------------------------------------------------- Which of the following is(are) true in connection with a real estate transaction? (Choose all that apply!) *A salesperson may sue only his or her registered employer. *A salesperson must accept a listing in the name of his employer. *A salesperson may accept a deposit from a source other than his employer. A salesperson may accept a commission from a source other than his employer. Each active real estate broker must display a sign: on or about the entrance to the principal office. On or about the entrance to all branch offices. With letters at least two inches in height. That includes the broker’s trade name, if any. A broker may maintain an escrow account in all of the following except in a: (Choose all that apply!) *title company in Florida that has trust powers. *Credit union in Florida. *Commercial bank in Florida Life insurance company in Florida. In connection with escrow acconts, the Florida Real Estate Commission has rules and regulations that: (Answer unknown) permit the depositing of personal funds into an escrow account as long as adequate records are kept. prohibit the depositing of more than $200 of personal funds into an escrow account. require deposits to be placed in an escrow account by the salesperson. require escrow disbursement orders to be prepared when making all deposits. Real estate salespersons who receive checks payable to them as deposits on the purchase of real property must: *endorse the checks and immediately turn them over to their employers. endorse the checks, deposit them into their employers' accounts, and maintain good records. deposit the checks immediately in their own accounts and notify their employers of the transactions. deposit the checks immediately and give their employers the equivalent amounts in the form of checks or cash. Broker Murl decides to use the trade name Little Mo Realty for the name of his real estate business. Murl must: *register the trade name with FREC so that it can be entered into the commission’s records. register the trade name with the Florida Secretary of State. obtain charter from the State of Florida. do all of the above. Which of the following statements is (are) true regarding escrow accounts? (Choose all that apply!) *The escrow account may be either an interest-bearing or a non-interest-bearing account. *A broker may choose to have an attorney or the title company maintain the escrow account. its unethical and illegal for the broker to keep earned interest even if the buyer and seller give written permission. the escrow account may be maintained in a commercial bank, savings association, or credit union anywhere within the continental united states. A dispute arises between the buyer and seller as to which one is entitled to escrowed property. The broker should first: *notify FREC, unless exempted from the notice requirements. mediate the matter. arbitrate the matter with the consent of both parties. submit the matter to a court of law for adjudication. Regarding advanced fee trust accounts: *at least 75% of all such advanced fees collected must be deposited, with the exception of advance fees for auctioning real property. 100% of all such advance fees collected must be deposited. such accounts may be combined with other escrow or trust accounts but not with personal accounts. a broker may use such funds if the expenditures are limited to general business expenses and accurate records are kept. An individual who paid for rental information, but did not obtain a rental is entitled to repayment of _______ . [fc] 75% of the fee if requested within 30 days of the contract/receipt date Rebecca purchased a rental list one week ago from a real estate broker. Rebecca inspected an apartment described in the list. The apartment manager told Rebecca that cats were not allowed. Rebecca had specifically looked at the apartment because the rental list indicated that pets were allowed. Immediately, Rebecca verbally demanded and should legally receive from the broker _______ . [fc] 100% of the fee paid If the licensee issued to the only active broker of a real estate corporation becomes void for any reason, another active broker must be appointed within 14 calendar days. Failure to appoint another active broker will result in _______ . [fc] automatic cancellation Murl decides to incorporate his new real estate business, Little Mo Realty, Inc. to reduce his personal liability. Murl must register the brokerage entity with the commission. Obtain a charter from the Florida Secretary of State. Register all officers and directors of the company with the commission. A corporation sole is _______ . [fc] an ecclessiastical or church organization To form a general partnership, two or more persons must agree to _______ . [fc] engage in business together and share in the profits and losses One difference between a general partnership and a limited partnership is that _______ . [fc] limited partners must make a cash or property investment Which of the following business entities may be registered as a real estate broker? [fc] limited partnership When a broker has conflicting demands from a buyer and seller regarding an escrow deposit, the broker may employ which of the following escape procedures? Request an escrow disbursement order. Provided all the parties consent, submit the matter to arbitration Through an interpleader or other appropriate legal proceeding, submit the matter to a court proceeding for determination of the rightful claimant. Murl is getting prepared to open Little Mo Realty as a sole proprietorship and is placing an order to have an entrance sign made. The exterior sign must include words “licensed (or “lic.”) real estate broker.” Trade name Broker’s name. In answering questions pertaining to quality of title, real estate brokers are required to advise prospective buyers to _______ . [fc] have a lawyer render an opinion or obtain title insurance A broker recieves conflicting demands concerning a roof inspection report. Both the buyer and seller claim the earnest money deposit. The broker must: provide written notification to FREC within 15 business days. Insitute one of the statutory settlement procedures within 30 business days after the last demand. The sales commission rates applicable to the various types of property sold in Florida are determined by _______ . [fc] agreement between each broker and buyer or seller When a salesperson decides to leave the employ of her broker, he Must notify FREC on the prescribed form. Must refrain from discrediting her former employer. A real estate transaction has been closed, but the seller refuses to pay the broker the commission earned as a result of the sale. The broker may _______ . [fc] file suit in a court of law against the seller Broker Murl decided to organize Little Mo Realty as a limited partnership. Which of the following must Murl accomplish? file the limited partnership agreement with the Florida Secretary of State. Register the limited partnership with the commission. Register all general partners with the commission. In Florida, listing obtained and any commissions paid by the buyer or the seller are legally property of the _______ . [fc] salesperson’s employer An active real estate salesperson signed an employement agreement with Broker Denton two days ago. Broker Denton is out of town today, and the salesperson need to know the office rules pertaining to the advertising of listings. That information should be available _______ . [fc] in the office policy manual Broker Murl of Little Mo Realty and Broker Dan of Boyds of Naples agree to work with one another to market a prestigous marina in Naples, FL. Murl is particularly knowledgable regarding marinas and Dan is an expert on the Naples real estate market, so they decide to combine their expertise on this particular listing. This business arrangement is referred to as _______ . [fc] a joint venture ------------------------------------------------------------------- 'Real Estate Chapter 6 Test Review ------------------------------------------------------------------- The probable cause panel includes: (choose all that apply) *a total of two members *at least one professional member *one consumer member, if available. *at least one current member. A person is eligible to seek recovery from the Real Estate Recovery Fund if: *She or he has receieved a final judgement against a licensee in any action wherein the cause of action was based on a real estate brokerage transaction, unless specifically precluded. she or he is a licensed broker who acted as the agent in the transaction that is the subject of the claim. her or his claim is based on a real estate transaction in which the broker did not hold a valid, current, and active license at the time of the transaction. any of the above events has occured. The decision as to wether probable cause exists is made by majority vote of the: Commission Commission or the Department, as appropriate. Administrative Law Judges *Probable Cause Panel (or the Department if there is no panel.) Which of the following actions would cause a license to be revoked without prejudice? a licensee accepted an earnest money deposit on a property that he knew was encumbered by an undisclosed lien. The broker obtained his license by means of fraud, misrepresentation, or concealment. *A salesperson receieved her license as a result of an administrative error by the Division of Real Estate. For the referral of real estate business a licensee shared a commission witha person (not party to the transaction) who did not have a real estate license. All of the following offenses are a misdemeanor of the first degree except: publishing false or misleading information. *obtaining a license by fraud or misrepresentation. failing to provide current or materially accurate rental information for a fee. failing to account for advance fees in a lawful manner. Jim, an ambitious, hard-working salesperson, was eager to snag a listing on a beautiful two-story home. The seller told Jim that the mortgage on the home also encumbered the adjoining vacant lot he owned. The seller plans to build a new home for his family on the vacant lot. Jim did not mention to prospects that the mortgage also included the vacant lot because he was confident that there would be enough seller proceeds to satisfy the lien at closing. Which of the following applies to this situation? This is legal as long as the lein is satisfied at closing. Jim must disclose that the lien also encumbers the vacant lot at the time of the offer is reducedto writing. *Jim is guilty of fraudulent and dishonest dealing by trick, scheme, or devise. Jim is guilty of culpable neglegence Susan's prospect inquired about the quality of title on a property. Susan was very knowledgable about this particular listing because she had listed and sold it two years ago to the current owners. At that time a title search was performed and a title policy was issued. Susan may: give an opinion of title based on her knowledge and experience with this particular property. give an opinion based on the title policy issued two years ago. *be subject to suspension of her license if she fails to advise the buyer to consult an attorney or to obtain title insurance. Which one of the following is required to prepare and submit a recommended order of findings and conclusions in a complaint case? Court of law. *Administrative Law Judge Probable cause panel. DBPR Any final order issued by the DBPR Secretary or a legally appointed designee, that results from Circumstances that pose immediate danger to the public's health, safety, or welfare is called a: Petition for review. stay of enforcement. *Summary of emergency suspensaion. License revocation Broker Jack of Farm Acres Realty listed a 15-acre farm. Jack accepted a $5,000 earnest money deposit from the buyer; however, the buyer was unable to secure financing, and requested that the funds be returned acording to the terms of the contract. Jack was unable to reimburse the buyer because he used the money to pay his office rent and other overhead. Jack is guilty of: dishonest dealing by trick, scheme, or devise. *failure to account and deliver. fraud. culpable negligence. The DBPR is authorized to investigate a written complaint filed against a licensee: *if the alleged complaint is legally sufficient. only if the claimant has been harmed by the actions of the licensee. only if the alleged violation was committed in the state of florida. only if all of the above conditions have been met. Neglecting to correct omissions or errors on alicense application returned by the DBPR to the applicant for correction is considered grounds for: suspensaion of an applicant;s rights. *denial of the application. revocation of the application. administrative revocation. If a broker's license is suspended, the licenses of all salespersons working for that broker are automatically: *canceled. denied. suspended. revoked. One of the grounds for the suspensaion or revocation of a licensee's license is the unauthorized use of retention of money or property, otherwise known as: concealment. *conversion culpable neglegence commingling. Less than careful attention to duties, one of the grounds for suspension or revocation of a licensee's license, is otherwise called: concealment. conversion *culpable neglegence commingling. When payment from the Real Estate Recovery Fund is made to satisfy a claim against a licensee because the licensee did not comply with an escrow disbursement order, the Commission's action against the licensee must be: citation. probation. *automatic suspension emergency suspension. Which of the following types of penalties may be imposed for violations of the real estate license law? Civil penalties only Administrative penalties only Civil and administrative penalties only. *Criminal, civil, and administrative penalties. Whenj a licensee is found guilty of a violation of chapter 475, F.s., the Florida Real Estate Commission may impose any of the following disciplinary penalties except: *imprisonment probation an administrative fine denial of a license application. One penalty that the Commission cannot legally levy is to: deny the issuance of a license. *deny the payment of compensation. suspend a license revoke and license. The collective amount to be paid from the Real Estate Recovery FUnd as a result of any one real estate transaction cannot exceed: $20,000 *$25,000 $75,000 There is no limit. Reasonable grounds or justification for prosecuting: *Probable cause Formal Complaint Subpoena Complaint an alleged violation of a law or a rule. *Complaint Probable cause Formal Complaint Subpoena Statement of an alleged violation and the penalty to be imposed *Citation Complaint Formal Complaint Subpoena an outline of charges against the licensee and must be answered within the statutory time limit. Citation Complaint *Formal Complaint Subpoena An administrative law judge’s findings and conclusions and the recommended penalty. Citation Complaint *Recommended order Subpoena ------------------------------------------------------------------- 'Real Estate Chapter 7 Test Review ------------------------------------------------------------------- The federal statute that prohibits a private homeowner from discriminating strictly on the basis of race if selling, renting, or leasing is the: *1866 Civil Rights Act. 1968 Fair Housing Act. 1934 National Housing Act. 1968 Interestate Land Sales Full Disclosure Act. The law that requires that lenders disclose the annual percentage rate (APR) of interest is: Real Estate Settlement Procedures Act (RESPA) Federal Housing Act (FHA) Florida Deceptive and Unfair Trade Practices Act (Little FTC act). *Consumer credit Protection Act (Truth-in-Lending). The federal 1968 Fair Housing Act prohibits discrimination based on: *race, color, religion, sex, national origin, familial status, or handicap status race or age relgion, age, race, familial status, or handicap status. race, color, relgion, age, or national origin. The Truth-in-Lending act: Does not affect real estate financing credit. attempts to regulate maximum interest rates charged customers. *requires disclosure of finance charges as well as annual percentage rates of interest. All of the above. The Real Estate Settlement Procedures Act (RESPA) was enacted to: establish maximum cost for all closing items. ensure that sellers are informed regarding the amount and types of expenses expected at closing. *ensure that buyers are informed regarding the amount and types of expenses expected at closing. establish a minimum cost for all closing items. If requested by the borrower, and to the extent that information is available to the closing agent, the borrower must be provided with which of the following at least one day before closing? *Uniform settlement statement. Borrower's special information booklet. Guaranteed amount of settlement costs. Notice of title-closing-agent selection. As part of the preparation for a closing, a listing broker referred a property owner to an appraiser. The appraiser completed the appraisal and charged the owner $250, which was enetered on the RESPA settlement statement. The appraiser gave the listing broker $50 for the referral, which the broker accepted. According to RESPA: The listing broker must be a licensed appraiser. the appraiser has not violated the law as long as he or she is state certified. *both the broker and the appraiser have violated the law. the arrangement is entirely legal. Which of the following is exempt from RESPA requirements? *The sale of a house where the only financing is assumption of an existing loan. A construction loan that will become a permanent loan only after the building is completed. A loan to purchase a new house in a new subdivision. All of the above. The intent of the Florida Residential Landlord and Tenant Act is to: give the tenant legal advantage in his or her relationship with the landlord. *make the landlord-tenant relationship more equitable. provide landlords the legal assistance needed to create an advantageous relationship. None of the above. When security deposits or advance rents are required by a landlord in Florida, such funds: must always be kept in a seperate account. *may be deposited in the landlord's account if he or she posts a $50,000 surety bond. must always be placed in an interest-bearing account. must bear interest at the rate of 7% The associates in a real estate office have been instructed to send all of their spanish-speaking prospects to a new subdivision "beautifully designed with a Spanish flavor." This is an example of: *steering subordination alienation blockbusting A landlord who rents a duplex to two tenants is obligated to provide: pest examination service garbage pickup service garbage receptacles. *all of the above unless waived in the rental agreement. Which of the following disclosure requirements are required to be given to tenants in multifamily units of 5 or more units? Notice of nonrepresentation. *Notice of where deposit is held within 30 days. 15 day cancellation privilege. All of the above. If a tenant vacates rented premises promptly when a lease or tenancy expires, the landlord must: Inform the tenant within 45 days if the landlord claims part of the security deposit. Return the tenant's security deposit within 30 days or explain any exception. Inform the tenant within 25 days if part of the tenant's deposit will be claimed. *Inform the tenant within 30 days if part of the tenant's deposit will be claimed. A tenant is obligated to Ensure that his or her guests do not disturb the peace. be reasonable in operating air-conditioning equipment maintain interior plumbing in a clean and sanitary way. *all of the above. If a tenant's rent is current and he or she notifies the landlord of an intended absence, the landlord: *cannot enter the tenant's rented premises without the tenant's consent except in an emergency. Can enter only if accompanied by a second party. Can enter without any restriction None of the above. How long does a landlord have to correct a noncompliance that is brought to his or her attention by written notice from a tenant. *7 days 10 days 2 weeks 30 days A landlord must follow designated procedures in evicting a tenant. The first step in a legal eviction is to: personally deliver a written notice demanding possession. notify the tenant by mail of the landlord's demand for possession. attach a notice to the door of the premises that possession of the premises is demanded. *any of the above. The law requires that lenders furnish borrowers with a good-faith estimate of closing costs is the: Truth-in-Lending act. *Real Estate Settlement Procedures Act (RESPA) Consumer Credit Protection Act. Fair Housing and Lending Act. Which of the following phases may be legally included in an advertisement to sell real estate? (Choose all that apply) "Beautiful neighborhood, no young children please." "Quiet neighborhood, no young children please." "Spanish-speaking community." *"Cute cottage home, perfect for first time buyer." Discrimination under the Fair Housing Act regarding familial status would apply to which of the following individuals? A twenty-three year old college student. *A thirty-nine year old pregnant woman. A sixty-eight year old widow. All of the above. Can an insurance company refuse to provide insurance coverage to applicants within a particular neighborhood because of the socioeconomic characteristics of the neighborhood? Yes, provided the insurance company does not insure any of the homes within the neighborhood. Yes, there is no regulation concerning insurance companies and discriminatory practices. *No, to do so is redlining which is a violation of the Fair Housing Act. No, to do so is steering which is a violation of the Civil Rights Act of 1866. What federal law requires developers to provide prospective purchasers with a Property Report prior to signing a purchase contract? *Interestate Land Sales Full Disclosure Act Fair Housing Act Consumer Credit Protection Act Truth-in-Lending act. Which of the following phrases, if included in an advertisement for credit, would constitute "triggering terms." No down payment required. Financing available. *Pay only $1,102 per month All of the above. Which of the following phrases, if used in advertising real estate, would constitute a violation of the Fair Housing Act? Mother-in-law apartment Quiet Neighborhood Non-smoking tenants only. *No wheelchairs. If a tenant properly notified of the landlord's claim on the security deposit, the tenant is allowed how many days after the receipt of the landlord's notice to file and objection? 