Which deed would be considered a special-purpose deed?
guardian's deed
Complete the sentence. An agreement between to parties for the purchase of real estate must be:
oral, parol, or informal contract
What is the likely result if the federal government starts selling T-bills?
disintermediation
What term is used to refer to the rate that banks pay to the Federal Reserve?
discount rate
How many days does a buyer of a resale condominium have to cancel the agreement?
3
How many days does the buyer of a new condominium have to cancel the agreement?
15
How many days does the buyer of a new timeshare unit have to cancel the agreement?
10
How many acres are contained in 1/4 of a section?
640/4 = 160
An appraiser using the direct capitalization technique would deduct which of the following from PGI to obtain the EGI?
V&C
Primary lenders originate loans and include all of the following, EXCEPT:
mortgage loan originators
The DBPR will most likely issue a license to all of the following individuals that otherwise quality, EXCEPT:
an individual under investigation for violating FS 475
All of the following are qualifications for a sales associate license, EXCEPT:
must be a Florida resident for at least the preceding 6 months
A sales associate misplaced their license. What he or she do?
pay the appropriate fee, file the appropriate paperwork and request a new copy
A buyer makes an offer, and the deposit is placed into the broker's escrow account. At this point, who does the deposit belong to?
buyer
A broker has an escrow account for his property management firm. How much of the broker's own money can be deposited to open and maintain the account?
$5,000
Printing false information is considered which criminal offense?
second degree misdemeanor
What does the term "subleasing" refer to?
transferring less than all rights to a property
Able, Baker, and Charlie are officers in ABC Reality, Inc. Able and Baker are actively involved in brokerage, while Charlie attends only the quarterly meetings. What are the minimum requirements for Charlie?
registered
Adam, Bob, and Chris form a partnership to buy property. What would the ideal form of ownership be from Chris' family's point of view?
tenancy in common
Which of the following is a characteristic of the real estate market?
heterogeneous
A seller listed a house with a broker. The seller informed the broker that they had a change of heart and will refuse to pay the broker's commission. The broker immediately files suit and places a lien on the seller's house. How has the broker acted?
legally, if the listing contract with the seller allowed him or her to do this
Where is the right of the broker to accept earnest money on behalf of the seller created?
listing agreement
A sales associate sells a listing of another broker. The buyer gives a check made payable to the sales associate. What should the sales associate do?
return the check to the buyer, and ask that it be reissued to the employing broker
A licensee is suspended for 3 years. After the 3 years have passed, their license will be active:
after all penalties and conditions have been fulfilled
A court awarded a judgment to Mr. and Mrs. Brown against broker Smith for $30,000 that included $20,000 of actual damages and $10,000 of punitive damages. The bankruptcy court ordered Smith to pay $7,000. How much will the Real Estate Recovery Fund Pay?
$13,000
Recording a mortgage is which form of notice?
constructive
Which appraisal approach would carry the most weight in the appraiser's final decision when appraising a vacant lot?
market or sales comparison approach
A Florida broker has an Alabama license suspended. How this will affect his Florida license?
it may be suspended or revoked
A sales associate helps her aunt rent an apartment. To show her gratitude, the aunt gives her niece a $250 commission. What should the sales associate do with the $250?
give it to her broker
Concerning the characteristics of real estate, which statement is true?
the markets in Florida and Oregon are unrelated, so prices in one have no effect on prices in the other
Sales associate Betty, who works for broker Sam, went on vacation to Key West for 2 weeks. While she was there, she ran into three couples from New Jersey who were interested in buying waterfront condos. Betty sold condos to all three couples. Being that
Sales associate Betty and broker Tony have both violated FS 475
In the event of a foreclosure of an income producing property, who may collect rents?
receiver
An involuntarily inactive sales associate sends in a renewal along with the required fee and the change of status form. When will their license be considered active?
when the DBPR receives the form and fee
To be eligible to receive VA mortgage benefits, how long must a veteran who was in the military in 1977 have served?
at least 181 days
What should a valid mortgage contain?
legal description
Which of the following business structures incorporates limited as well as unlimited liability?
limited partnership
Sales associate Sally sells a home. When must Sally's broker pay her commission?
within a reasonable time period
What happens if the Real Estate Recovery Fund doesn't have enough funds to pay claims?
installments will be pain from the recovery fund as funds become available and paid in the order the claims were made
A sales associate may receive compensation, referral fees or bonuses from which of the following?
the employing broker
A property is described as follows. The point of beginning is described with cement monument. All of the other points are arrived at by angles and directions until you return to the point of beginning. Which method of legal description has been employed?
metes and bounds method
Which survey method should be used when there are recorded subdivisions?
plat method
What must a broker do in order to open a brokerage firm under a trade name?
file the name with the Division of Real Estate
What type of mortgage allows for several parcels of land to be placed as collateral for a mortgage?
