Chapter 1: The Real Estate Business (FITB)

Question 1

A contractor who builds on his or her own lot in the hope of finding a purchaser upon completing is building on ____.

Answer 1

speculation

Question 2

A broker who is working for an employer is said to be an ____.

Answer 2

agent

Question 3

When working with a member of the public, the party the broker hopes to be successful with in the performance of his or her duties is referred to as a ____ or ____.

Answer 3

customer or principal

Question 4

Most real estate licensees are involved in ___ brokerage.

Answer 4

residential

Question 5

Property management has grown as a service of real estate primarily because of an increase in ____ ____

Answer 5

absentee ownership

Question 6

The portion of the Federal Financial Institutions Reform, Recovery and Enforcement Act that requires the use of state-licensed or state-certified appraisers is ____.

Answer 6

Title XI

Question 7

An estimate of the value of property developed by a real estate licensee for use in listing or selling property is known as ____ ____ ____.

Answer 7

comparative market analysis (CMA)

Question 8

Mortgage brokers in Florida are licensed by the ____ ____ ____ ____.

Answer 8

Department of Financial Services

Question 9

The category of construction that applies when a property owner employes a contractor to build on his or her lot is called ____ ____.

Answer 9

custom building

Question 10

After completion of construction of a subdivision, the streets, sidewalks and common areas are frequently conveyed to the city or county in a process called ____.

Answer 10

dedication

Question 11

An appraisal is an ____ of value.

Answer 11

estimate

Question 12

Valuing a business requires an analysis of ____ ____ and ____ ____.

Answer 12

balance sheets and financial statements

Question 13

The three areas of expertise real estate licensees bring to the transaction relate to ____, ____ and ____ ____.

Answer 13

valuation, marketing and property transfer

Question 14

The composite value of the real and personal property, plus the intangible assets of a business, is called ____ ____ ____.

Answer 14

going concern value

Question 15

Part ____ of FS 475 coveres regulation and licensing of real estate practitioners, while Part ____ covers the registration, licensing and certification of appraisers in Florida.

Answer 15

Part 1, Part 2

Question 16

A mortgage broker

a. is the same as a mortgage banker.
b. must have a separate license.
c. originates loans.
d. must have a real estate license.

Answer 16

b. must have a separate license.

Question 17

A real estate appraiser’s fee for professional service is based on

a. a percentage of the property’s gross income.
b. a percentage of the fair market value of the property.
c. the time and difficulty of the appraisal.
d. a percentage of the property’s sales price.

Answer 17

c. the time and difficulty of the appraisal.

Question 18

The real estate brokerage business can be best described as a

a. service business.
b. simple business.
c. business with few opportunities available.
d. construction business.

Answer 18

a. service business.

Question 19

The principal in an agency relation is the

a. customer.
b. seller.
c. employer.
d. buyer.

Answer 19

c. employer.

Question 20

The responsibilities of a property manager does NOT include

a. renting property for an absentee owner.
b. collecting rent.
c. overseeing maintenance.
d. preparing leases.

Answer 20

d. preparing leases.

Question 21

Concentrating on one neighborhood or style of property is

a. a waste of time
b. a practice called farming
c. required by most brokers
d. illegal

Answer 21

b. a practice called farming

Question 22

Which insurance policies can a real estate licensee offer to the public without additional state licensing?

a. flood insurance
b. fire insurance
c. renter’s insurance
d. none

Answer 22

d. none

Question 23

The purpose of the National Association of Realtors is to

a. preserve the right of individuals to own real property through an exchange of information
b. organize antigovernment activities
c. promote unethical practice of real estate professionals
d. award unearned educational designations

Answer 23

a. preserve the right of individuals to own real property through an exchange of information

Question 24

What does the designation REALTOR signify?

a. Anyone in possession of a real estate license is a REALTOR.
b. The designation identifies the real estate professional as a member of NAR.
c. The designation is evidence that the licensee has an extensive background in the real estate profession.
d. The designation is evidence that the licensee has completed extensive real estate studies.

Answer 24

b. The designation identifies the real estate professional as a member of NAR.

Question 25

A developer contacts to build a home on a buyer’s lot to the buyer’s specifications. This is an example of which type of building?

a. tract
b. custom
c. speculative
d. subdivision

Answer 25

b. custom

Question 26

In their relationships with customers, brokers

a. work for them.
b. work with them.
c. represent them.
d. are always their agent.

Answer 26

b. work with them.

Question 27

Licensees involved in business brokerage

a. must be able to analyze financial statements and understand balance sheets.
b. are not required to know much about the business they are selling.
c. must have a separate license.
d. never become involved in the tax aspects of the business.

Answer 27

a. must be able to analyze financial statements and understand balance sheets.

Question 28

Real estate brokers are NOT required to be knowledgeable regarding

a. marketing
b. valuation
c. property transfer
d. accounting

Answer 28

d. accounting

Question 29

The service provided by real estate brokers that is considered to require the most experience and knowledge is

a. property management
b. counseling
c. appraising
d. agricultural sales

Answer 29

b. counseling

Question 30

Appraisers that are registered, licensed or certified under F.S. 475, Part II, must be utilized in

a. all appraisals
b. the appraisal of residential property
c. the appraisal of nonresidential property
d. federally related transactions

Answer 30

d. federally related transactions