10 *15 30 45 Which of the following properties is covered under the Florida Residential Landlord Tenant Act? Commercial lease Extended stay motel *duplex unit medical facility The provision in the Growth Management Act that requires the infrastructure to be in place before new development can begin is referred to as the: comprehensive plan *concurrency provision unit-in-place provision. development of a regional impact. Families with children under age 18 and pregnant women. *familial status Redlining blockbusting handicap status Denying loans or insurance coverage or other restrictive practices by lending institution or insurer that present different terms or conditions for homes in certain neighborhoods. *Redlining Familial status blockbusting handicap status ------------------------------------------------------------------- 'Real Estate Chapter 8 Test Review ------------------------------------------------------------------- The most comprehensive interest in real property that an individual may possess is a estate for years *fee simple estate remainder estate life estate The physical components of real property are (choose all that apply) *surface *air space *subsurface equitable rights Fixtures are items that are fixed, or attached, to real property were once personal property, but are now real property have been incorporated as part of a real property *all of the above Frank and Lucile decide to get a divorce. In addition to their Florida honesteaded property, they own a vacant lot in the same subdivision acquired in both of their names during the marriage. How will the lot be distributed? The lot is considered to be seperate property and will be distributed equally between Frank and Lucille The real estate is community property and each spouse is entitled to a one-half interest in the lot. The interest in the lot will revert to a life estate and be distributed to the lineal decendants. *The lot is a marital asset and will be distributed equitably. There is no such thing as community property in Florida. *True. False. The bundle of rights associated with real property include the rights of: (choose all that apply) *use *possession *disposition *exclusion Mary and John were recently wed. Mary owns a residential lot that was purchased before the marriage. The lot is considered to be *seperate property community property a tenancy in common an estate by the entireties At the expiration of the lease period and before renegotiation of the lease, a tenant continued to occupy the apartment. The tenant's position is called a(n) tenancy at will *tenancy at sufferage freehold estate estate in reversion Lucy recieved a new microwave for Christmas. The microwave was installed abover her range by screwing the unit to the kitchen cabinets and venting it through the attic. The microwave would be considered: *a fixture a chattel seperate property personal property The homestead tax exemption is deducted from the: market value of a property *assessed value of a property sale price of a property total cost, including all improvements A husband and wife own a home with title in both names. The husband owns two small farms in his name only, acquired before the marriage. They have one minor child and one adult son. The husband dies. Which is most correct? The widow owns a life estate in all property. The property is split equally among the widow and the children. *The widow owns all of the home and may claim 30% of the two farms. The widow owns 30 percent of all of the real estate. The real estate protected by homestead rights is limited to: 640 acres outside a city or town and one acre in town. 160 acres outside a city or town and one-half acre in town 40 acres outside a city or town and one-half acre in town *160 acres outside a city or town or one-half acre in town A constitutional homestead is owned by Ralph, who is a head of a family consisting of himself, wife, and their three children. Ralph dies unexpectedly. After his death: The widow owns the homestead. *The widow owns a life estate in the homestead, and the children are vested remaindermen. The widow may claim elective share rights of 30% of the homestead, and the children devide the remainder. Any of the above. Which of the following estates feature right of survivorship? (choose all that apply) All freehold estates *estates by the entireties *joint tenancies tenancies in common Chapter 475, F.S., defines real property as any interest or estate in: land, improvements, leaseholds, subleaseholds, mineral rights, cemetary lots, or any assignment thereof. land, improvements, business enterprises and business opportunities, leaseholds, subleaseholds, mineral rights, mobile homes, or any assignment thereof. land, business enterprises and business opportunities, leaseholds, subleaseholds, mineral rights, cemetary lots, mobile homes, or any assignment thereof. *land, business enterprises and busines opportunities, including any assignment, leasehold, subleasehold, or mineral rights. In Florida, cooperatives and time-sharing are regulated by the: Division of Real Estate (DRE) *Division of Florida Land Sales, Condominiums, and Mobile Homes. Department of Housing and Urban Development. Florida Real Estate Commission. A condominium unit buyer has how long to cancel the purchase contract following the signing of an agreement with a developer? 3 days 10 days *15 days 20 days Which one of the following is required to be given by sellers of a cooperative, condominium, or time-share project? *Apportionment of expenses for common elements Names and business addresses of real estate salespersons assigned. Names of all current unit owners Names of unit owners, unit numbers, and amounts due from unit owners delinquent in monthly assessment fees. Which of the following characteristics are unique to cooperatives as opposed to condominiums and time-share plans? (choose all that apply) *The corporation holds title to the land and improvements. *A purchaser receieves shares of stock in the corporation. *A proprietary lease entitles the purchaser to occupy a unit. *The seller actually sells his or her stock in the corporation. All of the following apply to a constitutional homestead exemption except: Protection from forced sale for nonpayment of certain debts. deduction of $25,000 from the assessed value of the homesteaded property, if claimed. claimants must hold title to the property and use the home as their principal residence. *it automatically creates a tenancy by the entireties if the person filing for homestead is married. Ms. Lee Dade paid cash for a 60-acre lemon grove in Citrus County. The estate is for an indefinite period of time. Ms. Dade owns what type of estate in the property? (choose all that apply) *Fee simple estate *Freehold estate *Estate in severalty Leasehold When a tenant, after rightfully being in possession of a rented premises, continues possession after his right has ended, this creates a(n): tenancy at will *tenancy at sufferage fee simple estate estate for years Which of the following would not be included in the defintion of real property according to Chapter 475, F.S.? *Lot in a mobile home park interest in a business enterprise mineral rights time share unit A type of estate created when a husband and wife take title in both namesis referred to as a(n): joint tenancy *tenancy by the entireties tenancy in common estate for years An elective share consists of what percent of a decedent's net estate other than homesteaded property? 10 20 25 *30 ------------------------------------------------------------------- 'Real Estate Chapter 9 Test Review ------------------------------------------------------------------- The City of Oldsmar wishes to take private property for the construction of a fire station. The city may acquire title in this situation by: *Codemnation adverse possession escheat to the city filing a property tax lien Title to real property legally transfers from grantor to grantee when the: deed is signed. deed is recorded. *deed is voluntarily delivered and accepted. proper amount of tax is paid on the deed. Courts at various levels have ruled that: constructive notice is superior to actual notice. actual notice is superior to constructive notice. neither constructive notice nor actual notice is required. *constructive notice and actual noticehave equal legal priority. A ninety-two year old man is being forced from his home because of a government taking. The home has been in his family for four generations. What recourse, if any, does he have? He can file an injunction to stop the taking. He can pay the delinquent property taxes to prevent the foreclosure. *He may request a condemnation proceeding to protest the amount of compensation being offered by the government body. He may do all of the above. For a deed to be valid, a competent: grantor, grantee, and two witnesses must sign the instrument. *grantor and two witnesses must sign the instrument. grantee and two witnesses must sign the instrument. grantee only must sign the instrument. The type or form of deed most commonly used to clear clouds on the title of real property is the: general warranty deed. special warranty deed. bargain and sale deed. *quitclaim deed. If the sale contract does not specify the type of deed to be delivered, the seller is required to provide a: *general waranty deed. special warranty deed bargain and sale deed. quitclaim deed. The process of taking property under the power of eminent domain is called: escheat. foreclosure. *condemnation. voluntary alienation. The type of deed in which the grantor does not warrant the title in any manner except against his or her acts or the acts of his or her representatives is called a: general warranty deed. *special warranty deed. bargain and sale deed. quitclaim deed. The covenant against encumbrances in a deed is designed to guarantee that the: *grantor has not encumbered the property in any manner except as noted on the deed. grantee is responsible for any unpaid encumbrances. grantee has not encumbered the property. grantor will not encumber the property. The prupose of recording a deed is to: comply with real estate license law. effect the transfer of ownership. give actual notice of ownership. *give constructive notice of ownership. A valid instrument of conveyanceof real property must be: (choose all that apply) *in writing signed by a competent grantee *witnessed notarized. The seisin clause in a deed specifies: the type of estate being conveyed. the improvements being transferred with the land. the rights reserved by the grantor. *that the grantor actually owns the property and has the right to sell it. The deed that contains the covenant in which the grantor guarantees that he or she will forever be responsible for warranting the title and will defend the title and possession is a: *general warranty deed. special warranty deed. public warranty deed. bargain and sale deed. The provision in a deed that names the parties and contains the granting clause is the: *premises. encumbrance clause. habendum clause. seisin clause. An owner placed a condition in the deed that stipulated that a commercial building could not be erected on the property until at least the year 2000. This is an example of: police power *deed restriction involuntary alienation governmental restriction on ownership An example of an encumbrance on title to real property is a(n): easement deed restriction lien *All of the above. When a lis pendens is filed properly witht he county clerk, it becomes a type of: attachment on the subject property. vendor's lien. *constructive notice. easement by prescription. Which of the following liens is first in priority? A property tax lien effective on January 1, 2001 A special assessment lien certified on December 31, 200. *A first mortgage lien filed on July 15, 2001 A construction lien filed on November 30, 2000 The complete successive history of a parcel, from the time it was conveyed from a government to a private owner to today, is referred to as: an abstract of title. title insurance. warranty forever. *a chain of title. Mr. and Mrs. Lee signed a contract to purchase a home in a residential subdivision. When the Lees had the lot surveyed before closing, they discovered that the contractor had built the neighbor's garage three inches inside the west boundary of their lot. The garage in its present location is an example of a(n): deed restriction. easement by prescription. implied easement. *encroachment When a pathway to a property has been used continuously and without interruption for more than 20 years it creates an: implied easement. encroachment. alienation by adverse possession. *easement by prescription. Soon after Michael's death a deed was discovered behind a brick in the basement wall of his home. The deed is for Michael's home and it deeded the property to a charitable organization. Michael is survived by his son Andrew, who discovered the deed. Michael died intestate. Based on this information, the house belongs to the: state, because Michael died intestate. charitable organization because the deed conveyed ownership to it. *legal heir because the deed was never delivered and accepted. legal heir because the deed was not signed by the grantee. The owner's insurance policy is: issued for an amount no greater than the purchase price of the property and is transferable. *issued for an amount no greater than the purchase price of the property and is not transferable. a seperate policy for the amount of the unpaid balance of the mortgage and is transferable. a seperate policy for the amount of the unpaid balance of the mortgage and is not transferrable. Which of the following applies to easements? (choose all that apply) *An easement is a right given to or belonging to another for specific use of an owner's property. *An easement is a nonpossessory interest. *An easement is a type of encumbrance. An easement is unauthorized use of an owner's property. The things to remember when working with private restrictions are: *(DELL) [private restrictions] deed restrictions, easements, leases, and liens. (A BAR SALE) [real estate services] advertise, buy, appraise, rent, sell, auction, lease, and exchange. (MALE) [settlement procedures] mediation, arbitration, litigation, and escrow disbursement order. (IRMA) [fixtures] intent of the parties, relationship between parties, method of annexation, and adaption of the article. (DUPE) [bundle of rights, general property] Disposition, Use (control), Possession, and Exclusion (quiet enjoyment) (PET) [gov't restrictions] Police power, Eminent domain, Taxation. (PITT) [joint tenancy] Posession, Interest, Time, Title. What is a title? *A person who holds vested ownership rights in a property is said to hold a title. a written instrument used to convey an interest in real property. A deed conveys a legal title. An instrument of conveyance whereby title to real property is transferred from one party to another. The conveyance of real property by virtue of a last will and testament is a type of voluntary alienation because the person conveying the property by will (the testator) does intend to convey his or her property to a particular individual. Provides for a government (usually a state government), to take the property of an owner who dies interstate and without any known heirs entitle to receive the property. A "must have" clause in a deed *granting acknowledgment owner quitclaim Type of lien resulting from unpaid improvements to a property *construction mortgage constructive property tax Type of notice from reading or hearing information *actual notice constructive notice acknowledgement real property notice A type of lease where the tenant pays some of the building expenses *Net Lease Percentage Lease Ground Lease Gross Lease Power of property to convey to the state *Escheat Police Power Lien Property Tax Lien A written instrument that conveys title *deed actual notice encumbrance clause easement Type of deed where the grantor makes no warranties *quitclaim deed bargain and sale deed special warranty deed general warranty deed An official summary of documents filed in the public records *abstract of title certificate of title insurance title insurance habendum Acquiring possession because the owner sleeps on his rights *adverse possession escheat to the state eminent domain lis pendens A declaration by the grantor that signing is a free act *acknowledgement actual notice constructive notice habendum Legal process that is used in eminent domain *condemnation Eeed restriction Easement Property tax lien To die without a will is *intestate testate grant eminent domain Person conveying property in a will *testator intestator grantor grantee Sucessive changes of ownership are linked to form this *chain of title deed restrictions a lease involuntary liens Type of notice when the information is recorded and made public seisin *constructive notice granting clause habendum Notice of pending legal action *Lis Pendens Police power Eminent domain Legal Title An attorney prepares this after reviewing the abstract of title *title opinion chain of title constructive notice actual notice The conditions for adverse possession (DUPE) [bundle of rights, general property] Disposition, Use (control), Possession, and Exclusion (quiet enjoyment) (PET) [gov't restrictions] Police power, Eminent domain, Taxation. (PITT) [joint tenancy] Posession, Interest, Time, Title. *(HOTCAN) [conditions for adverse poss.] Hostile possession, open possession, taxes paid, claim of title, adverse possession for 7 yrs, notorious ownership of property. The type of lean resulting from a mortgage involuntary *voluntary Title insurance policy that is transferable *lender's title insurance owner's title insurance A legal right-of-way authorizing access *easement deed lease eminent domain Indicates the date and names the parties in a deed *premises section granting clause habendum seisin Optional title insurance for the full purchase price of the home *Owner's title insurance Lender's title insurance ------------------------------------------------------------------- 'Real Estate Chapter 10 Test Review ------------------------------------------------------------------- The NW1/4 of the NE1/4 of the SW1/4, Section 20, Township 4 South, Range 2 East, describes a tract of: .125 acre .5 acre. *10 acres. 64 acres. Calculate the number of acres contained in the folowing legal description: NE1/4 of the SE1/4 and the SE1/4 of the NE1/4 and the N1/2 of the NE1/4. 30 acres 80 acres. 120 acres *160 acres The the metes-and-bounds method of description: metes refers to direction, and bounds refer to distance. *metes refers to distance, and bounds refers to direction. metes refers to distance, and bounds refers to measurement. metes refers to metric, and bounds refers to boundaries. The government survey system is especially adapted to describing: lots in platted subdivisions. odd-shaped tracts of land carved out of former land grants. *land in concise symbols and words. parcels with man-made or natural physical features What is the designation of a township located three township tiers south of the base line and five ranges east of the principal meridian? R3S, T5E *T3S, R5E R7E, T2S None of the above. Correction lines or parallels are located on each side of the baseline every mile. 6 miles. *24 miles 36 miles. The tract of land located inside a square formed by intersecting range lines and township lines is called a(n): acre. check. section. *township. The vertical strip of land six miles wide beginning at the principal meridian and extending six miles east along the length of the principal meridian is called: *range 1 east township 1 east tier 1 east section 6 If you have located a township designated as T1N, R1E the township due north of that township is T1N, R2E T1S, R1E *T2N, R1E T2N, R2E Each township contains: 36 sections. 36 square miles. 36 acres *36 sections and 36 square miles. In writing the legal description of a section, which is the standard sequence? Range number, township number, section number *Section number, township number, range number Township number, range number, section number. Section number, range number, township number. The north boundary of Section 36, Township 1 South, Range 1 West is located: 6 miles south of the principal meridian. 35 miles west of the baseline. 