blanket
Which description best describes an earnest money deposit?
cash, securities, personal check or any medium of exchange that can be converted to cash
A sales associate tells a customer that he should sell his home because of immigration of a certain ethnic group. What is the term used to describe this situation?
blockbusting
What is the document entered into by two parties which will place a lien on a property?
mortgage
If a developer bought a large parcel of land and wanted to develop and sell off small parts of it, it would be advisable to have which clause in his mortgage?
release clause
What term refers to a written contract often used in conjunction with a mortgage refinance, in which a lender and property owner agree to a change in lien property?
subordination agreement
Why does the mortgagor need to execute a note or bond when a lender is making a loan?
to insure that the mortgagor is aware of their obligation
When a deed of trust is involved, who signs the note?
trustor
Which statement is correct regarding the FHA loan program?
FHA insures loans, but does not guarantee them
Electronic fingerprints are mandatory for all real estate sales associate and broker applicants. How long will the fingerprints be retained?
12 months from the date received
Which clause in a mortgage benefit the lender?
acceleration
Jack defaulted on his mortgage payments, and the lender instituted foreclosure proceedings. If the foreclosure sale does not bring enough to cover the debt, what is the impact to the lender?
the lender may seek a deficiency judgment
Which term refers to the substitution of a debtor or a creditor for another?
novation
Which of the following applies to the FHA Section 203(b) loan program?
provides mortgage insurance coverage of owner-occupied one to four family homes
Which of the following acts like an insurance company?
Federal Housing Administration
Which type of mortgage is not insured or guaranteed and typically requires a higher down payment and interest rate than other common loan types?
second mortgage
Which clause in a deed states that the seller is in possession of the property and has the legal right to convey the property?
seisin
What happens in title theory states that use deeds of trust?
the trustor gives promissory note to the beneficiary
All of the following types of estates may be mortgaged, EXCEPT:
estate at sufferance
In a lien theory state, what is the ownership status of the mortgagee?
mortgagee holds a lien on the property
What is it called when investors put their money directly into real estate instead of in financial institutions?
disintermediation
Fannie Mae is selling an FHA mortgage with an interest rate of 14% at 92% (8 points). What is the approximate yield for the new lender?
1 point = 1/8% so 8 points x 1/8 = 1%
15%
What does blockbusting refer to?
inducing owners to sell because of a migration of ethnic groups into the neighborhood
What instrument must be recorded in order to convey a title back to the mortgagor in a deed of trust?
reconveyance deed
What is produced by applying the loan constant to the loan amount?
mortgage payment
A seller sold a home to a buyer for $50,000. The buyer made a cash down payment of $25,000. The balance of the purchase price was secured by a pledge of $25,000 in stock certificates. The buyer defaulted on the balance of the sales price, which was pledge
The seller has a vendor's lien and may foreclose
If a real estate licensee is involved in a personal real estate transaction, which of the following would be correct?
the licensee must disclose his or her license status prior to entering into any serious negotiations
A broker has a friend in Michigan who refers prospects from time to time. The broker reimburses the friend for any expenses but does not pay the friend a commission or referral fee. Which statement applies?
this is an unlawful practice
Three brokers are partners in a real estate brokerage partnership. One of the brokers dies. What happens to the partnership?
Nothing, since there is still at least one active broker to run the business
A sales associate leaves a broker's office and takes an original copy of a document from the broker's records. What is this action considered to be?
larceny
A broker has an office at 250 North Orange Ave., Orlando, in the Citrus Bank Building. The bank must make extensive repairs, and the broker moves to 244 Orange Blossom Trail, Orlando. What should the broker do?
make application on the proper form, attach no fee, make a copy of the current license and forward them to the Department for a reissue
A prospect steps into a broker's office and tells the broker that he or she wants to buy property in an area called Everglades Estates. The broker informs the prospect that he does not have the property listed, but that he will take the prospect over to m
under the circumstances, do nothing
Regarding limited partnerships as a real estate brokers, there must be one or more general and one or more limited partners in order to qualify as a licensed real estate brokerage. What does the real estate license law also require in Rule 61J2-4.007?
that each general partner be registered, at least one of whom is an active broker
A sales associate receives negotiable securities from the purchaser as earnest money. What should the broker do with these securities?
convert the securities into cash at the earliest practical time, and then deposit the proceeds immediately into the escrow account
A corporation for profit was formed for brokering real estate. "A" held a broker's license and was made president. "B" and "C" financed 40% of the corporation and each were made directors who were to assume normal office duties and functions. "D" and "E
The president must register as an active broker and the directors must register as non-licensed registered persons
A customer requested that a broker locate a rental for $500 per month. The broker requested $200 in an upfront fee from the customer to pay for time and effort while locating this type of property. The broker was able only to find a unit renting for $600
refund the $200 to the customer
A sales associate procures a sale. The sale associate's broker dies before receiving the commission for the sale. What may the sales associate do?
