1 Flashcards
Hazel’s brokerage firm has an annual expense budget of $162,000 that
includes her own salary. She wants to make $20,000 profit. If she has seven
sales associates, what must each sales associate generate in company dollars
for Hazel to achieve her goal?
a. $14,000
b. $23,143
c. $26,000
d. $34,200
The answer is $26,000.
Required revenue is $182,000. ($20,000 +
$162,000). Each sales associate must bring in at least $26,000 in gross
revenue ($182,000 ÷ 7)
Licensed personal assistants may
be employed and paid commissions by sales associates.
be employed by sales associates but must be paid commissions by the firm’s broker.
never be classified as independent contractors.
perform real estate services that make only their employing sales associates financially liable, but not the firm’s broker.
The answer is be employed by sales associates but must be paid commissions by the firm’s broker.
In Florida, sales associates must be paid only by their registered broker. A sales associate may not pay another sales associate.
A business appraiser, when valuing assets of a going concern should use
liquidation value.
book value.
historical cost.
market value.
market value.
Going concern value is the value of an operating, profitable business, also known as the market value.
A business appraiser calculates a company’s current ratio by
multiplying assets by net worth.
dividing current assets by current liabilities.
dividing current liabilities by net worth.
subtracting current liabilities from current assets.
dividing current assets by current liabilities.
Current assets are cash or assets that can be turned into cash within one year. Current liabilities are payments that will come due within one year.
Which type of ownership allows property to be inherited?
Tenancy in severalty and tenancy in common
Tenancy at will and joint tenancy
Tenancy by the entireties and tenancy in common
Tenancy by the entireties and joint tenancy
tenancy in severalty and tenancy in common.
An owner in severalty is the same as a sole owner. In Joint tenancies and tenancies by the entireties, the property goes to the person(s) named in the deed.
A buyer agreed to purchase a building site for $17,000. She gave the broker a good-faith deposit of $11,000 in cash and agreed to close the property within 60 days and pay the balance in cash. The sale was contingent on the buyer receiving acceptable soil tests from an engineering firm and determining that the land use allowed a mobile home. The broker
should not have written a contingency contract for land use.
violated Chapter 475, F.S., by accepting a cash deposit greater than $10,000.
must place the deposit in his trust account by the end of the next business day.
must report the transaction to the Internal Revenue Service (IRS) on Form 8300.
must report the transaction to the Internal Revenue Service (IRS) on Form 8300.
Any payments of $10,000 or more must be reported as a way to uncover money laundering.
When a broker receives an earnest money deposit from a buyer, the broker
must deposit the funds into his escrow account by the end of the next business day.
is responsible if the check is dishonored even if he made a timely deposit.
may accept it in the form of a postdated check with the seller’s approval.
may never accept a postdated check because of its illegal status in Florida.
may accept it in the form of a postdated check with the seller’s approval.
This is the only correct answer. A broker is not required to deposit escrow money in one business day (3 days). A broker is not responsible for dishonored checks unless the broker is late making the deposit.
An owner agreed to sell his restaurant property. The buyer gave the broker an earnest money deposit of $4,000. One day before closing, the buyer told the broker she had found another property and would not be closing the transaction. The owner lost more than $12,000 because of the default. What remedy would BEST compensate the owner?
Suit for rescission on breach
Suit for compensatory damages
Suit for liquidated damages
Suit for interpleader
suit for compensatory damages.
The seller lost a good deal of money because of the default and would not want to cancel the contract or get the liquidated damages (the deposit). Compensatory damages is the only way to get the amount of loss back from the buyer.
The Federal Housing Administration (FHA) program that insures condominium mortgage loans is a Section
203(b).
234(c).
235.
245.
234(c).
The 203(b) program is for single-family residences or duplexes; the 235 loan is defunct; the FHA 245 loan is called a growing equity loan.
A veteran can have his previously used entitlement restored to buy another home with a Department of Veterans Administration (VA) loan if he
has had more than three VA loans in the past.
agrees to make at least a 20% down payment on the new home.
has paid off the previous loan and sold the original house.
fought in World War II or in Korea
has paid off the previous loan and sold the original house.
It’s also possible if the veteran buys another veteran’s house, qualifies for the loan, and substitutes his or her entitlement for the other veteran’s
Which is FALSE about adjustable-rate mortgages?
The index changes periodically.
The rate is calculated by adding the margin to the index.
It is unpopular because it has negative amortization of the principal.
The margin remains constant throughout the loan period.
it is unpopular because it has negative amortization of the principal.
Fannie Mae will not purchase loans with negative amortization. Negative amortization occurred in loans years ago when the amount of the payment was frozen, but the interest rate could fluctuate freely.
What type of mortgage encumbers more than one parcel of property?
Blanket
Package
Participation
Purchase money
blanket.
A blanket mortgage covers more than one parcel of property. It is usually originated by a lender for a developer who wants to sell lots from a larger piece of property.
A 57-year-old woman applies for a mortgage loan. The loan officer tells her that because of her age, her income is not likely to continue for as long as the mortgage loan. He suggests that she apply at her credit union instead. Based on this information, the loan officer
has violated the Fair Housing Act.
has violated the Equal Credit Opportunity Act.
is guilty of redlining.
has violated the Truth in Lending Act.
has violated the Equal Credit Opportunity Act.
The Equal Credit Opportunity Act prohibits discrimination based on race, color, religion, sex, national origin, marital status, age, applicant’s receipt of income from public assistance, and an applicant’s exercise, in good faith, of any right under the Consumer Credit Protection Act.
If the closing is on July 6, the prepaid interest on a new institutional mortgage covers a period of how many days and is charged to whom?
6 days; seller
6 days; buyer
26 days; buyer
57 days; buyer
26 days; buyer.
Prepaid interest on a new mortgage covers the balance of the month starting on the closing date. It’s the buyer’s mortgage, so the buyer pays.
The Closing Disclosure
must be used for all real estate transactions in Florida.
need not be used in a federally related transaction.
consists of two pages: buyer’s statement and seller’s statement.
must be used for all real estate transactions covered under the Real Estate Settlement Procedures Act (RESPA) requirements.
must be used for all real estate transactions covered under the Real Estate Settlement Procedures Act (RESPA) requirements.
The Closing Disclosure replaced the HUD-1 Settlement Statement and the Truth-in-Lending Act.