25 miles west of the principal meridian *5 miles south of the base line. A legal description that reads, in part, "the north one-half of the Northeast one-quarter of the Northwest one-quarter Section 12, Township 42 South, Range 12 East" describes a tract of: *20 acres 10 acres 5 acres 1 1/2 acres Dean owned the NW 1/4 of a section. He sold the W 1/2 of that NW 1/4. How many acres does Dean still own? 40 acres *80 acres 160 acres 640 acres Plat maps used in the lot and block method of legal description show: the grid system of government squares. *dimensions of streets and improvements. the numerical street address for each lot. distance and direction from the point of beginning. ------------------------------------------------------------------- 'Real Estate Chapter 11 Test Review ------------------------------------------------------------------- Which group of legal instruments may legally be prepared by a licensed real estate broker? Listing contracts, buyer-brokerage agreements, commercial leases, and deeds Leases, option contracts, promissory notes, and buyer-brokerage agreements *Listing agreements, buyer-brokerage agreements, sale contracts, and option contracts Mortgages, promissory notes, commercial leases, and option contracts Failure to comply with the statute of frauds: carries with it prescribed time frames for enforcement. *questions the enforceability of a contract, would have to do with whether a contract is in writing. may not constitute an illegal act but would always invalidate a sale contract, questions the enforceability of a contract, would have to do with whether a contract is in writing. may not constitute an illegal act but would always invalidate a sale contract, carries with it prescribed time frames for enforcement, questions the enforceability of a contract, would have to do with whether a contract is in writing. Which of the following contracts do not come under the jurisdiction of the statute of frauds? *Listing contracts for less than one year Option contracts Sale contracts Option and sale contracts A valid real estate sale contract is one that: *contains all of the essential elements. has been acknowledged. requires witnessing. transfers title to real property· An adult contracting with a minor is an example of failure of which one of the following essentials of a real estate contract? Legality of the object Offer and acceptance Meeting of the minds *Competent parties Canceling a daughter's property indebtedness in a contract due to love and affection is an example of *good consideration valuable consideration insufficient consideration inadequate consideration A contract that is not in writing is referred to as a(n): formal contract *parol contract unilateral contract executory contract When a contract has been formed but an undertaking remains to be performed by one or both parties, it is an example of a(n): implied contract express contract. *executory contract. unilateral contract. When a counter offer is made: (Choose all that apply) *I. theoriginal offer is terminated by the counteroffer *II. the original offeree becomes the offeror. III. offeror and offeree remain the same even though the terms are modified. *IV. a contract is created wh,n the new offeree accepts the counter offer and communicates the acceptance to the new offeror. An offer is terminated by any one of the following except a(n): counteroffer. acceptance rejection. *extension· A contract may be tenninated for which of the following reasons: Mutual rescission Performance Breach *Any of the above Rebecca gave an exclusive-right-of-sale listing to Broker Sammis of Sammis Realty to find a buyer for her residential lot. While Rebecca was vacationing with her family, Buyer Ken signed an offer to purchase Rebecca's lot at the full price and terms of the listing agreement. Wkich of the following is true regarding this situation? Because this is an exclusive-right-of-sale listing, Broker Sammis is authorized to accept the offer on Rebecca's behalf. Broker Sammis may accept the offer on Rebecca's behalf, as long as she gets Rebecca's signature on the contract immediately upon Rebecca's return. *The exclusive-right-of-sale listing does not give the authority to accept the offer on Rebecca's behalf. Broker Sammis may accept the offer because it is a full-price offer. When a contract is assignable and is assigned without the consent of the other contracting party, the assignor: is free of the obligation to perform the contract terms and conditions. *is not free of the obligation to perform the contract terms and conditions. has legally transferred and assigned all responsibility for performance. may not legally assign any right to compensation. Which of the following applies to exclusive-right-of-sale listings? The broker is due a commission regardless of who finds the buyer. The listing may be submitted to the MLS by the listing broker. The seller must consent to the terms of the listing agreement. *All of the above An owner refuses a written offer of the listing broker's prospective buyer, who has agreed to the terms of an exclusive-right-of-sale listing contract. The owner later accepts a higher price from another broker's buyer. The owner: is obligated to pay two commissions. is obligated to pay only the second broker. must have given an open listing. *is obligated to pay only the listing broker unless there is a contract of employment (implied or otherwise) with the second broker. Joshua (age 15) entered into a contract with Ken, who is of legal age to contract. Which of the following is true regarding this situation? Joshua is obligated to honor the terms of the contract. Ken may divest himself of his obligations under the contract because the contract is invalid. *Joshua may choose to divest himself of his obligations under the contract. This contract is a void contract. Signatures of both parties (seller and agent) on a single agency exclusive-right-of-sale listing contract create which of the following conditions? (Choose all that apply) *I. A bilateral contract has been completed. *II. A fiduciary relationship has been created. III. The broker acquires disposition control. *IV. The broker may be required to find a purchaser. Normally, a sale contract involving real property contains a provision that in case of breach by the buyer, the earnest money deposit will be regarded as: compensatory damages to the seller. *liquidated damages to the seller. compensatory damages to the broker. liquidated damages to be divided between seller and buyer. The most advantageous type of listing from the broker's point of view is a(n): open listing. exclusivelisting. *exclusive-right-of-sale Listing. net listing. An enforceable option contract: (Choose all that apply) *I. must be in writing. *II. is an agreement. *III. is a unilateral contract. *IV. will include a consideration. To obtain an option on a property as a true optionee, a broker or salesperson must: (choose all that apply) I. establish with the owner that he or she is functioning as a licensee. *II. divest himself or herself of the role as licensee or fiduciary. *III. provide in the contract for substantial consideration. IV. use the option contract as an exclusive-right-of-sale listing contract. Normally, when an option allows the consideration to be returned in full to the optionee in the event the option is not exercised, the option: *is not a binding contract. must have been given to a licensee. need not contain the complete terms of the transaction. is automatically converted into a bilateral contract. In addition to the information required to be in all contracts, a real estate sale contract must contain: (choose all that apply) *I. the purchase price and consideration. *II. property identification. *III. closingdate. *IV. other terms, as appropriate. Kathy and Bob have decided to make a written offer to purchase a quaint little home built in the 1950s. Prior to signing the sale contract, what must occur? (choose all that apply) *I. Kathy and Bob must be given a copy of the EPA pamphlet concerning lead-based paint hazards in the home. II. Kathy and Bob must have the home inspected for lead-based paint. *III. The seller must disclose any known presence of lead-based paint. *IV. The buyer must sign a disclosure form regarding lead-based paint prior to signing the sale contract. It is important that a buyer's wife join her husband in executing a sale contract because: (choose all that apply) I. this indicates a willingness to convey her ownership rights. *II. she also becomes bound to purchase the property. *III. it indicates her agreement to the price and terms. ------------------------------------------------------------------- 'Real Estate Chapter 12 Test Review ------------------------------------------------------------------- In a fully amortized, level-payment plan mortgage, the portion of the monthly payment that goes to reducing the principal: remains constant throughout the loan term. *gradually increases with each payment throughout the duration of the loan term. gradually decreases with each payment throughout the duration of the loan term. fluctuates based on the prevailing interest rates. A term mortgage differs from a level-payment, fully amortized mortgage because of the: index chosen. number of points that may be charged. *method of repayment. criteria used to qualify the borrower. In a mortgage transaction in Florida, the legal evidence of the personal debt is the: property (collateral). *note mortgage instrument. borrower's credit history. A financing vehicle in which the vendor holds title to the property until the buyer has met the stated obligations is a: balloon mortgage. purchase-money mortgage. *contract for deed. term mortgage. In title theory states, the mortgage clause that provides that the conveyance of title to the lender is defeated when all of the terms of the agreement have been fulfilled is the: penalty clause. release clause. *defeasance clause. insurance clause. If a foreclosed property fails to bring sufficient proceeds at the foreclosure sale to pay the debt, the lender: must absorb the loss as a bad investment. may seek recovery of the loss from the Real Estate Recovery Fund. may obtain an interpleader judgment for the amount of deficit. *may obtain a deficiency judgment for the amount of deficit. Which of the following statements is(are) true regarding discount points? Discount points are negotiable. Points are charged by a mortgagee to increase the loan's yield. FHA, VA, and conventional loans can include points. *All of the above Which of the following is(are) considered an advantage of home equity loans? The interest rate is typically lower than the prevailing home mortgage rate. *Home equity loans do not create a lien against the borrower's residence. The interest on most home equity loans is tax deductible. All of the above The current maximum FHA loan available for a single-family dwelling is: *dependent on the location $67,500 $108,000 $203,000. Rebecca and Tony purchased their first home in January. The interest rate was based on the property being owner-occupied. In May of the same year, Rebecca and Tony decided to live on their sailboat and make a two-year trip around the world. Tony and Rebecca rented their home to Tony's best friend, Brad. The lender soon notified the couple in writing of the mortgagee's intent to increase the interest rate on their loan to the investor rate of interest. The lender was proceeding under which of the following clauses? Acceleration clause *Escalator clause Defeasance clause Release clause The maximum amount of a VA loan is: $203,000. $50,750. $46,000. *not a legislated limit for qualified borrowers. Tony wants to buy a small restaurant and is considering financing the restaurant equipment in addition to the real estate. If Tony pledges the personal property in addition to the real estate as collateral for the mortgage, Tony's mortgage is a(n): equipment mortgage. *package mortgage. all-inclusive mortgage. chattel mortgage. A borrower who is in default on his or her mortgage is allowed to prevent the lender from foreclosing on the property by paying the mortgagee the delinguent principal and interest, plus any expenses the mortgagee has incursed in attempting to collect the payments. The right is referred to as: novatation a satisfaction of mortgage. *the equity of redemption. an acceleration clause. A lender declares all the unpaid balance due and payable as a result of a default. The lender is exercising the: *acceleration clause. due-on-sale clause. defeasance clause. scalator clause. The person who borrows meney to help pay for the purchase of real Property is called at various times the: (choose all that apply) I. lender *II. mortgagor III. mortgagee *IV. borrower. The mortgage provision that relieves the mortgagor, from any personal liability for the debt so that the mortgagee can look only to the mortgaged property for reimbursement in the event of default is: novatation estoppel certificate *exculpatory clause subordination clause When a vendee buys "subject to the mortgage," the: vendee becomes responsible for the note. original obligation is substituted with a new note by novation. vendor is relieved of the obligation for the promissory note. *vendor remains responsible for the note. Blanket mortgages: are illegal. *typically include a partial release clause. include equipment and other personal property. None of the above Bob and Stella have just made the final mortgage payment on their home. What document should they request the mortgagee to file on their behalf? Lis pendens Novation *Satisfaction of mortgage Estoppel certificate A new mortgage accepted by the seller as part of the purchase price is a(n): wraparound mortgage. shared-appreciation mortgage. assumption of the mortgage. *purchase-money mortgage. If a mortgagee does not want the mortgage to be paid ahead of schedule, the mortgage will normally contain a(n): *prepayment penalty clause. redemption clause. defeasance clause. acceleration clause. A mortgagor defaulted on a mortgage encumbering an apartment complex. Once the foreclosure proceedings were filed, the lender ~Ra"h~ed to the courts to appoint a(n): *receiver. on-site manager. attorney to handle the case. arbitrator. Which of the following is (are) true regarding the mortgagor's minimum cash investment on an FHA loan? ANSWER UNKNOWN Closing costs paid by the buyer may be applied toward satisfying the cash requirement. Seller-paid closing costs may be included when calculating the cash investment amount. A loan from the seller may be used to satisfy the cash requirement. All of the above An FHA loan is a: *government-insured loan. government-guaranteed loan. private loan that is insured with mortgage insurance. loan in which the mortgagor is protected against financial loss in the event of default. Which of the following apply to FHA 203(b) loans? (choose all that apply) [ANSWER UNKNOWN!] I. The loan program applies to loans for one- to four-family residences. II. The maximum insurable loan limit varies from area to area. III. Borrowers are required to pay a one-time upfront mortgage insurance premium. IV. The program provides fixed-rate loans based on market interest rates. A potential borrower's monthly housing expense is $504, the total monthly gross income is $1,800, and the total monthly obligations are $648. With a conventional loan, what is the monthly housing expense ratio for the borrower? *28 percent 38 percent 50 percent 54 percent The loan-to-value ratio is 80 percent. A buyer wants to acquire a property with a purchase price of $116,000. Calculate the required down payment. $20,000 *$23,200 $32,800 $92,800 The primary purpose of an estoppel certificate is to: prevent foreclosure. relieve the mortgagor of personal liability for the debt. *verify the loan balance. prevent transfer of title to the mortgagee. VA loans allow discount points to be paid by which of the following? The buyer The seller A third party, such as a relative *Any of the above ------------------------------------------------------------------- 'Real Estate Chapter 13 Test Review ------------------------------------------------------------------- Rebecca and Tony purchased their home for $125,000. They financed the purchase with an 80 percent conventional loan. The mortgagee charged 21/2 points. Calculate the actual cost in dollars of the points. $1,600 $2,000 *$2,500 $3,125 Which of the following functions as a primary lender, supplying funds for new loans? (Choose all that apply) *I. Commercial banks *II. Mortgage bankers III. Mortgage brokers *IV. Savings associations When the Fed incseases the reserve requirement: the supply of money increases. *the supply of money decreases. inflation usually immediately follows. mortgage interest rates decline immediately· A commercial bank sold a group of 2,000 mortgages directly to Fannie Mae. This is an example of: primary market activity. *secondary market activity. Loan correspondence. intermediation. Fannie Mae currently buys and sells: FHA mortgages. VA mortgages. conventional mortgages *All of the above Fannie Mae is a corporation: (Choose all that apply) *I. that is government regulated *II. whose stock is privately owned. *III. That was established to create a secondary market. IV. That deals directly with home buyers Which of the following entities originates loans and typically services the loans, but is not a financial intermediary? *Mortgage company Mortgage broker Life insurance company Fannie Mae When the Fed purchases securities, which of the following results? The supply of money in circulation is reduced. Interest rates begin to rise. *Loanable funds are released into circulation. Pressure is applied to increase the discount rate. Which of the following compete for the available supply of funds? Corporate stock Long-term bonds issued by governmental entities Financing the national debt *All of the above The market where mortgage loans are created, supplying funds to finance real estate purchases directly to borrowers, is referred to as the: *primary market. secondary market. capital market. real estate market. The primary purpose of Fannie Mae is to: reduce and stabilize mortgage interest rates. *purchase real estate loans to replenish the supply of mortgage money. make loans to low-income families. All of the above The demand for residential real estate mortgage money is influenced by: household formations. shifts in geographic preference for housing. household income. *Any of these choices. The Office of Thrift Supervision regulates: *savings associations. commercial banks. credit unions. the Rural Housing Service. The discount rate is: one percent of the loan amount. a rate adjustment factor used to increase the lender's yield on a loan. *the interest rate charged member banks for borrowing funds from the Federal Reserve Bank. approximately 1/8 of 1 percent for each point charged. The primary purpose of Freddie Mac is to: *purchase conventional loans from savings associations. regulate savings associations. insure mortgage loans. regulate conventional mortgage loan interest rates. When funds are withdrawn from thrift institutions by depositors for direct investment elsewhere, the process is called: loan correspondence. intermediation· *disintermediation. capital-deficit area support. Which of the following provide a source of income to lenders? Discount points Origination fees Servicing fees *All of the above The rule of thumb used to convert discount points to annual percentage rate is that each discount point increases the yield by approximately: *1/8 Of 1 percent. 1/4 Of 1 percent. 1/2 Of 1 percent. 1 percent. A lender charged 7 percent plus 3 points. What is the approximate yield on this loan? 7 1/4 percent *7 3/8 percent 7 1/2 percent 7 3/4 percent The most commonly used method of controlling the national money supply is for the Fed to: *engage in open-market activities. change the discount rate. change the reserve requirement. None of the above ------------------------------------------------------------------- 'Real Estate Chapter 14 Test Review Essay Question ------------------------------------------------------------------- PRACTICE CLOSING STATEMENT PROBLEM: Mr. and Mrs. Will B. Sellers sold their home, described as Lot 12, Block A, Pine Scent Subdivision, to Mr. and Mrs. Hap E. Buyer for $82,800. The closing date is scheduled for January 15, 20XX. The Buyers paid an earnest money deposit of $4,000, which you, the real estate salesperson, promptly gave to your broker to be held in escrow. The Buyers will sign a new note to assume a recorded mortgage with a remaining balance of $59,640 and an interest rate of 10 percent. Monthly payments for principal and interest are $544.10. The mortgage interest for January is $496. The Sellers have agreed to take back a $15,000 purchase-money second mortgage. City property taxes are estimated to be $684; county and school board taxes are estimated to be $973. The Sellers' attorney's fees will be $120, and the Buyers' attorney's fees will be $150 for the preparation of the new financing instruments. The recording fee for the deed will be $8, and the recording fee for the new mortgage and notes will be $24. The Buyers have agreed to pay all costs related to financing the purchase. The Sellers have agreed to pay $75 of the total title insurance costs, and the Buyers will pay $430 for the balance of the title insurance costs. An appraisal fee of $120 is to be paid by the Sellers. All prorations are to be computed using a 365-day year and will be effective at midnight before the date of closing, with the day of closing to be charged to the buyer. The brokerage sale commission is 7 percent of the purchase price. All costs are to be paid by cashier's check at closing. Q: How much will the Sellers pay for the required tax on the deed? $165.60 $289.80 $455.40 *$579.60 If interest on the mortgage is paid in arrears each month, who will owe whom how much for interest in January? *Sellers will owe Buyers $224. Buyers will owe Sellers $224. Sellers will owe Buyers $272. Buyers will owe Sellers $272. How much will the Buyers be required to pay for taxes related to the new second mortgage? $291.45 $105.00 $52.50 *$82.50 How much will the Sellers need to credit to the Buyers for property taxes? $1,593.44 $1,588.90 $37.32 *$63.56 ------------------------------------------------------------------- 'Real Estate Chapter 14 Test Review ------------------------------------------------------------------- A senior salesperson receives 55 percent of all sale commissions earned. His broker has listed a motel for $1,450,000. The listing contract specifies a 6 1/2 percent sale commission for the first $600,000 of selling price, 7 percent for the next $800,000, and 8 percent commission on all of the actual sale price exceeding $1.4 million. What will the salesperson's commission be if he sells the motel for the listed sale price? $44,550 *$54,450 $95,000 $99,000 The interest portion of Mr. Highland's first monthly payment on a 30-year, 12 percent mortgage amounts to $550. If the loan-to-value ratio for Mr. Highland's house is 80 percent, how much did he pay for the house? $44,000 *$68,750 $110,000 $171,875 You bought a house for $120,000. You gave a deposit of $10,000, assumed a recorded mortgage of $90,000, and signed a new second mortgage and note for $20,000. What are the total state taxes due as a result of this transfer of property? $1,445 $1,405 *$1,265 $950 A broker lists a property, a 7 percent commission is agreed to, and the listing is placed in the MLS. The sale commission is to be split as follows: 45 percent to the listing broker and 55 percent to the selling broker. A salesperson who works for a cooperating broker sells the property for $160,000. The salesperson's agreement with her employer calls for a 60 percent share of all commissions she brings to the company. How much is due the salesperson? $2,016 $2,464 $3,024 *$3,696 Ms. Judy owned 3/8 of a property. She was paid $45,000 as her share of the proceeds from the sale of the property. What was the total selling price of the property? *$120,000 $90,000 $72,000 $61,875 To get a mortgage loan of $31,000, a buyer has agreed to pay all state tax costs incurred by creation of the new mortgage. What is the total cost? $62.00 $108.50 *$170.50 $217.00 You have a VA mortgage of $48,000 at 9 percent with a 30-year term. The monthly principal and interest payment is $386.21. What portion of the second month's payment will apply to amortization of the mortgage? $26.21 *$26.41 $359.80 $360.00 In the mortgage cited in question above, what would the monthly payments amount to if your property taxes were $840 and your annual insurance $176? $400.88 $407.88 $456.21 *$470.88 Barbara bought three 200-foot lots on a lake for $500 per front foot each. Barbara then subdivided these lots into six lakefront lots, which she then sold for $62,500 each. What was her percentage of profit on the sales? 