sue the broker's estate
Six people organize a business to buy and sell real property. The title is to be held in trust by a board of trustees or someone in a position of trust. They have been required to file a declaration of trust with the Secretary of State. What type of busin
syndicate
A broker has a main office and eight branch offices. One of the sales associates, Maria, works out of several of the offices but spends most of her time working out of branch office number five. Which office must Maria be licensed out of?
any office at the broker's discretion
Broker Sam sells a list of rental properties to a prospective tenant Michelle, on March 1. Michelle looks at several properties on the list and then changes her mind about living in that city and decides to move back up north. On March 31, Michelle reques
75%
Broker Bennett is trying to decide whether to operate as a sole proprietorship or charter as a corporation. Which of the following is an advantage of sole proprietorship?
there would be less effort to legally create and maintain the ownership form
When can a sales contract that is witnessed, executed, and acknowledged be recorded in the public records of the county in which the property is located?
when the seller requests it
In a civil action, who must be named as defendant if money from the Real Estate Recovery Fund is sought?
any individual broker or sales associate
What is the annual amount charged to a sales associate, in addition to a renewal fee, if the amount in the recovery fund drops below $500,000?
$1.50
Broker Warmington assigns sales associate Smith to work exclusively on Bennett's development. Which statement applies?
Provided Warmington is the listing broker at Bennett's development, and all commissions paid to Smith come from Warmington, there is no problem
The Florida Real Estate Commission can intervene in licensure proceedings on behalf of which entity?
the applicant or DBPR
Broker Jones was convicted of embezzlement of funds from an employer and was sentenced to 5 years in the state penitentiary. Since broker Jones returned all of the embezzled funds, the sentence was withdrawn. Which is correct?
Broker Jones's license may be suspended since the DBPR is really not concerned with whether or not his sentence was withdrawn
In order to collect from the Real Estate Recovery Fund, the claim must be filed within how long after the act was or should have been discovered?
2 years
Four apartment houses recently sold with the following statistics:
Sale Price Annual Gross Income
$1,200,000 $171,400
$1,520,400 $202,720
$1,244,000 $191,380
$1,748,800 $218,600
The subject property has a gross income of $169,000. What is the subject prop
Divide Sale Price by Annual Gross Income of each
then find the average
7 + 7.5 + 6.5 +8 = 29/4 = 7.25
169,000 x 7.25= $1,225,250
A four unit apartment building is valued at $150,000, with $30,000 in expenses and no vacancies. The owner requires a 20% return. What is the monthly rent per unit?
150,000 x .20 = 30,000(NOI)
PGI - OE = NOI
? - 30,000 = 30,000
60,000 PGI/12 months/4 units =
$1,250
An apartment building has expenses of $700,000, effective gross income of $1,000,000 and a cap rate of 8%. What is the value?
1,000,000 (EGI) - 700,000 (OE) = 300,000
300,000 (NOI)/.08 = 3,750,000
A property has a potential income of $100,000, with vacancies and expenses of $51,000 and debt service of $30,000. Based on a 14% rate, what is the value of the property?
100,000 - 51,000 = 49,000 NOI
49,000/.14 = 350,000
Mrs. Smith purchases two adjacent 60 foot by 120 foot lots at a cost of $2 per square foot. She divides these lots into three lots and sells them at $300 per front foot. What will her percentage of profit be upon sale of the lots?
60 x 120 = 7,200 x 2 lots = $28,800 (bought)
front foot: 60 x 2 = 120/3 = 40 front foot per lot
40 x $300 = 1200 x 3 = 36,000 (sold)
28,800 - 36,000 = 7,200 profit
7,200/28,800 = .25
25%
An investor put $50,000 down on a $200,000 property. The NOI is $30,000 and the mortgage payments are $22,000 per year. What is the capitalization rate?
30,000 (NOI) / 200,000 = .15
15%
Three bedroom, two bath homes in an area rent for $450 per month. In the same area, three bedroom, one bath homes rent for $400 per month. If the GRM is 120, what is the estimated value of a bathroom?
450 x 120 = 54,000
400 x 120 = 48,000
54,000 - 48,000 = 6,000
A retail store is leased for $1,000 per month per month plus 2% of gross sales. If the rent for last month was $1,600, how much were the gross sales for the month?
1,600 - 1,000 = 600
600 / .02 = 30,000
Taxes are $30,000 a year, and gross income is $237,000 a year, with other expenses and reserves of $20,000. If taxes go up 25% and all else remains the same, by what percentage will the net operating income be reduced?
EGI 237,000 - 50,000 = 187,000
25% increase is 187,000 - 7,500 = 179,500
187,000/7,500 = .04
A square piece of property measures 938 feet around the perimeter. What are the dimensions of the property?
938/4 = 234.5 feet by 234.5 feet