20% 25% 75% 80% A warehouse measures 720 feet by 500 feet and rents for $118,000 a month. What is the rent per square foot per month? $0.25 $0.33 $3.05 $3.96 Mr. Jones incurred a 20 percent loss when he sold a 10-acre parcel (Tract A) for $100,000. He also owns a 25-acre parcel (Tract B) for which he paid $200,000. How much must he sell Tract B for if he wishes not only to recover his loss from Tract A but also to realize a 20 percent profit on his investment in Tract B? $260,000 *$265,000 $270,000 $275,000 Mr. and Mrs. Greer are purchasing the Hogue's apartment building. Each of the five apartments rents for $315 per month. The closing is scheduled for September 16, and the rents were collected on September 1. What is the rent proration for this transaction and to whom will the amount be credited? (Day of closing belongs to the buyer.) $157.50, credit buyer $735.00, credit seller *$787.50, credit buyer $812.90, credit seller A 28.5-acre parcel of land sells for $4,100 per acre. What is the documentary stamp tax on the deed? *$818.30 $817.95 $642.85 $409.15 ------------------------------------------------------------------- 'Real Estate Chapter 15 Test Review ------------------------------------------------------------------- Valuation of real property is an: estimate of cost. *estimate of value. exact value. assessment of cost. The total expenditure required to bring a new improvement into existence is referred to as: *cost. price. market price. market value. Inherent in the definition of market value is(are) the assumption(s)that: (choose all that apply!) *payment is made in cash or its equivalent. *neither the buyer nor the seller is under any compulsion to act quickly. *both buyer and seller are fully informed. market value is the median price a property will bring. The approach to estimating value that is referred to as the real estate market speaking through past sales because it utilizes actual sales transactions is the: transactional comparison method. economic indicator method. *sales comparison method. sales transaction method. When more money is invested in a building than can reasonably be expected to be recaptured, it is referred to as: economic lack of utility. *overimprovement. underimprovement. depreciation. The most probable price in terms of money that a property will bringin an open market is called the: highest and best use. sale price. *market value. exchange value. Loss of value for any reason is called: transferability. substitution. *depreciation. economic obsolescence. All of the following are characteristics required to create value except: demand. *supply. utility. transferability. The approach to value most likely to be relevant for appraising a community college is the: comparable sales approach. *cost-depreciation approach. income capitalization approach. straight-line approach. In the income capitalization approach, value equals: *net operating income divided by an appropriate capitalization rate. net operating income multiplied by an appropriate capitalization rate. an appropriate capitalization rate multiplied by value. an appropriate capitalization rate divided by net operating income . The most relevant approach to estimate the value of a vacant lot in a residential neighborhood usually is the: square-foot approach. cost-depreciation approach. unit-in-place method. *sales comparison approach. In the comparable sales approach: (Choose all that apply) adjustments are made to the subject properties. *adjustments are made to the comparable properties. the subject property must have sold recently in the same market area as the comparable property. the result is considered to be the median value. The basis of all three approaches to market value is the principle of: situs. *substitution. overimprovement. economic potential. All of the following may be subject to depreciation in the process of applying the cost depreciation approach except: a poor traffic pattern in a home. new solid oak wood cabinets and marble tile floors in a neighborhood of $80,000 homes. older site improvements. *land. Which of the following would be considered to be external obsolescence? Peeling exterior paint One bathroom in a three-bedroom home Metal utility shed that is in poor condition located just inside the property line *A residential property's proximity to an industrial area Loss in value due to operational inadequacies, poor design, or changing tastes is referred to as: physical deterioration. *functional obsolescence. external obsolescence. underimprovement. A small income-producing property has a projected effective grossincome of $48,000. Expenses are estimated at 20 percent of effectivegross income. An appraiser has determined that an appropriate capitalization rate, based on property type and competing properties,is 9 percent. Calculate the estimated market value of this property (round to nearest dollar). $106,667 $311,111 *$426,667 $533,333 The economic characteristic that refers to the preference for a certain location owing to various factors such as climate, employment outlook, and so forth, is called: A, highest and best use. plottage. economic preference. *situs. The total estimated time in years that an improvement can be profitably useful is referred to as: effective age. *economic life. accrued depreciation. chronological age of the improvement. In the income capitalization approach, if the capitalization rate is increased and the net income is unchanged, the: *present value will be less. future value will be less. present value will be more. future value will be more. A home has 1,800 square feet of living area and 200 square feet of garage. The reproduction cost new is $48 per square foot for living area and $28 per square foot for finished garage areThe site measures 75 feet wide by 110 feet deep and is valued at $3 per square foot. The economic life of the home is estimated to be 50 years. The house is 10 years olCalculate the value of the property using thej cost-depreciation approach. $73,600 $86,400 $92,000 *$98,350 L & D, a limited partnership, wishes to purchase an apartment building that has a monthly net income of $4,000 and monthly expenses of $1,000. If the L & D partnership is to get a 12 percent return on its investment, what should it pay for the property? $25,000 $33,000 $300,000 *$400,000 An income-producing property has a potential annual gross income of $81,420. Vacancy and collection losses are estimated at 10 percent of potential gross income. Expenses are estimated at $40,000. The estimated value of the property is $250,000. Calculate the capitalization rate for this property· *13.31% 14.91% 16.57% 17.5% The Gigis' home recently sold for $58,500. The rent on the home is $450 per month. The GRM for the home is: *130. 108. .09. .01. An appraiser is calculating the reproduction cost new of a home,using the comparative square-foot method. The appraiser measured the exterior dimensions of the home, which were 27 feet by 52 feet, plus a detached garage measuring; 22 feet by 24 feet. The appraiser consults an accepted cost manual and estimates the reproduction cost for heated and air-conditioned living area to be $52.50 per square foot and the finished free-standing garage to be $32.50 per square foot. Calculate the reproduction cost new of the improvements. $62,790 $73,710 *$90,870 $201,430 Effective gross income is: net operating income divided by an appropriate capitalization rate. *potential gross income minus vacancy and collection losses. net operating income minus annual mortgage expense. before-tax cash flow divided by equity invested. Analyzing the sale price and income of comparable investment properties (NOI / (divided by) sale price) is a common way of determining the: *overall capitalization rate. gross income multiplier. dollar amount of profit. market value. A building is valued at $150,000 when NOI is capitalized at a rate of 8 percent. NOI is 40 percent of effective gross income. Calculate the effective gross income. $12,000 $22,000 *$30,000 $32,000 A commercial property has a potential gross income of $40,000.Vacancy and collection losses are 5 percent of PGI. Additional operating expenses total 512,920. The property has a first mortgage requiring payments of $1,070.75 per month. Using a capitalization rate of 12 percent, which of the following amounts is an accurate estimate of the property's value? $101,333 $107,667 *$209,000 $326,667 ------------------------------------------------------------------- 'Real Estate Chapter 16 Test Review ------------------------------------------------------------------- A type of foundation that is used in low-lying coastal areas is called: slab-on-grade. floating foundation. *pier foundation. monolithic slab foundation. A type of frame construction that allows for large spans between supporting side walls is: balloon frame. *post-and-beam construction. platform construction. pier frame. If you were to build a commercial structure and because of limited ground space wanted to install the mechanical equipment on the roof, which of the following roof designs would be most appropriate? *Flat Gambrel Mansard Saltbox In areas near water in kitchens and bathrooms, building codes require special electrical outlets referred to as: circuit breakers. grounded outlets. *ground-fault interrupters . step-down outlets. You want to replace a ceiling fan and have removed the old fixture. The wiring to the old fixture consists of three wires: a black wire, a white wire, and a green wire. Which wire is the ground wire? Black White *Green There is no ground wire The pipe that carries water to the hot water heater is referred to as a: hot water main. *cold water main. soil stack. supply pipe. The purpose of a U-shaped trap under a kitchen sink is to: prevent food debris from traveling through the plumbing pipes. catch a small object such as a wedding ring before it enters the soil stack. equalize the air pressure in the drain system. *prevent combustible gases from entering the home. An electrical cable stamped with the words "6/2 with ground" is most appropriate for wiring to a: ceiling fan. table lamp. *window air conditioner. home fax machine. You are interested in adding additional roof insulation to your home to reduce your monthly electrical bill. Which of the following government agencies establishes minimum recommended R-values specific to your local area? *Department of Energy Department of Housing and Urban Development Fannie Mae Environmental Protection Agency You are walking through a seller's contemporary-design home. There are windows set high into a loft area, that are not designed to be opened. They function simply to bring light into the loft. What window type does this describe? Jalousie Casement *Fixed Hopper ------------------------------------------------------------------- 'Real Estate Chapter 17 Test Review ------------------------------------------------------------------- Investors who want to invest in office buildings and apartment complexes but want the advantages of liquidity and diversification often consider investing in a: *real estate investment trust. large property management company. mutual fund that invests in the broad stock market. None of the above A case in which the interest paid for borrowed funds is less than the overall rate of return to an investor is an example of: loan-to-value ratio. *positive leverage. negative leverage. yield. 3. Business risk (operating business risk) is chance of loss associated with the: *variance between projected and actual income and expenses ability to pay all operating expenses from proceeds generated by the investment. increase in interest rates during the period of investment. effect of inflation on purchasing power. Investment value is: market value. effective gross income capitalized by an appropriate rate of capitalization. the worth of an investment property offered on the open market with no time constraints. *the worth of an investment property to an individual investor based on the investor's standards. Which of the following should an investor consider in evaluating a real estate investment? Liquidity Tax considerations Stability of income *All of the above A phosphate mining facility would be regarded as a(n): destination property *origin property secondary industry commercial property For investment purposes, the value of an int·eshnent property should be based on the: *property's return and the appreciation it will yield. cost to reproduce the property. prestige and appreciation the investment will affor net income of the property capitalized by current market capitalization rates. All of the following are considered intangible assets of a business except: goodwill. customer loyalty trademarks. *improvements. Which class of stock must all corporations have? Debenture bonds Preferred stock Convertible bonds *Common stock A firm's working capital is customarily defined as the difference between the firm's total: *current assets and total current liabilities. current liabilities and total cash on hand. short-term liabilities and total cash on hand long-term liabilities and total accounts receivable. Business brokerage differs from real estate brokerage in which of the following ways? There is usually the need for an appraisal. *An interest in real property is involved Intangible assets must be considered. Chattels may be included. The financial report that indicates a firm's financial position at a stated moment in time is the: operating statement. *balance sheet. working capital statement. statement of net earnings. The value of an established business property, compared with the value of just the physical assets of a business that is not yet established, is referred to as: *going concern value. goodwill. business enterprise tangible assets. All of the following are reasons for appraising a business and its assets except: to obtain financing. when a governmental unit intends to exercise its power of eminent domain over a business location. when a business has been destroyed by known or unknown causes. *to ensure ihat all pertinent state and iederal securiiies laws are complied with. A concise summary of all income and expenses of a business for a stated period of time is the: balance sheet. *income statement. cash flow statement. asset sheet. AH of the resources of a business, including tangibles and intangibles, are referred to as the: net worth. capital. gross income. *assets. The cost to duplicate exactly the business or building being appraised is the: replacement cost. benchmark. *reproduction cost. liquidation analysis. Investment in an apartment building is regarded as economically feasible if it: shows an appropriate return on the investment. *shows an appropriate return on the investment and recovers the invested capital. does not show a negative cash flow. does not show a negative after-tax cash flow. Rent is $1,800 per month plus 3 percent of gross sales. The total rent for last month was $2,400. Calculate the gross sales for the same month. *$20,000 $24,000 $30,000 $60,000 ------------------------------------------------------------------- 'Real Estate Chapter 18 Test Review ------------------------------------------------------------------- In Florida, real property taxes are levied on a: county fiscal-year basis. *calendar-year basis. fiscal-year basis. quarterly basis. Each year in Florida, property taxes for the previous year become delinquent on: January 1. *April 1. November 1. December 31. The first step in protesting the assessed value of real property is to: *contact the county property appraiser or a representative. contact the county tax collector or a representative. contact the Value Adjustment Board. file suit against the Value Adjustment Board. The Value Adjustment Board is composed of: the city manager, property appraiser, and three other elected officials. three school board members and two county commissioners. *two school board members and three county commissioners. five school board members and two county commissioners. Federal, state, and public school properties are all: exempt from taxation. *immune from taxation. subject to taxation but released from the obligation. Both exempt and immune. You have been granted homestead tax exemption. Your assessed property value is $65,000. What is your taxable property value forcounty taxes? $65,000 $60,000 *$40,000 $25,000 What would be your city and county property taxes if the property assessment is $38,000, you are a Florida resident receiving homestead tax exemption, and the total tax rate is 28 mills? *$364 $380 $429 $924 A 25 percent service-disabled veteran, who is 75 years of age, has been granted homestead tax exemption. What will his total property tax exemption be? $25,000 *$25,500 $26,000 Totally tax-exempt. In arriving at a just value for agricultural property, the highest and best use: *is not a factor. of the property must be for agricultural purposes only. discourages speculative investing in agricultural land. encourages speculative investing in agricultural land. All of the following apply to Florida's Green Belt Law except: it is intended to protect farmers. it shields the farmer's land from excessive taxation. it has been strengthened by qualifying agricultural land annually. *the law is intended to promote clean air and water. Ad valorem taxes include: I. real property taxes. II. special assessments. I only II only Both I and II *Neither I nor II If a lot frontage is 100 feet, street paving costs are $40 per running foot, and the city will pay 25 percent of paving costs, what will be the assessment to the property owner? $1,000 *$1,500 $3,000 $4,000 Mary is a widow who owns a home in Gainesville, Florida, in Alachua county. The city tax rate is 9.3 mills, the county rate is 9.7 mills, and $the school board tax rate is 6 mills. She has homesteaded her principal residence. The amount of savings in property taxes realized by all allowable tax exemptions is: $625.00. *$637.50. $697.50. $700.00. Current state law allows the buyer of property tax certificates to collect interest UP to a maximum of: 12 percent. *18 percent. the tax rate in each county. allowable interest voted by the residents of each county. A county or city millage rate is determined by: *taking into account the Operating budgets of the various govenunent departments within the city or county majority vote of the registered voters. the mayor or county commissioners after the period for filing a protest has expired the State Legislature. In 2001,tax payer Cary Ohver had a $20,000 gain from the sale of investment property A, a $19,000 loss from the sale of investment property B, and a $5,000 loss from the sale of his principal residence. All three properties were owned for more than 12 months. Carry's only other income was his $50,000 salary. What is his 2001 total income for tax purposes, using just this information? $46,000 $47,000 $50,400 *$51,000 If a married couple who files jointly realizes a profit from the sale of their home that exceeds $500,000, what is the result? The homeowners will not pay capital gains tax if at least one of them is over 55. Up to $125,000 of the excess profit will be taxed as a capital gain. *The excess gain will be taxed at the current applicable capital gains rate. The excess gain will be taxed at the homeowner's income tax rate. The maximum amount of profit that may be excluded from taxationon the sale of a home for a qualifying couple, filing separately, is: 0; profit may be only deferred. $125,000. $150,000 *$250,000. All of the following are tax advantages of homeownership except tax deduction elf property taxes paid. penalty-free withdrawal from an IRA if used as a down payment on a personal residence for first-time home buyers. exclusion of gain from the sale of a principal residence up to $250,000 ($500,000 for married couples filing a joint return). *tax deduction of mortgage payments. For tax purposes, when the installment sale method is used: *gain is reported as payments are received. gain or loss is reported as payments are received. gain must be deferred. gain or loss must be deferred. When finding taxable income, all of the following are allowed as deductible expenses for an income producing property except: depreciation, *mortgage principal payments. maintenance payments. mortgage interest payments. A good tax-sheltering real estate investment is one in which: debt service is greater than net operating income. the secondary purpose is the productivity of the property. the primary purpose is reduction of personal taxable income. *the amount of depreciation taken for tax purposes is greater than the actual depreciation of the property. ------------------------------------------------------------------- 'Real Estate Chapter 19 Test Review ------------------------------------------------------------------- Any economy in any nation must find answers for the following questions: What will be produced? Who will do the producing? and: When will production cease? What will production cost? *Who will get what is produced? Which producers will produce what? The company who will do the producing is the: biggest producer of a given product. company that budgets the most for product promotion. company that uses only part-time help to avoid expensive employee benefits. *most efficient producer of a comparable-quality product. The ultimate decision makers in the marketplace are: salespersons. producers. manufacturers. *consumers. The real estate market is characterized by all of the following except that: it is local in nature. *the market is quick to respond to changes in supply and demand. there is no standard product. the market is unorganized. The real estate market is local in nature because: the product cannot be standardized. there is no central source of national real estate information for particular parcels. every parcel is unique--no two tracts of land are identical. *All of the above Government controls influence the real estate market both directly and indirectly. An example of an indirect control is: zoning ordinances. building moratoriums *Monetary policy. building codes. Which of the following is(are) associated with the economic concept of demand? (Choose all that apply!) *Demand is the desire and ability to purchase or lease goods and services, *Changes in price cause an inverse change in demand. *Consumer preferences influence demand. The availability of building materials influences demand. Variables that influence demand include: consumer tastes and preferences. population size and household composition.consumer income. *All of these. IRS tax statutes regulating depreciation of income-producing property: *encourage real estate ownership. directly affect the supply and demand equilibrium. affect the available supply of income-producing property. All of these. When the equilibrium of the real estate market is upset by an excess supply: builder activity increases in response to the need. a seller's market exists. *a buyer's market exists. demand decreases. One person or a group of persons occupying a separate housing space is technically defined as a: unit. household. family *multiple ownership unit. The most important cause of population increase in Florida has been the: increase in consumer income. number of births exceeding deaths. *in-migration of new residents. expansion of mortgage credit. The barometer of the real estate market is considered to be the: change in consumer income. cost and availability of credit. number of housing starts. *change in consumer tastes. The typical home buyer today is concerned primarily with the: style of the house being current. total cost of the house. *amount of the monthly mortgage payment. occupancy and vacancy ratios. Factors affecting the supply side of the real estate market are related to: availability of land. availability of skilled labor. availability of material. *All of the above ------------------------------------------------------------------- 'Real Estate Chapter 20 Test Review ------------------------------------------------------------------- One of the major reasons for the lack of emphasis on city planning inthe 1800s was the: focus on identifying and locating rural tracts for farming using a new method of describing real property. *philosophy of laissez-faire. reduction in university course offerings in real estate and urban development. exodus from the farms to the cities for jobs. The subsection in Florida's Growth Management Act that requires that parks, roads, sewers, and drinking water be available before new development is allowed is referred to as the: utilities provision. infrastructure provision. *concurrency provision. level of service provision. A planning commission is normally composed of: trained professional planners. elected officials. *appointed unpaid members. members of the primary legislative city or county body. The best composition of a planning commission is generally thought to be one with representation from: each licensed professional occupation. senior adult homeowners because of their experience. real estate and mortgage lending firms. *cross section of interests. In municipalities with planning commissions, the final authority in planning matters is the: planning commission chair person. professional staff director. *elected city government officials. planning commission support staff supervisor. The primary function of a planning commission is to: *make policy recommendations to the elected government body. make policy recommendations to the trained professional staff. advise the next higher planning board (county, regional, etc.) of its recommendations and actions. collect, refine, and produce the basic studies needed to develop a comprehensive plan for future growth. A strip of land that separates one land use from another is referred to as a(n): easement. egress. *buffer zone. median. The most basic of all the background planning studies is the: economic base study. land-use study. community facilities study. *population study. A land-use study: shows where future land uses should be. involves plotting each parcel on a land-use map. requires an inventory of public and private land uses. *does all of the above. Population background studies include an estimate of: *The number of new households expected to move into the area. the best housing markets of the future. the future cost of social services. All of the above Base industries contribute to stability and growth; service industries are the businesses that: *do not attract much outside money to the area. attract outside money to the area manufacture and export products create and export service assistance. Physiographic studies reveal the: physical location of shopping centers and subdivisions. transportation network structure. *surface and subsurface structure of land. density and intensity structure of population. Thorough fare studies are normally a: city project. county project. state project. *cooperative project. To be granted a variance, a property owner must provide evidence that: the same treatment has been afforded other owners. *a hardship related to land use exists. the variance, if granted, will be for the owner's use only. the land use existed before passage of zoning laws. Residential zoning is designed to regulate: intensity. frequency. *density. All of the above Commercial zoning is designed to regulate: *intensity. frequency. density. All of the above A small general store that existed before a change to residential zoning would be an example of a: special exception. variance. PUD. *nonconforming use. The legal right to enact zoning laws is derived from: *Police powers. public policy. property taxation. All of the above Zoning ordinances regulate: the firewall rating of a wall located between the kitchen and dining areas of a restaurant. *the setback requiremenis of a building from the property lines. the electrical rating of the wiring in a residential home. All of the above A parcel of land contains 75 acres. A developer has reserved 25percent of the land for streets and green space. Applicable zoning regulations require a minimum of 9,500 square feet per residential lot. Calculate the number of lots permissible. 86 232 *257 260 ================================== 'Real Estate Chapters 6-9 Test Review ================================== The City of Oldsmar wishes to take private property for the construction of a fire station. The city may acquire title in this situation by: *Codemnation adverse possession escheat to the city filing a property tax lien Title to real property legally transfers from grantor to grantee when the: deed is signed. deed is recorded. *deed is voluntarily delivered and accepted. proper amount of tax is paid on the deed. Courts at various levels have ruled that: constructive notice is superior to actual notice. actual notice is superior to constructive notice. neither constructive notice nor actual notice is required. *constructive notice and actual notice have equal legal priority. A ninety-two year old man is being forced from his home because of a government taking. The home has been in his family for four generations. What recourse, if any, does he have? He can file an injunction to stop the taking. He can pay the delinquent property taxes to prevent the foreclosure. *He may request a condemnation proceeding to protest the amount of compensation being offered by the government body. He may do all of the above. For a deed to be valid, a competent: grantor, grantee, and two witnesses must sign the instrument. *grantor and two witnesses must sign the instrument. grantee and two witnesses must sign the instrument. grantee only must sign the instrument. The type or form of deed most commonly used to clear clouds on the title of real property is the: general warranty deed. special warranty deed. bargain and sale deed. *quitclaim deed. If the sale contract does not specify the type of deed to be delivered, the seller is required to provide a: *general waranty deed. special warranty deed bargain and sale deed. quitclaim deed. The process of taking property under the power of eminent domain is called: escheat. foreclosure. *condemnation. voluntary alienation. The type of deed in which the grantor does not warrant the title in any manner except against his or her acts or the acts of his or her representatives is called a: general warranty deed. *special warranty deed. bargain and sale deed. quitclaim deed. The covenant against encumbrances in a deed is designed to guarantee that the: *grantor has not encumbered the property in any manner except as noted on the deed. grantee is responsible for any unpaid encumbrances. grantee has not encumbered the property. grantor will not encumber the property. The prupose of recording a deed is to: comply with real estate license law. effect the transfer of ownership. give actual notice of ownership. *give constructive notice of ownership. A valid instrument of conveyance of real property must be: (choose all that apply) *in writing signed by a competent grantee *witnessed notarized. The seisin clause in a deed specifies: the type of estate being conveyed. the improvements being transferred with the land. the rights reserved by the grantor. *that the grantor actually owns the property and has the right to sell it. The deed that contains the covenant in which the grantor guarantees that he or she will forever be responsible for warranting the title and will defend the title and possession is a: *general warranty deed. special warranty deed. public warranty deed. bargain and sale deed. The provision in a deed that names the parties and contains the granting clause is the: *premises. encumbrance clause. habendum clause. seisin clause. An owner placed a condition in the deed that stipulated that a commercial building could not be erected on the property until at least the year 2000. This is an example of: police power *deed restriction involuntary alienation governmental restriction on ownership An example of an encumbrance on title to real property is a(n): easement deed restriction lien *All of the above. When a lis pendens is filed properly witht he county clerk, it becomes a type of: attachment on the subject property. vendor's lien. *constructive notice. easement by prescription. Which of the following liens is first in priority? A property tax lien effective on January 1, 2001 A special assessment lien certified on December 31, 200. A first mortgage lien filed on July 15, 2001 A construction lien filed on November 30, 2000 The complete successive history of a parcel, from the time it was conveyed from a government to a private owner to today, is referred to as: an abstract of title. title insurance. warranty forever. *a chain of title. Mr. and Mrs. Lee signed a contract to purchase a home in a residential subdivision. When the Lees had the lot surveyed before closing, they discovered that the contractor had built the neighbor's garage three inches inside the west boundary of their lot. The garage in its present location is an example of a(n): deed restriction. easement by prescription. implied easement. *encroachment When a pathway to a property has been used continuously and without interruption for more than 20 years it creates an: implied easement. encroachment. alienation by adverse possession. *easement by prescription. Soon after Michael's death a deed was discovered behind a brick in the basement wall of his home. The deed is for Michael's home and it deeded the property to a charitable organization. Michael is survived by his son Andrew, who discovered the deed. Michael died intestate. Based on this information, the house belongs to the: state, because Michael died intestate. charitable organization because the deed conveyed ownership to it. *legal heir because the deed was never delivered and accepted. legal heir because the deed was not signed by the grantee. The owner's insurance policy is: issued for an amount no greater than the purchase price of the property and is transferable. *issued for an amount no greater than the purchase price of the property and is not transferable. a seperate policy for the amount of the unpaid balance of the mortgage and is transferable. a seperate policy for the amount of the unpaid balance of the mortgage and is not transferrable. Which of the following applies to easements? (choose all that apply) *An easement is a right given to or belonging to another for specific use of an owner's property. *An easement is a nonpossessory interest. *An easement is a type of encumbrance. An easement is unauthorized use of an owner's property. The things to remember when working with private restrictions are: *(DELL) [private restrictions] deed restrictions, easements, leases, and liens. (A BAR SALE) [real estate services] advertise, buy, appraise, rent, sell, auction, lease, and exchange. (MALE) [settlement procedures] mediation, arbitration, litigation, and escrow disbursement order. (IRMA) [fixtures] intent of the parties, relationship between parties, method of annexation, and adaption of the article. (DUPE) [bundle of rights, general property] Disposition, Use (control), Possession, and Exclusion (quiet enjoyment) (PET) [gov't restrictions] Police power, Eminent domain, Taxation. (PITT) [joint tenancy] Posession, Interest, Time, Title. What is a title? *A person who holds vested ownership rights in a property is said to hold a title. a written instrument used to convey an interest in real property. A deed conveys a legal title. An instrument of conveyance whereby title to real property is transferred from one party to another. The conveyance of real property by virtue of a last will and testament is a type of voluntary alienation because the person conveying the property by will (the testator) does intend to convey his or her property to a particular individual. Provides for a government (usually a state government), to take the property of an owner who dies interstate and without any known heirs entitle to receive the property. A "must have" clause in a deed *granting acknowledgment owner quitclaim Type of lien resulting from unpaid improvements to a property *construction mortgage constructive property tax Type of notice from reading or hearing information *actual notice constructive notice acknowledgement real property notice A type of lease where the tenant pays some of the building expenses *Net Lease Percentage Lease Ground Lease Gross Lease Power of property to convey to the state *Escheat Police Power Lien Property Tax Lien A written instrument that conveys title *deed actual notice encumbrance clause easement Type of deed where the grantor makes no warranties *quitclaim deed bargain and sale deed special warranty deed general warranty deed An official summary of documents filed in the public records *abstract of title certificate of title insurance title insurance habendum Acquiring possession because the owner sleeps on his rights *adverse possession escheat to the state eminent domain lis pendens A declaration by the grantor that signing is a free act *acknowledgement actual notice constructive notice habendum Legal process that is used in eminent domain *condemnation Eeed restriction Easement Property tax lien To die without a will is *intestate testate grant eminent domain Person conveying property in a will *testator intestator grantor grantee Sucessive changes of ownership are linked to form this *chain of title deed restrictions a lease involuntary liens Type of notice when the information is recorded and made public seisin *constructive notice granting clause habendum Notice of pending legal action *Lis Pendens Police power Eminent domain Legal Title An attorney prepares this after reviewing the abstract of title *title opinion chain of title constructive notice actual notice The conditions for adverse possession (DUPE) [bundle of rights, general property] Disposition, Use (control), Possession, and Exclusion (quiet enjoyment) (PET) [gov't restrictions] Police power, Eminent domain, Taxation. (PITT) [joint tenancy] Posession, Interest, Time, Title. *(HOTCAN) [conditions for adverse poss.] Hostile possession, open possession, taxes paid, claim of title, adverse possession for 7 yrs, notorious ownership of property. The type of lean resulting from a mortgage involuntary *voluntary Title insurance policy that is transferable *lender's title insurance owner's title insurance A legal right-of-way authorizing access *easement deed lease eminent domain Indicates the date and names the parties in a deed *premises section granting clause habendum seisin Optional title insurance for the full purchase price of the home *Owner's title insurance Lender's title insurance The most comprehensive interest in real property that an individual may possess is a estate for years *fee simple estate remainder estate life estate The physical components of real property are (choose all that apply) *surface *air space *subsurface equitable rights Fixtures are items that are fixed, or attached, to real property were once personal property, but are now real property have been incorporated as part of a real property *all of the above Frank and Lucile decide to get a divorce. In addition to their Florida honesteaded property, they own a vacant lot in the same subdivision acquired in both of their names during the marriage. How will the lot be distributed? The lot is considered to be seperate property and will be distributed equally between Frank and Lucille The real estate is community property and each spouse is entitled to a one-half interest in the lot. The interest in the lot will revert to a life estate and be distributed to the lineal decendants. *The lot is a marital asset and will be distributed equitably. There is no such thing as community property in Florida. *True. False. The bundle of rights associated with real property include the rights of: (choose all that apply) *use *possession *disposition *exclusion Mary and John were recently wed. Mary owns a residential lot that was purchased before the marriage. The lot is considered to be *seperate property community property a tenancy in common an estate by the entireties At the expiration of the lease period and before renegotiation of the lease, a tenant continued to occupy the apartment. The tenant's position is called a(n) tenancy at will *tenancy at sufferage freehold estate estate in reversion Lucy recieved a new microwave for Christmas. The microwave was installed abover her range by screwing the unit to the kitchen cabinets and venting it through the attic. The microwave would be considered: *a fixture a chattel seperate property personal property The homestead tax exemption is deducted from the: market value of a property *assessed value of a property sale price of a property total cost, including all improvements A husband and wife own a home with title in both names. The husband owns two small farms in his name only, acquired before the marriage. They have one minor child and one adult son. The husband dies. Which is most correct? The widow owns a life estate in all property. The property is split equally among the widow and the children. *The widow owns all of the home and may claim 30% of the two farms. The widow owns 30 percent of all of the real estate. The real estate protected by homestead rights is limited to: 640 acres outside a city or town and one acre in town. 160 acres outside a city or town and one-half acre in town 40 acres outside a city or town and one-half acre in town *160 acres outside a city or town or one-half acre in town A constitutional homestead is owned by Ralph, who is a head of a family consisting of himself, wife, and their three children. Ralph dies unexpectedly. After his death: The widow owns the homestead. *The widow owns a life estate in the homestead, and the children are vested remaindermen. The widow may claim elective share rights of 30% of the homestead, and the children devide the remainder. Any of the above. Which of the following estates feature right of survivorship? (choose all that apply) All freehold estates *estates by the entireties *joint tenancies tenancies in common Chapter 475, F.S., defines real property as any interest or estate in: land, improvements, leaseholds, subleaseholds, mineral rights, cemetary lots, or any assignment thereof. land, improvements, business enterprises and business opportunities, leaseholds, subleaseholds, mineral rights, mobile homes, or any assignment thereof. land, business enterprises and business opportunities, leaseholds, subleaseholds, mineral rights, cemetary lots, mobile homes, or any assignment thereof. *land, business enterprises and busines opportunities, including any assignment, leasehold, subleasehold, or mineral rights. In Florida, cooperatives and time-sharing are regulated by the: Division of Real Estate (DRE) *Division of Florida Land Sales, Condominiums, and Mobile Homes. Department of Housing and Urban Development. Florida Real Estate Commission. A condominium unit buyer has how long to cancel the purchase contract following the signing of an agreement with a developer? 3 days 10 days *15 days 20 days Which one of the following is required to be given by sellers of a cooperative, condominium, or time-share project? *Apportionment of expenses for common elements Names and business addresses of real estate salespersons assigned. Names of all current unit owners Names of unit owners, unit numbers, and amounts due from unit owners delinquent in monthly assessment fees. Which of the following characteristics are unique to cooperatives as opposed to condominiums and time-share plans? (choose all that apply) *The corporation holds title to the land and improvements. *A purchaser receieves shares of stock in the corporation. *A proprietary lease entitles the purchaser to occupy a unit. *The seller actually sells his or her stock in the corporation. All of the following apply to a constitutional homestead exemption except: Protection from forced sale for nonpayment of certain debts. deduction of $25,000 from the assessed value of the homesteaded property, if claimed. claimants must hold title to the property and use the home as their principal residence. *it automatically creates a tenancy by the entireties if the person filing for homestead is married. Ms. Lee Dade paid cash for a 60-acre lemon grove in Citrus County. The estate is for an indefinite period of time. Ms. Dade owns what type of estate in the property? (choose all that apply) *Fee simple estate *Freehold estate *Estate in severalty Leasehold When a tenant, after rightfully being in possession of a rented premises, continues possession after his right has ended, this creates a(n): tenancy at will *tenancy at sufferage fee simple estate estate for years Which of the following would not be included in the defintion of real property according to Chapter 475, F.S.? *Lot in a mobile home park interest in a business enterprise mineral rights time share unit A type of estate created when a husband and wife take title in both namesis referred to as a(n): joint tenancy *tenancy by the entireties tenancy in common estate for years An elective share consists of what percent of a decedent's net estate other than homesteaded property? 10 20 25 *30 The federal statute that prohibits a private homeowner from discriminating strictly on the basis of race if selling, renting, or leasing is the: *1866 Civil Rights Act. 1968 Fair Housing Act. 1934 National Housing Act. 1968 Interestate Land Sales Full Disclosure Act. The law that requires that lenders disclose the annual percentage rate (APR) of interest is: Real Estate Settlement Procedures Act (RESPA) Federal Housing Act (FHA) Florida Deceptive and Unfair Trade Practices Act (Little FTC act). *Consumer credit Protection Act (Truth-in-Lending). The federal 1968 Fair Housing Act prohibits discrimination based on: *race, color, religion, sex, national origin, familial status, or handicap status race or age relgion, age, race, familial status, or handicap status. race, color, relgion, age, or national origin. The Truth-in-Lending act: Does not affect real estate financing credit. attempts to regulate maximum interest rates charged customers. *requires disclosure of finance charges as well as annual percentage rates of interest. All of the above. The Real Estate Settlement Procedures Act (RESPA) was enacted to: establish maximum cost for all closing items. ensure that sellers are informed regarding the amount and types of expenses expected at closing. *ensure that buyers are informed regarding the amount and types of expenses expected at closing. establish a minimum cost for all closing items. If requested by the borrower, and to the extent that information is available to the closing agent, the borrower must be provided with which of the following at least one day before closing? *Uniform settlement statement. Borrower's special information booklet. Guaranteed amount of settlement costs. Notice of title-closing-agent selection. As part of the preparation for a closing, a listing broker referred a property owner to an appraiser. The appraiser completed the appraisal and charged the owner $250, which was enetered on the RESPA settlement statement. The appraiser gave the listing broker $50 for the referral, which the broker accepted. According to RESPA: The listing broker must be a licensed appraiser. the appraiser has not violated the law as long as he or she is state certified. *both the broker and the appraiser have violated the law. the arrangement is entirely legal. Which of the following is exempt from RESPA requirements? *The sale of a house where the only financing is assumption of an existing loan. A construction loan that will become a permanent loan only after the building is completed. A loan to purchase a new house in a new subdivision. All of the above. The intent of the Florida Residential Landlord and Tenant Act is to: give the tenant legal advantage in his or her relationship with the landlord. *make the landlord-tenant relationship more equitable. provide landlords the legal assistance needed to create an advantageous relationship. None of the above. When security deposits or advance rents are required by a landlord in Florida, such funds: must always be kept in a seperate account. *may be deposited in the landlord's account if he or she posts a $50,000 surety bond. must always be placed in an interest-bearing account. must bear interest at the rate of 7% The associates in a real estate office have been instructed to send all of their spanish-speaking prospects to a new subdivision "beautifully designed with a Spanish flavor." This is an example of: *steering subordination alienation blockbusting A landlord who rents a duplex to two tenants is obligated to provide: pest examination service garbage pickup service garbage receptacles. *all of the above unless waived in the rental agreement. Which of the following disclosure requirements are required to be given to tenants in multifamily units of 5 or more units? Notice of nonrepresentation. *Notice of where deposit is held within 30 days. 15 day cancellation privilege. All of the above. If a tenant vacates rented premises promptly when a lease or tenancy expires, the landlord must: Inform the tenant within 45 days if the landlord claims part of the security deposit. Return the tenant's security deposit within 30 days or explain any exception. Inform the tenant within 25 days if part of the tenant's deposit will be claimed. *Inform the tenant within 30 days if part of the tenant's deposit will be claimed. A tenant is obligated to Ensure that his or herguests do not disturb the peace. be reasonable in operating air-conditioning equiptment maintain interior plumbing in a clean and sanitary way. *all of the above. If a tenant's rent is current and he or she notifies the landlord of an intended absence, the landlord: *cannot enter the tenant's rented premises without the tenant's consent except in an emergency. Can enter only if accompanied by a second party. Can enter without any restriction None of the above. How long does a landlord have to correct a noncompliance that is brought to his or her attention by written notice from a tenant. *7 days 10 days 2 weeks 30 days A landlord must follow designated procedures in evicting a tenant. The first step in a legal eviction is to: personally deliver a written notice demanding possession. notify the tenant by mail of the landlord's demand for possession. attach a notice to the door of the premises that possession of the premises is demanded. *any of the above. The law requires that lenders furnish borrowers with a good-faith estimate of closing costs is the: Truth-in-Lending act. *Real Estate Settlement Procedures Act (RESPA) Consumer Credit Protection Act. Fair Housing and Lending Act. Which of the following phases may be legally included in an advertisement to sell real estate? (Choose all that apply) "Beautiful neighborhood, no young children please." "Quiet neighborhood, no young children please." "Spanish-speaking community." *"Cute cottage home, perfect for first time buyer." Discrimination under the Fair Housing Act regarding familial status would apply to which of the following individuals? A twenty-three year old college student. *A thirty-nine year old pregnant woman. A sixty-eight year old widow. All of the above. Can an insurance company refuse to provide insurance coverage to applicants within a particular neighborhood because of the socioeconomic characteristics of the neighborhood? Yes, provided the insurance company does not insure any of the homes within the neighborhood. Yes, there is no regulation concerning insurance companies and discriminatory practices. *No, to do so is redlining which is a violation of the Fair Housing Act. No, to do so is steering which is a violation of the Civil Rights Act of 1866. What federal law requires developers to provide prospective purchasers with a Property Report prior to signing a purchase contract? *Interestate Land Sales Full Disclosure Act Fair Housing Act Consumer Credit Protection Act Truth-in-Lending act. Which of the following phrases, if included in an advertisement for credit, would constitute "triggering terms." No down payment required. Financing available. *Pay only $1,102 per month All of the above. Which of the following phrases, if used in advertising real estate, would constitute a violation of the Fair Housing Act? Mother-in-law apartment Quiet Neighborhood Non-smoking tenants only. *No wheelchairs. If a tenant properly notified of the landlord's claim on the security deposit, the tenant is allowed how many days after the receipt of the landlord's notice to file and objection? 10 *15 30 45 Which of the following properties is covered under the Florida Residential Landlord Tenant Act? Commercial lease Extended stay motel *duplex unit medical facility The provision in the Growth Management Act that requires the infrastructure to be in place before new development can begin is referred to as the: comprehensive plan *concurrency provision unit-in-place provision. development of a regional impact. Families with children under age 18 and pregnant women. *familial status Redlining blockbusting handicap status Denying loans or insurance coverage or other restrictive practices by lending institution or insurer that present different terms or conditions for homes in certain neighborhoods. *Redlining Familial status blockbusting handicap status The probable cause panel includes: (choose all that apply) *a total of two members *at least one professional member *one consumer member, if available. *at least one current member. A person is eligible to seek recovery from the Real Estate Recovery Fund if: *She or he has receieved a final judgement against a licensee in any action wherein the cause of action was based on a real estate brokerage transaction, unless specifically precluded. she or he is a licensed broker who acted as the agent in the transaction that is the subject of the claim. her or his claim is based on a real estate transaction in which the broker did not hold a valid, current, and active license at the time of the transaction.any of the above events has occured. The decision as to wether probable cause exists is made by majority vote of the: Commission Commission or the Department, as appropriate. Administrative Law Judges *Probable Cause Panel (or the Department if there is no panel.) Which of the following actions would cause a license to be revoked without prejudice? a licensee accepted an earnest money deposit on a property that he knew was encumbered by an undisclosed lien. The broker obtained his license by means of fraud, misrepresentation, or concealment. *A salesperson receieved her license as a result of an administrative error by the Division of Real Estate. For the referral of real estate business a licensee shared a commission witha person (not party to the transaction) who did not have a real estate license. All of the following offenses are a misdemeanor of the first degree except: publishing false or misleading information. *obtaining a license by fraud or misrepresentation. failing to provide current or materially accurate rental information for a fee. failing to account for advance fees in a lawful manner. Jim, an ambitious, hard-working salesperson, was eager to snag a listing on a beautiful two-story home. The seller told Jim that the mortgage on the home also encumbered the adjoining vacant lot he owned. The seller plans to build a new home for his family on the vacant lot. Jim did not mention to prospects that the mortgage also included the vacant lot because he was confident that there would be enough seller proceeds to satisfy the lien at closing. Which of the following applies to this situation? This is legal as long as the lein is satisfied at closing. Jim must disclose that the lien also encumbers the vacant lot at the time of the offer is reducedto writing. *Jim is guilty of fraudulent and dishonest dealing by trick, scheme, or devise. Jim is guilty of culpable neglegence Susan's prospect inquired about the quality of title on a property. Susan was very knowledgable about this particular listing because she had listed and sold it two years ago to the current owners. At that time a title search was performed and a title policy was issued. Susan may: give an opinion of title based on her knowledge and experience with this particular property. give an opinion based on the title policy issued two years ago. *be subject to suspension of her license if she fails to advise the buyer to consult an attorney or to obtain title insurance. Which one of the following is required to prepare and submit a recommended order of findings and conclusions in a complaint case? Court of law. *Administrative Law Judge Probable cause panel. DBPR Any final order issued by the DBPR Secretary or a legally appointed designee, that results from Circumstances that pose immediate danger to the public's health, safety, or welfare is called a: Petition for review. stay of enforcement. *Summary of emergency suspensaion. License revocation Broker Jack of Farm Acres Realty listed a 15-acre farm. Jack accepted a $5,000 earnest money deposit from the buyer; however, the buyer was unable to secure financing, and requested that the funds be returned acording to the terms of the contract. Jack was unable to reimburse the buyer because he used the money to pay his office rent and other overhead. Jack is guilty of: dishonest dealing by trick, scheme, or devise. *failure to account and deliver. fraud. culpable negligence. The DBPR is authorized to investigate a written complaint filed against a licensee: *if the alleged complaint is legally sufficient. only if the claimant has been harmed by the actions of the licensee. only if the alleged violation was committed in the state of florida. only if all of the above conditions have been met. Neglecting to correct omissions or errors on alicense application returned by the DBPR to the applicant for correction is considered grounds for: suspensaion of an applicant;s rights. *denial of the application. revocation of the application. administrative revocation. If a broker's license is suspended, the licenses of all salespersons working for that broker are automatically: *canceled. denied. suspended. revoked. One of the grounds for the suspensaion or revocation of a licensee's license is the unauthorized use of retention of money or property, otherwise known as: concealment. *conversion culpable neglegence commingling. Less than careful attention to duties, one of the grounds for suspension or revocation of a licensee's license, is otherwise called: concealment. conversion *culpable neglegence commingling. When payment from the Real Estate Recovery Fund is made to satisfy a claim against a licensee because the licensee did not comply with an escrow disbursement order, the Commission's action against the licensee must be: citation. probation. *automatic suspension emergency suspension. Which of the following types of penalties may be imposed for violations of the real estate license law? Civil penalties only Administrative penalties only Civil and administrative penalties only. *Criminal, civil, and administrative penalties. Whenj a licensee is found guilty of a violation of chapter 475, F.s., the Florida Real Estate Commission may impose any of the following disciplinary penalties except: *imprisonment probation an administrative fine denial of a license application. One penalty that the Commission cannot legally levy is to: deny the issuance of a license. *deny the payment of compensation. suspend a license revoke and license. The collective amount to be paid from the Real Estate Recovery FUnd as a result of any one real estate transaction cannot exceed: $20,000 *$25,000 $75,000 There is no limit. Reasonable grounds or justification for prosecuting: *Probable cause Formal Complaint Subpoena Complaint an alleged violation of a law or a rule. *Complaint Probable cause Formal Complaint Subpoena Statement of an alleged violation and the penalty to be imposed *Citation Complaint Formal Complaint Subpoena an outline of charges against the licensee and must be answered within the statutory time limit. Citation Complaint *Formal Complaint Subpoena An administrative law judge’s findings and conclusions and the recommended penalty. Citation Complaint *Recommended order Subpoena ================================== 'Real Estate Chapters 10-14 Test Review ================================== The NW1/4 of the NE1/4 of the SW1/4, Section 20, Township 4 South, Range 2 East, describes a tract of: .125 acre .5 acre. *10 acres. 64 acres. Calculate the number of acres contained in the folowing legal description: NE1/4 of the SE1/4 and the SE1/4 of the NE1/4 and the N1/2 of the NE1/4. 30 acres 80 acres. 120 acres *160 acres The the metes-and-bounds method of description: metes refers to direction, and bounds refer to distance. *metes refers to distance, and bounds refers to direction. metes refers to distance, and bounds refers to measurement. metes refers to metric, and bounds refers to boundaries. The government survey system is especially adapted to describing: lots in platted subdivisions. odd-shaped tracts of land carved out of former land grants. *land in concise symbols and words. parcels with man-made or natural physical features What is the designation of a township located three township tiers south of the base line and five ranges east of the principal meridian? R3S, T5E *T3S, R5E R7E, T2S None of the above. Correction lines or parallels are located on each side of the baseline every mile. 6 miles. *24 miles 36 miles. The tract of land located inside a square formed by intersecting range lines and township lines is called a(n): acre. check. section. *township. The vertical strip of land six miles wide beginning at the principal meridian and extending six miles east along the length of the principal meridian is called: *range 1 east township 1 east tier 1 east section 6 If you have located a township designated as T1N, R1E the township due north of that township is T1N, R2E T1S, R1E *T2N, R1ET2N, R2E Each township contains: 36 sections. 36 square miles. 36 acres *36 sections and 36 square miles. In writing the legal description of a section, which is the standard sequence? Range number, township number, section number *Section number, township number, range number Township number, range number, section number. Section number, range number, township number. The north boundary of Section 36, Township 1 South, Range 1 West is located: 6 miles south of the principal meridian. 35 miles west of the baseline. 25 miles west of the principal meridian *5 miles south of the base line. A legal description that reads, in part, "the north one-half of the Northeast one-quarter of the Northwest one-quarter Section 12, Township 42 South, Range 12 East" describes a tract of: *20 acres 10 acres 5 acres 1 1/2 acres Dean owned the NW 1/4 of a section. He sold the W 1/2 of that NW 1/4. How many acres does Dean still own? 40 acres *80 acres 160 acres 640 acres Plat maps used in the lot and block method of legal description show: the grid system of government squares. *dimensions of streets and improvements. the numerical street address for each lot. distance and direction from the point of beginning. Which group of legal instruments may legally be prepared by a licensed real estate broker? Listing contracts, buyer-brokerage agreements, commercial leases, and deeds Leases, option contracts, promissory notes, and buyer-brokerage agreements *Listing agreements, buyer-brokerage agreements, sale contracts, and option contracts Mortgages, promissory notes, commercial leases, and option contracts Failure to comply with the statute of frauds: carries with it prescribed time frames for enforcement. *questions the enforceability of a contract, would have to do with whether a contract is in writing. may not constitute an illegal act but would always invalidate a sale contract, questions the enforceability of a contract, would have to do with whether a contract is in writing.may not constitute an illegal act but would always invalidate a sale contract, carries with it prescribed time frames for enforcement, questions the enforceability of a contract, would have to do with whether a contract is in writing. Which of the following contracts do not come under the jurisdiction of the statute of frauds? *Listing contracts for less than one year Option contracts Sale contracts Option and sale contracts A valid real estate sale contract is one that: *contains all of the essential elements. has been acknowledged. requires witnessing. transfers title to real property· An adult contracting with a minor is an example of failure of which one of the following essentials of a real estate contract? Legality of the object Offer and acceptance Meeting of the minds *Competent parties Canceling a daughter's property indebtedness in a contract due to love and affection is an example of *good consideration valuable consideration insufficient consideration inadequate consideration A contract that is not in writing is referred to as a(n): formal contract *parol contract unilateral contract executory contract When a contract has been formed but an undertaking remains to be performed by one or both parties, it is an example of a(n): implied contract express contract. *executory contract. unilateral contract. When a counter offer is made: (Choose all that apply) *theoriginal offer is terminated by the counteroffer *the original offeree becomes the offeror. offeror and offeree remain the same even though the terms are modified. *a contract is created wh,n the new offeree accepts the counter offer and communicates the acceptance to the new offeror. An offer is terminated by any one of the following except a(n): counteroffer. acceptance rejection. *extension· A contract may be tenninated for which of the following reasons: Mutual rescission Performance Breach *Any of the above Rebecca gave an exclusive-right-of-sale listing to Broker Sammis of Sammis Realty to find a buyer for her residential lot. While Rebecca was vacationing with her family, Buyer Ken signed an offer to purchase Rebecca's lot at the full price and terms of the listing agreement. Which of the following is true regarding this situation? Because this is an exclusive-right-of-sale listing, Broker Sammis is authorized to accept the offer on Rebecca's behalf. Broker Sammis may accept the offer on Rebecca's behalf, as long as she gets Rebecca's signature on the contract immediately upon Rebecca's return. *The exclusive-right-of-sale listing does not give the authority to accept the offer on Rebecca's behalf. Broker Sammis may accept the offer because it is a full-price offer. When a contract is assignable and is assigned without the consent of the other contracting party, the assignor: is free of the obligation to perform the contract terms and conditions. *is not free of the obligation to perform the contract terms and conditions. has legally transferred and assigned all responsibility for performance. may not legally assign any right to compensation. Which of the following applies to exclusive-right-of-sale listings? The broker is due a commission regardless of who finds the buyer. The listing may be submitted to the MLS by the listing broker. The seller must consent to the terms of the listing agreement. *All of the above An owner refuses a written offer of the listing broker's prospective buyer, who has agreed to the terms of an exclusive-right-of-sale listing contract. The owner later accepts a higher price from another broker's buyer. The owner: is obligated to pay two commissions. is obligated to pay only the second broker. must have given an open listing. *is obligated to pay only the listing broker unless there is a contract of employment (implied or otherwise) with the second broker. Joshua (age 15) entered into a contract with Ken, who is of legal age to contract. Which of the following is true regarding this situation? Joshua is obligated to honor the terms of the contract. Ken may divest himself of his obligations under the contract because the contract is invalid. *Joshua may choose to divest himself of his obligations under the contract. This contract is a void contract. Signatures of both parties (seller and agent) on a single agency exclusive-right-of-sale listing contract create which of the following conditions? (Choose all that apply) *A bilateral contract has been completed. *A fiduciary relationship has been created. The broker acquires disposition control. *The broker may be required to find a purchaser. Normally, a sale contract involving real property contains a provision that in case of breach by the buyer, the earnest money deposit will be regarded as: compensatory damages to the seller. *liquidated damages to the seller. compensatory damages to the broker. liquidated damages to be divided between seller and buyer. The most advantageous type of listing from the broker's point of view is a(n): open listing. exclusivelisting. *exclusive-right-of-sale Listing. net listing. An enforceable option contract: (Choose all that apply) *must be in writing. *is an agreement. *is a unilateral contract. *will include a consideration. To obtain an option on a property as a true optionee, a broker or salesperson must: (choose all that apply) establish with the owner that he or she is functioning as a licensee. *divest himself or herself of the role as licensee or fiduciary. *provide in the contract for substantial consideration. use the option contract as an exclusive-right-of-sale listing contract. Normally, when an option allows the consideration to be returned in full to the optionee in the event the option is not exercised, the option: *is not a binding contract. must have been given to a licensee. need not contain the complete terms of the transaction. is automatically converted into a bilateral contract. In addition to the information required to be in all contracts, a real estate sale contract must contain: (choose all that apply) *the purchase price and consideration. *property identification. *closingdate. *other terms, as appropriate. Kathy and Bob have decided to make a written offer to purchase a quaint little home built in the 1950s. Prior to signing the sale contract, what must occur? (choose all that apply) *Kathy and Bob must be given a copy of the EPA pamphlet concerning lead-based paint hazards in the home. Kathy and Bob must have the home inspected for lead-based paint. *The seller must disclose any known presence of lead-based paint. *The buyer must sign a disclosure form regarding lead-based paint prior to signing the sale contract. It is important that a buyer's wife join her husband in executing a sale contract because: (choose all that apply) This indicates a willingness to convey her ownership rights. *she also becomes bound to purchase the property. *it indicates her agreement to the price and terms. In a fully amortized, level-payment plan mortgage, the portion of the monthly payment that goes to reducing the principal: remains constant throughout the loan term. *gradually increases with each payment throughout the duration of the loan term. gradually decreases with each payment throughout the duration of the loan term. fluctuates based on the prevailing interest rates. A term mortgage differs from a level-payment, fully amortizedmortgage because of the: index chosen. number of points that may be charged. *method of repayment. criteria used to qualify the borrower. In a mortgage transaction in Florida, the legal evidence of thepersonal debt is the: property (collateral). *note mortgage instrument. borrower's credit history. A financing vehicle in which the vendor holds title to the property until the buyer has met the stated obligations is a: balloon mortgage. purchase-money mortgage. *contract for deed. term mortgage. In title theory states, the mortgage clause that provides that the conveyance of title to the lender is defeated when all of the terms ofthe agreement have been fulfilled is the: penalty clause. release clause. *defeasance clause. insurance clause. If a foreclosed property fails to bring sufficient proceeds at the foreclosure sale to pay the debt, the lender: must absorb the loss as a bad investment. may seek recovery of the loss from the Real Estate Recovery Fund. may obtain an interpleader judgment for the amount of deficit. *may obtain a deficiency judgment for the amount of deficit. Which of the following statements is(are) true regarding discountpoints? Discount points are negotiable. Points are charged by a mortgagee to increase the loan's yield. FHA, VA, and conventional loans can include points. *All of the above Which of the following is(are) considered an advantage of homeequity loans? The interest rate is typically lower than the prevailing home mortgage rate. *Home equity loans do not create a lien against the borrower's residence. The interest on most home equity loans is tax deductible. All of the above The current maximum FHA loan available for a single-family dwelling is: *dependent on the location $67,500 $108,000 $203,000. Rebecca and Tony purchased their first home in January. The interest rate was based on the property being owner-occupied. In May of the same year, Rebecca and Tony decided to live on their sailboat and make a two-year trip around the world. Tony and Rebecca rented their home to Tony's best friend, Brad. The lender soon notified the couple in writing of the mortgagee's intent to increase the interest rate on their loan to the investor rate of interest. The lender was proceeding under which of the following clauses? Acceleration clause *Escalator clause Defeasance clause Release clause The maximum amount of a VA loan is: $203,000. $50,750. $46,000. *not a legislated limit for qualified borrowers. Tony wants to buy, small restaurant and is considering financing the restaurant equipment in addition to the real estate. If Tony pledges the personal property in addition to the real estate as collateral for the mortgage, Tony's mortgage is a(n): equipment mortgage. *package mortgage. all-inclusive mortgage. chattelmortgage. 13. A borrower who is in default on his or her mortgage is allowed to prevent the lender from foreclosing on the property by paying the mortgagee the delinguent principal and interest, plus any expenses the mortgagee has incursed in attempting to collect the payments. The right is referred to as: novatation a satisfaction of mortgage. *the equity of redemption. an acceleration clause. A lender declares all the unpaid balance due and payable as a result of a default. The lender is exercising the: *acceleration clause. due-on-sale clause. defeasance clause. scalator clause. The person who borrows meney to help pay for the purchase of real Property is called at various times the: (choose all that apply) lender *mortgagor mortgagee *borrower. The mortgage provision that relieves the mortgage, from any personal liability for the debt so that the mortgagee can look only to the mortgaged property for reimbursement in the event of default is: novatation estoppel certificate *exculpatory clause subordination clause When a vendee buys "subject to the mortgage," the: vendee becomes responsible for the note. original obligation is substituted with a new note by novation. vendor is relieved of the obligation for the promissory note. *vendor remains responsible for the note. Blanket mortgages: are illegal. *typically include a partial release clause. include equipment and other personal property. None of the above Bob and Stella have just made the final mortgage payment on their home. What document should they request the mortgagee to file on their behalf? ANSWER UNKNOWN Lis pendens Novation Satisfaction of mortgage Estoppel certificate A new mortgage accepted by the seller as part of the purchase price is a(n): ANSWER UNKNOWN wraparound mortgage. shared-appreciation mortgage. assumption of the mortgage. purchase-money mortgage. If a mortgagee does not want the mortgage to be paid ahead of schedule, the mortgage will normally contain a(n): *prepayment penalty clause. redemption clause. defeasance clause. acceleration clause. A mortgagor defaulted on a mortgage encumbering an apartment complex. Once the foreclosure proceedings were filed, the lender ~Ra"h~ed to the courts to appoint a(n): *receiver. on-site manager. attorney to handle the case. arbitrator. Which of the following is (are) true regarding the mortgagor's minimum cash investment on an FHA loan? ANSWER UNKNOWN Closing costs paid by the buyer may be applied toward satisfying the cash requirement. Seller-paid closing costs may be included when calculating the cash investment amount. A loan from the seller may be used to satisfy the cash requirement. All of the above An FHA loan is a: *government-insured loan. government-guaranteed loan. private loan that is insured with mortgage insurance. loan in which the mortgagor is protected against financial loss in the event of default. Which of the following apply to FHA 203(b) loans? (choose all that apply) [ANSWER UNKNOWN!] The loan program applies to loans for one- to four-family residences. The maximum insurable loan limit varies from area to area. Borrowers are required to pay a one-time upfront mortgage insurance premium. The program provides fixed-rate loans based on market interest rates. A potential borrower's monthly housing expense is $504, the total monthly gross income is $1,800, and the total monthly obligations are $648. With a conventional loan, what is the monthly housing expense ratio for the borrower? *28 percent 38 percent 50 percent 54 percent The loan-to-value ratio is 80 percent. A buyer wants to acquire a property with a purchase price of $116,000. Calculate the required down payment. $20,000 *$23,200 $32,800 $92,800 The primary purpose of an estoppel certificate is to: prevent foreclosure. relieve the mortgagor of personal liability for the debt. *verify the loan balance. prevent transfer of title to the mortgagee. VA loans allow discount points to be paid by which of the following? The buyer The seller A third party, such as a relative *Any of the above Rebecca and Tony purchased their home for $125,000. They financed the purchase with an 80 percent conventional loan. The mortgagee charged 21/2 points. Calculate the actual cost in dollars of the points. $1,600 $2,000 *$2,500 $3,125 Which of the following functions as a primary lender, supplying funds for new loans? (Choose all that apply) *Commercial banks *Mortgage bankers Mortgage brokers *Savings associations When the Fed incseases the reserve re9uirement: the supply of money increases. *the supply of money decreases. inflation usually immediately follows. mortgage interest rates decline immediately· A commercial bank sold a group of 2,000 mortgages directly to Fannie Mae. This is an example of: primary market activity. *secondary market activity. Loan correspondence. intermediation. Fannie Mae currently buys and sells: FHA mortgages. VA mortgages. conventional mortgages *All of the above Fannie Mae is a corporation: (Choose all that apply) *that is government regulated *whose stock is privately owned. *That was established to create a secondary market. That deals directly with home buyers Which of the following entities originates loans and typically services the loans, but is not a financial intermediary? *Mortgage company Mortgage broker Life insurance company Fannie Mae When the Fed purchases securities, which of the following results? The supply of money in circulation is reduced. Interest rates begin to rise. *Loanable funds are released into circulation. Pressure is applied to increase the discount rate. Which of the following compete for the available supply of funds? Corporate stock Long-term bonds issued by governmental entities Financing the national debt *All of the above The market where mortgage loans are created, supplying funds to finance real estate purchases directly to borrowers, is referred to as the: *primary market. secondary market. capital market. real estate market. The primary purpose of Fannie Mae is to: reduce and stabilize mortgage interest rates. *purchase real estate loans to replenish the supply of mortgage money. make loans to low-income families. All of the above The demand for residential real estate mortgage money is influenced by: household formations. shifts in geographic preference for housing. household income. *Any of these choices. The Office of Thrift Supervision regulates: *savings associations. commercial banks. credit unions. the Rural Housing Service. The discount rate is: one percent of the loan amount. a rate adjustment factor used to increase the lender's yield on a loan. *the interest rate charged member banks for borrowing funds from the Federal Reserve Bank. approximately 1/8 of 1 percent for each point charged. The primary purpose of Freddie Mac is to: *purchase conventional loans from savings associations. regulate savings associations. insure mortgage loans. regulate conventional mortgage loan interest rates. When funds are withdrawn from thrift institutions by depositors for direct investment elsewhere, the process is called: loan correspondence. intermediation· *disintermediation. capital-deficit area support. Which of the following provide a source of income to lenders? Discount points Origination fees Servicing fees *All of the above The rule of thumb used to convert discount points to annual percentage rate is that each discount point increases the yield by approximately: *1/8 Of 1 percent. 1/4 Of 1 percent. 1/2 Of 1 percent. 1 percent. A lender charged 7 percent plus 3 points. What is the approximate yield on this loan? 7 1/4 percent *7 3/8 percent 7 1/2 percent 7 3/4 percent The most commonly used method of controlling the national money supply is for the Fed to: *engage in open-market activities. change the discount rate. change the reserve re9uirement. None of the above A senior salesperson receives 55 percent of all sale commissions earned. His broker has listed a motel for $1,450,000. The listing contract specifies a 6 1/2 percent sale commission for the first $600,000 of selling price, 7 percent for the next $800,000, and 8 percent commission on all of the actual sale price exceeding $1.4 million. What will the salesperson's commission be if he sells the motel for the listed sale price? $44,550 *$54,450 $95,000 $99,000 The interest portion of Mr. Highland's first monthly payment on a 30-year, 12 percent mortgage amounts to $550. If the loan-to-value ratio for Mr. Highland's house is 80 percent, how much did he pay for the house? $44,000 *$68,750 $110,000 $171,875 You bought a house for $120,000. You gave a deposit of $10,000, assumed a recorded mortgage of $90,000, and signed a new second mortgage and note for $20,000. What are the total state taxes due as a result of this transfer of property? $1,445 $1,405 *$1,265 $950 A broker lists a property, a 7 percent commission is agreed to, and the listing is placed in the MLS. The sale commission is to be split as follows: 45 percent to the listing broker and 55 percent to the selling broker. A salesperson who works for a cooperating broker sells the property for $160,000. The salesperson's agreement with her employer calls for a 60 percent share of all commissions she brings to the company. How much is due the salesperson? $2,016 $2,464 $3,024 *$3,696 Ms. Judy owned 3/8 of a property. She was paid $45,000 as her share of the proceeds from the sale of the property. What was the total selling price of the property? *$120,000 $90,000 $72,000 $61,875 To get a mortgage loan of $31,000, a buyer has agreed to pay all state tax costs incurred by creation of the new mortgage. What is the total cost? $62.00 $108.50 *$170.50 $217.00 You have a VA mortgage of $48,000 at 9 percent with a 30-year term. The monthly principal and interest payment is $386.21. What portion of the second month's payment will apply to amortization of the mortgage? $26.21 *$26.41 $359.80 $360.00 In the mortgage cited in question 11, what would the monthly payments amount to if your property taxes were $840 and your annual insurance $176? $400.88 $407.88 $456.21 *$470.88 Barbara bought three 200-foot lots on a lake for $500 per front foot each. Barbara then subdivided these lots into six lakefront lots, which she then sold for $62,500 each. What was her percentage of profit on the sales? 20% 25% 75% 80% A warehouse measures 720 feet by 500 feet and rents for $118,000 a month. What is the rent per square foot per month? $0.25 $0.33 $3.05 $3.96 Mr. Jones incurred a 20 percent loss when he sold a 10-acre parcel (Tract A) for $100,000. He also owns a 25-acre parcel (Tract B) for which he paid $200,000. How much must he sell Tract B for if he wishes not only to recover his loss from Tract A but also to realize a 20 percent profit on his investment in Tract B? $260,000 *$265,000 $270,000 $275,000 Mr. and Mrs. Greer are purchasing the Hogue's apartment building. Each of the five apartments rents for $315 per month. The closing is scheduled for September 16, and the rents were collected on September 1. What is the rent proration for this transaction and to whom will the amount be credited? (Day of closing belongs to the buyer.) $157.50, credit buyer $735.00, credit seller *$787.50, credit buyer $812.90, credit seller A 28.5-acre parcel of land sells for $4,100 per acre. What is the documentary stamp tax on the deed? *$818.30 $817.95 $642.85 $409.15 ================================== 'Real Estate Chapters 15-20 Test Review ================================== The City of Oldsmar wishes to take private property for the construction of a fire station. The city may acquire title in this situation by: *Codemnation adverse possession escheat to the city filing a property tax lien Title to real property legally transfers from grantor to grantee when the: deed is signed. deed is recorded. *deed is voluntarily delivered and accepted. proper amount of tax is paid on the deed. Courts at various levels have ruled that: constructive notice is superior to actual notice. actual notice is superior to constructive notice. neither constructive notice nor actual notice is required. *constructive notice and actual noticehave equal legal priority. A ninety-two year old man is being forced from his home because of a government taking. The home has been in his family for four generations. What recourse, if any, does he have? He can file an injunction to stop the taking. He can pay the delinquent property taxes to prevent the foreclosure. *He may request a condemnation proceeding to protest the amount of compensation being offered by the government body. He may do all of the above. For a deed to be valid, a competent: grantor, grantee, and two witnesses must sign the instrument. *grantor and two witnesses must sign the instrument. grantee and two witnesses must sign the instrument. grantee only must sign the instrument. The type or form of deed most commonly used to clear clouds on the title of real property is the: general warranty deed. special warranty deed. bargain and sale deed. *quitclaim deed. If the sale contract does not specify the type of deed to be delivered, the seller is required to provide a: *general waranty deed. special warranty deed bargain and sale deed. quitclaim deed. The process of taking property under the power of eminent domain is called: escheat. foreclosure. *condemnation. voluntary alienation. The type of deed in which the grantor does not warrant the title in any manner except against his or her acts or the acts of his or her representatives is called a: general warranty deed. *special warranty deed. bargain and sale deed. quitclaim deed. The covenant against encumbrances in a deed is designed to guarantee that the: *grantor has not encumbered the property in any manner except as noted on the deed. grantee is responsible for any unpaid encumbrances. grantee has not encumbered the property. grantor will not encumber the property. The prupose of recording a deed is to: comply with real estate license law. effect the transfer of ownership. give actual notice of ownership. *give constructive notice of ownership. A valid instrument of conveyanceof real property must be: (choose all that apply) *in writing signed by a competent grantee *witnessed notarized. The seisin clause in a deed specifies: the type of estate being conveyed. the improvements being transferred with the land. the rights reserved by the grantor. *that the grantor actually owns the property and has the right to sell it. The deed that contains the covenant in which the grantor guarantees that he or she will forever be responsible for warranting the title and will defend the title and possession is a: *general warranty deed. special warranty deed. public warranty deed. bargain and sale deed. The provision in a deed that names the parties and contains the granting clause is the: *premises. encumbrance clause. habendum clause. seisin clause. An owner placed a condition in the deed that stipulated that a commercial building could not be erected on the property until at least the year 2000. This is an example of: police power *deed restriction involuntary alienation governmental restriction on ownership An example of an encumbrance on title to real property is a(n): easement deed restriction lien *All of the above. When a lis pendens is filed properly witht he county clerk, it becomes a type of: attachment on the subject property. vendor's lien. *constructive notice. easement by prescription. Which of the following liens is first in priority? A property tax lien effective on January 1, 2001 A special assessment lien certified on December 31, 200. *A first mortgage lien filed on July 15, 2001 A construction lien filed on November 30, 2000 The complete successive history of a parcel, from the time it was conveyed from a government to a private owner to today, is referred to as: an abstract of title. title insurance. warranty forever. *a chain of title. Mr. and Mrs. Lee signed a contract to purchase a home in a residential subdivision. When the Lees had the lot surveyed before closing, they discovered that the contractor had built the neighbor's garage three inches inside the west boundary of their lot. The garage in its present location is an example of a(n): deed restriction. easement by prescription. implied easement. *encroachment When a pathway to a property has been used continuously and without interruption for more than 20 years it creates an: implied easement. encroachment. alienation by adverse possession. *easement by prescription. Soon after Michael's death a deed was discovered behind a brick in the basement wall of his home. The deed is for Michael's home and it deeded the property to a charitable organization. Michael is survived by his son Andrew, who discovered the deed. Michael died intestate. Based on this information, the house belongs to the: state, because Michael died intestate. charitable organization because the deed conveyed ownership to it. *legal heir because the deed was never delivered and accepted. legal heir because the deed was not signed by the grantee. The owner's insurance policy is: issued for an amount no greater than the purchase price of the property and is transferable. *issued for an amount no greater than the purchase price of the property and is not transferable. a seperate policy for the amount of the unpaid balance of the mortgage and is transferable. a seperate policy for the amount of the unpaid balance of the mortgage and is not transferrable. Which of the following applies to easements? (choose all that apply) *An easement is a right given to or belonging to another for specific use of an owner's property. *An easement is a nonpossessory interest. *An easement is a type of encumbrance. An easement is unauthorized use of an owner's property. The things to remember when working with private restrictions are: *(DELL) [private restrictions] deed restrictions, easements, leases, and liens. (A BAR SALE) [real estate services] advertise, buy, appraise, rent, sell, auction, lease, and exchange. (MALE) [settlement procedures] mediation, arbitration, litigation, and escrow disbursement order. (IRMA) [fixtures] intent of the parties, relationship between parties, method of annexation, and adaption of the article. (DUPE) [bundle of rights, general property] Disposition, Use (control), Possession, and Exclusion (quiet enjoyment) (PET) [gov't restrictions] Police power, Eminent domain, Taxation. (PITT) [joint tenancy] Posession, Interest, Time, Title. What is a title? *A person who holds vested ownership rights in a property is said to hold a title. a written instrument used to convey an interest in real property. A deed conveys a legal title. An instrument of conveyance whereby title to real property is transferred from one party to another. The conveyance of real property by virtue of a last will and testament is a type of voluntary alienation because the person conveying the property by will (the testator) does intend to convey his or her property to a particular individual. Provides for a government (usually a state government), to take the property of an owner who dies interstate and without any known heirs entitle to receive the property. A "must have" clause in a deed *granting acknowledgment owner quitclaim Type of lien resulting from unpaid improvements to a property *construction mortgage constructive property tax Type of notice from reading or hearing information *actual notice constructive notice acknowledgement real property notice A type of lease where the tenant pays some of the building expenses *Net Lease Percentage Lease Ground Lease Gross Lease Power of property to convey to the state *Escheat Police Power Lien Property Tax Lien A written instrument that conveys title *deed actual notice encumbrance clause easement Type of deed where the grantor makes no warranties *quitclaim deed bargain and sale deed special warranty deed general warranty deed An official summary of documents filed in the public records *abstract of title certificate of title insurance title insurance habendum Acquiring possession because the owner sleeps on his rights *adverse possession escheat to the state eminent domain lis pendens A declaration by the grantor that signing is a free act *acknowledgement actual notice constructive notice habendum Legal process that is used in eminent domain *condemnation Eeed restriction Easement Property tax lien To die without a will is *intestate testate grant eminent domain Person conveying property in a will *testator intestator grantor grantee Sucessive changes of ownership are linked to form this *chain of title deed restrictions a lease involuntary liens Type of notice when the information is recorded and made public seisin *constructive notice granting clause habendum Notice of pending legal action *Lis Pendens Police power Eminent domain Legal Title An attorney prepares this after reviewing the abstract of title *title opinion chain of title constructive notice actual notice The conditions for adverse possession (DUPE) [bundle of rights, general property] Disposition, Use (control), Possession, and Exclusion (quiet enjoyment) (PET) [gov't restrictions] Police power, Eminent domain, Taxation. (PITT) [joint tenancy] Posession, Interest, Time, Title. *(HOTCAN) [conditions for adverse poss.] Hostile possession, open possession, taxes paid, claim of title, adverse possession for 7 yrs, notorious ownership of property. The type of lean resulting from a mortgage involuntary *voluntary Title insurance policy that is transferable *lender's title insurance owner's title insurance A legal right-of-way authorizing access *easement deed lease eminent domain Indicates the date and names the parties in a deed *premises section granting clause habendum seisin Optional title insurance for the full purchase price of the home *Owner's title insurance Lender's title insurance The most comprehensive interest in real property that an individual may possess is a estate for years *fee simple estate remainder estate life estate The physical components of real property are (choose all that apply) *surface *air space *subsurface equitable rights Fixtures are items that are fixed, or attached, to real property were once personal property, but are now real property have been incorporated as part of a real property *all of the above Frank and Lucile decide to get a divorce. In addition to their Florida honesteaded property, they own a vacant lot in the same subdivision acquired in both of their names during the marriage. How will the lot be distributed? The lot is considered to be seperate property and will be distributed equally between Frank and Lucille The real estate is community property and each spouse is entitled to a one-half interest in the lot. The interest in the lot will revert to a life estate and be distributed to the lineal decendants. *The lot is a marital asset and will be distributed equitably. There is no such thing as community property in Florida. *True. False. The bundle of rights associated with real property include the rights of: (choose all that apply) *use *possession *disposition *exclusion Mary and John were recently wed. Mary owns a residential lot that was purchased before the marriage. The lot is considered to be *seperate property community property a tenancy in common an estate by the entireties At the expiration of the lease period and before renegotiation of the lease, a tenant continued to occupy the apartment. The tenant's position is called a(n) tenancy at will *tenancy at sufferage freehold estate estate in reversion Lucy recieved a new microwave for Christmas. The microwave was installed abover her range by screwing the unit to the kitchen cabinets and venting it through the attic. The microwave would be considered: *a fixture a chattel seperate property personal property The homestead tax exemption is deducted from the: market value of a property *assessed value of a property sale price of a property total cost, including all improvements A husband and wife own a home with title in both names. The husband owns two small farms in his name only, acquired before the marriage. They have one minor child and one adult son. The husband dies. Which is most correct? The widow owns a life estate in all property. The property is split equally among the widow and the children. *The widow owns all of the home and may claim 30% of the two farms. The widow owns 30 percent of all of the real estate. The real estate protected by homestead rights is limited to: 640 acres outside a city or town and one acre in town. 160 acres outside a city or town and one-half acre in town 40 acres outside a city or town and one-half acre in town *160 acres outside a city or town or one-half acre in town A constitutional homestead is owned by Ralph, who is a head of a family consisting of himself, wife, and their three children. Ralph dies unexpectedly. After his death: The widow owns the homestead. *The widow owns a life estate in the homestead, and the children are vested remaindermen. The widow may claim elective share rights of 30% of the homestead, and the children devide the remainder. Any of the above. Which of the following estates feature right of survivorship? (choose all that apply) All freehold estates *estates by the entireties *joint tenancies tenancies in common Chapter 475, F.S., defines real property as any interest or estate in: land, improvements, leaseholds, subleaseholds, mineral rights, cemetary lots, or any assignment thereof. land, improvements, business enterprises and business opportunities, leaseholds, subleaseholds, mineral rights, mobile homes, or any assignment thereof. land, business enterprises and business opportunities, leaseholds, subleaseholds, mineral rights, cemetary lots, mobile homes, or any assignment thereof. *land, business enterprises and busines opportunities, including any assignment, leasehold, subleasehold, or mineral rights. In Florida, cooperatives and time-sharing are regulated by the: Division of Real Estate (DRE) *Division of Florida Land Sales, Condominiums, and Mobile Homes. Department of Housing and Urban Development. Florida Real Estate Commission. A condominium unit buyer has how long to cancel the purchase contract following the signing of an agreement with a developer? 3 days 10 days *15 days 20 days Which one of the following is required to be given by sellers of a cooperative, condominium, or time-share project? *Apportionment of expenses for common elements Names and business addresses of real estate salespersons assigned. Names of all current unit owners Names of unit owners, unit numbers, and amounts due from unit owners delinquent in monthly assessment fees. Which of the following characteristics are unique to cooperatives as opposed to condominiums and time-share plans? (choose all that apply) *The corporation holds title to the land and improvements. *A purchaser receieves shares of stock in the corporation. *A proprietary lease entitles the purchaser to occupy a unit. *The seller actually sells his or her stock in the corporation. All of the following apply to a constitutional homestead exemption except: Protection from forced sale for nonpayment of certain debts. deduction of $25,000 from the assessed value of the homesteaded property, if claimed. claimants must hold title to the property and use the home as their principal residence. *it automatically creates a tenancy by the entireties if the person filing for homestead is married. Ms. Lee Dade paid cash for a 60-acre lemon grove in Citrus County. The estate is for an indefinite period of time. Ms. Dade owns what type of estate in the property? (choose all that apply) *Fee simple estate *Freehold estate *Estate in severalty Leasehold When a tenant, after rightfully being in possession of a rented premises, continues possession after his right has ended, this creates a(n): tenancy at will *tenancy at sufferage fee simple estate estate for years Which of the following would not be included in the defintion of real property according to Chapter 475, F.S.? *Lot in a mobile home park interest in a business enterprise mineral rights time share unit A type of estate created when a husband and wife take title in both namesis referred to as a(n): joint tenancy *tenancy by the entireties tenancy in common estate for years An elective share consists of what percent of a decedent's net estate other than homesteaded property? 10 20 25 *30 The federal statute that prohibits a private homeowner from discriminating strictly on the basis of race if selling, renting, or leasing is the: *1866 Civil Rights Act. 1968 Fair Housing Act. 1934 National Housing Act. 1968 Interestate Land Sales Full Disclosure Act. The law that requires that lenders disclose the annual percentage rate (APR) of interest is: Real Estate Settlement Procedures Act (RESPA) Federal Housing Act (FHA) Florida Deceptive and Unfair Trade Practices Act (Little FTC act). *Consumer credit Protection Act (Truth-in-Lending). The federal 1968 Fair Housing Act prohibits discrimination based on: *race, color, religion, sex, national origin, familial status, or handicap status race or age relgion, age, race, familial status, or handicap status. race, color, relgion, age, or national origin. The Truth-in-Lending act: Does not affect real estate financing credit. attempts to regulate maximum interest rates charged customers. *requires disclosure of finance charges as well as annual percentage rates of interest. All of the above. The Real Estate Settlement Procedures Act (RESPA) was enacted to: establish maximum cost for all closing items. ensure that sellers are informed regarding the amount and types of expenses expected at closing. *ensure that buyers are informed regarding the amount and types of expenses expected at closing. establish a minimum cost for all closing items. If requested by the borrower, and to the extent that information is available to the closing agent, the borrower must be provided with which of the following at least one day before closing? *Uniform settlement statement. Borrower's special information booklet. Guaranteed amount of settlement costs. Notice of title-closing-agent selection. As part of the preparation for a closing, a listing broker referred a property owner to an appraiser. The appraiser completed the appraisal and charged the owner $250, which was enetered on the RESPA settlement statement. The appraiser gave the listing broker $50 for the referral, which the broker accepted. According to RESPA: The listing broker must be a licensed appraiser. the appraiser has not violated the law as long as he or she is state certified. *both the broker and the appraiser have violated the law. the arrangement is entirely legal. Which of the following is exempt from RESPA requirements? *The sale of a house where the only financing is assumption of an existing loan. A construction loan that will become a permanent loan only after the building is completed. A loan to purchase a new house in a new subdivision. All of the above. The intent of the Florida Residential Landlord and Tenant Act is to: give the tenant legal advantage in his or her relationship with the landlord. *make the landlord-tenant relationship more equitable. provide landlords the legal assistance needed to create an advantageous relationship. None of the above. When security deposits or advance rents are required by a landlord in Florida, such funds: must always be kept in a seperate account. *may be deposited in the landlord's account if he or she posts a $50,000 surety bond. must always be placed in an interest-bearing account. must bear interest at the rate of 7% The associates in a real estate office have been instructed to send all of their spanish-speaking prospects to a new subdivision "beautifully designed with a Spanish flavor." This is an example of: *steering subordination alienation blockbusting A landlord who rents a duplex to two tenants is obligated to provide: pest examination service garbage pickup service garbage receptacles. *all of the above unless waived in the rental agreement. Which of the following disclosure requirements are required to be given to tenants in multifamily units of 5 or more units? Notice of nonrepresentation. *Notice of where deposit is held within 30 days. 15 day cancellation privilege. All of the above. If a tenant vacates rented premises promptly when a lease or tenancy expires, the landlord must: Inform the tenant within 45 days if the landlord claims part of the security deposit. Return the tenant's security deposit within 30 days or explain any exception. Inform the tenant within 25 days if part of the tenant's deposit will be claimed. *Inform the tenant within 30 days if part of the tenant's deposit will be claimed. A tenant is obligated to Ensure that his or herguests do not disturb the peace. be reasonable in operating air-conditioning equiptment maintain interior plumbing in a clean and sanitary way. *all of the above. If a tenant's rent is current and he or she notifies the landlord of an intended absence, the landlord: *cannot enter the tenant's rented premises without the tenant's consent except in an emergency. Can enter only if accompanied by a second party. Can enter without any restriction None of the above. How long does a landlord have to correct a noncompliance that is brought to his or her attention by written notice from a tenant. *7 days 10 days 2 weeks 30 days A landlord must follow designated procedures in evicting a tenant. The first step in a legal eviction is to: personally deliver a written notice demanding possession. notify the tenant by mail of the landlord's demand for possession. attach a notice to the door of the premises that possession of the premises is demanded. *any of the above. The law requires that lenders furnish borrowers with a good-faith estimate of closing costs is the: Truth-in-Lending act. *Real Estate Settlement Procedures Act (RESPA) Consumer Credit Protection Act. Fair Housing and Lending Act. Which of the following phases may be legally included in an advertisement to sell real estate? (Choose all that apply) "Beautiful neighborhood, no young children please." "Quiet neighborhood, no young children please." "Spanish-speaking community." *"Cute cottage home, perfect for first time buyer." Discrimination under the Fair Housing Act regarding familial status would apply to which of the following individuals? A twenty-three year old college student. *A thirty-nine year old pregnant woman. A sixty-eight year old widow. All of the above. Can an insurance company refuse to provide insurance coverage to applicants within a particular neighborhood because of the socioeconomic characteristics of the neighborhood? Yes, provided the insurance company does not insure any of the homes within the neighborhood. Yes, there is no regulation concerning insurance companies and discriminatory practices. *No, to do so is redlining which is a violation of the Fair Housing Act. No, to do so is steering which is a violation of the Civil Rights Act of 1866. What federal law requires developers to provide prospective purchasers with a Property Report prior to signing a purchase contract? *Interestate Land Sales Full Disclosure Act Fair Housing Act Consumer Credit Protection Act Truth-in-Lending act. Which of the following phrases, if included in an advertisement for credit, would constitute "triggering terms." No down payment required. Financing available. *Pay only $1,102 per month All of the above. Which of the following phrases, if used in advertising real estate, would constitute a violation of the Fair Housing Act? Mother-in-law apartment Quiet Neighborhood Non-smoking tenants only. *No wheelchairs. If a tenant properly notified of the landlord's claim on the security deposit, the tenant is allowed how many days after the receipt of the landlord's notice to file and objection? 10 *15 30 45 Which of the following properties is covered under the Florida Residential Landlord Tenant Act? Commercial lease Extended stay motel *duplex unit medical facility The provision in the Growth Management Act that requires the infrastructure to be in place before new development can begin is referred to as the: comprehensive plan *concurrency provision unit-in-place provision. development of a regional impact. Families with children under age 18 and pregnant women. *familial status Redlining blockbusting handicap status Denying loans or insurance coverage or other restrictive practices by lending institution or insurer that present different terms or conditions for homes in certain neighborhoods. *Redlining Familial status blockbusting handicap status The probable cause panel includes: (choose all that apply) *a total of two members *at least one professional member *one consumer member, if available. *at least one current member. A person is eligible to seek recovery from the Real Estate Recovery Fund if: *She or he has receieved a final judgement against a licensee in any action wherein the cause of action was based on a real estate brokerage transaction, unless specifically precluded. she or he is a licensed broker who acted as the agent in the transaction that is the subject of the claim. her or his claim is based on a real estate transaction in which the broker did not hold a valid, current, and active license at the time of the transaction. any of the above events has occured. The decision as to wether probable cause exists is made by majority vote of the: Commission Commission or the Department, as appropriate. Administrative Law Judges *Probable Cause Panel (or the Department if there is no panel.) Which of the following actions would cause a license to be revoked without prejudice? a licensee accepted an earnest money deposit on a property that he knew was encumbered by an undisclosed lien. The broker obtained his license by means of fraud, misrepresentation, or concealment. *A salesperson receieved her license as a result of an administrative error by the Division of Real Estate. For the referral of real estate business a licensee shared a commission witha person (not party to the transaction) who did not have a real estate license. All of the following offenses are a misdemeanor of the first degree except: publishing false or misleading information. *obtaining a license by fraud or misrepresentation. failing to provide current or materially accurate rental information for a fee. failing to account for advance fees in a lawful manner. Jim, an ambitious, hard-working salesperson, was eager to snag a listing on a beautiful two-story home. The seller told Jim that the mortgage on the home also encumbered the adjoining vacant lot he owned. The seller plans to build a new home for his family on the vacant lot. Jim did not mention to prospects that the mortgage also included the vacant lot because he was confident that there would be enough seller proceeds to satisfy the lien at closing. Which of the following applies to this situation? This is legal as long as the lein is satisfied at closing. Jim must disclose that the lien also encumbers the vacant lot at the time of the offer is reducedto writing. *Jim is guilty of fraudulent and dishonest dealing by trick, scheme, or devise. Jim is guilty of culpable neglegence Susan's prospect inquired about the quality of title on a property. Susan was very knowledgable about this particular listing because she had listed and sold it two years ago to the current owners. At that time a title search was performed and a title policy was issued. Susan may: give an opinion of title based on her knowledge and experience with this particular property. give an opinion based on the title policy issued two years ago. *be subject to suspension of her license if she fails to advise the buyer to consult an attorney or to obtain title insurance. Which one of the following is required to prepare and submit a recommended order of findings and conclusions in a complaint case? Court of law. *Administrative Law Judge Probable cause panel. DBPR Any final order issued by the DBPR Secretary or a legally appointed designee, that results from Circumstances that pose immediate danger to the public's health, safety, or welfare is called a: Petition for review. stay of enforcement. *Summary of emergency suspensaion. License revocation Broker Jack of Farm Acres Realty listed a 15-acre farm. Jack accepted a $5,000 earnest money deposit from the buyer; however, the buyer was unable to secure financing, and requested that the funds be returned acording to the terms of the contract. Jack was unable to reimburse the buyer because he used the money to pay his office rent and other overhead. Jack is guilty of: dishonest dealing by trick, scheme, or devise. *failure to account and deliver. fraud. culpable negligence. The DBPR is authorized to investigate a written complaint filed against a licensee: *if the alleged complaint is legally sufficient. only if the claimant has been harmed by the actions of the licensee. only if the alleged violation was committed in the state of florida. only if all of the above conditions have been met. Neglecting to correct omissions or errors on alicense application returned by the DBPR to the applicant for correction is considered grounds for: suspensaion of an applicant;s rights. *denial of the application. revocation of the application. administrative revocation. If a broker's license is suspended, the licenses of all salespersons working for that broker are automatically: *canceled. denied. suspended. revoked. One of the grounds for the suspensaion or revocation of a licensee's license is the unauthorized use of retention of money or property, otherwise known as: concealment. *conversion culpable neglegence commingling. Less than careful attention to duties, one of the grounds for suspension or revocation of a licensee's license, is otherwise called: concealment. conversion *culpable neglegence commingling. When payment from the Real Estate Recovery Fund is made to satisfy a claim against a licensee because the licensee did not comply with an escrow disbursement order, the Commission's action against the licensee must be: citation. probation. *automatic suspension emergency suspension. Which of the following types of penalties may be imposed for violations of the real estate license law? Civil penalties only Administrative penalties only Civil and administrative penalties only. *Criminal, civil, and administrative penalties. When a licensee is found guilty of a violation of chapter 475, F.s., the Florida Real Estate Commission may impose any of the following disciplinary penalties except: *imprisonment probation an administrative fine denial of a license application. One penalty that the Commission cannot legally levy is to: deny the issuance of a license. *deny the payment of compensation. suspend a license revoke and license. The collective amount to be paid from the Real Estate Recovery FUnd as a result of any one real estate transaction cannot exceed: $20,000 *$25,000 $75,000 There is no limit. Reasonable grounds or justification for prosecuting: *Probable cause Formal Complaint Subpoena Complaint an alleged violation of a law or a rule. *Complaint Probable cause Formal Complaint Subpoena Statement of an alleged violation and the penalty to be imposed *Citation Complaint Formal Complaint Subpoena an outline of charges against the licensee and must be answered within the statutory time limit. Citation Complaint *Formal Complaint Subpoena An administrative law judge’s findings and conclusions and the recommended penalty. Citation Complaint *Recommended order Subpoena