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Real Estate Test > Practice Exam 2 > Flashcards

Practice Exam 2 Flashcards

0
Q
  1. The right of mortgagor to stop a foreclosure process by paying the entire balance, interest and so in is know as the

A. equity of estoppel
B. right of redemption
C. right of defeasance
D. equity of disposition

A

B. right of redemption

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1
Q
  1. The remedies available when a seller breaches a contract include

A. a suit for specific performance
B. buyer gets deposit returned
C. A or B but not both
D. notifying FREC

A

C. A or B but not both

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2
Q
  1. Seller financing is known as a

A. package mortgage
B. term mortgage
C. second mortgage
D. purchase money mortgage

A

B. term mortgage

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3
Q
  1. The interest rate, payment and other terms of a loan would be found in the

A. note
B. lease
C. satisfaction
D. mortgage

A

A. note

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4
Q
  1. In a lien theory state such as Florida

A. the borrower will obtain title only after the loan is paid

B. foreclosure will take place much quicker than in title theory states

C. the borrower conveys title to the lender using a deed of trust

D. the mortgage serves as a lien against the property

A

D. the mortgage serves as a lien against the property

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5
Q
  1. In an amortized or level payment mortgage

A. the early payment are mostly interest
B. the early payments are mostly principal
C. each monthly payment increases and the balance decreases
D. with each monthly payment, the interest increases and the balance decreases

A

A. the early payment are mostly interest

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6
Q
  1. The process of sand deposits building up over time, causing an increase in land, is called

A. reliction
B. accretion
C. erosion
D. alluvion

A

B. accretion

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7
Q
  1. The most comprehensive estate or tenancy is a(an)

A. fee simple
B. life estate
C. estate for years
D. free sample estate

A

A. fee simple

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8
Q
  1. The government’s right to regulate, including zoning codes and building codes, is called

A. police power
B. eminent domain
C. escheat
D. taxation

A

A. police power

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9
Q
  1. The process the government uses to take private land for public use is

A. escheat
B. encroachment
C. condemnation
D. acknowledgement

A

C. condemnation

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10
Q
  1. When banks borrow from the Federal Reserve, the interest they are charges is called

A. prime rate
B. discount points
C. usury rate
D. discount rate

A

D. discount rate

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11
Q
  1. If a lender charges 8% interest plus 2 points, the approximate yield on the loan would be

A. 9.00%
B. 8.50%
C. 8.25%
D. 8.13%

A

C. 8.25%

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12
Q
  1. The primary purpose of the Federal Home Loan Bank System is to provide support for

A. saving associations
B. federal commercial banks
C. mortgage brokers
D. insurance companies

A

A. saving associations

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13
Q
  1. The note documentary stamp tax is

A. paid by the seller
B. $.70 per $100
C. .002 of the loan amount
D. $.35 per $100

A

D. $.35 per $100

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14
Q
  1. When the Federal Reserve wishes to increase the supply of loanable funds, they would

A. sell government securities
B. increase the reserve requirement
C. increase the discount rate
D. decrease the reserve requirements

A

D. decrease the reserve requirements

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15
Q
  1. Intermediation in financial institutions is likely to occur when

A. demand and supply of funds are both decreasing

B. demand and supply of funds are both increasing

C. supply of funds is decreasing, and the demand is increasing

D. supply of funds is increasing, and the demand is decreasing

A

D. supply of funds is increasing, and the demand is decreasing

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16
Q
  1. The escrow deposit would appear as a

A. credit to seller
B. debit to seller
C. credit to buyer
D. debit to buyer

A

C. credit to buyer

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17
Q
  1. When there is a foreclosure, and the auction sale does not provide enough proceeds to pay the entire mortgage debt, the lender may request the court to grant a(an)

A. estoppel judgment
B. novation judgment
C. satisfaction judgment
D. deficiency judgment

A

D. deficiency judgment

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18
Q
  1. What results in a decrease of land mass?

A. accretion
B. littoral
C. riparian
D. erosion

A

D. erosion

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19
Q
  1. What is the best description of the township located due east of T4N, R3W?

A. T4N, R4W
B. T4N, R2W
C. T3N, R2W
D. T5N, R4W

A

B. T4N, R2W

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20
Q
  1. Highest and best use of a parcel of land is the use creating the

A. greatest density
B. greatest value for the land
C. greatest intensity
D. greatest tax base

A

B. greatest value for the land

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21
Q
  1. The subject property had a garage. The comparable property has no garage. If a garage has a value of $14,500, and the comparable property sold for $149,900, there should be a

A. plus $14,500 adjustment to the subject property
B. minus $14,500 adjustment to the subject property
C. plus $14,500 adjustment to the comparable property
D. minus $14,500 adjustment to the comparable property

A

C. plus $14,500 adjustment to the comparable property

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22
Q
  1. The basic types of depreciation, do NOT include

A. physical deterioration
B. functional obsolescence
C. external obsolescence
D. component depreciation

A

D. component depreciation

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23
Q
  1. The present value of a future cash flow is the basis for which appraisal technique?

A. cost depreciation
B. income capitalization
C. market data
D. comparable sales

A

B. income capitalization

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24
Q
  1. How would a purchase money mortgage appear on a closing statement?

A. Credit the buyer and debit the seller
B. Credit the seller and debit the buyer
C. Debit the seller and debit the buyer
D. Credit the seller and credit the buyer

A

A. Credit the buyer and debit the seller

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25
Q
  1. Residential real estate purchased after 1986 can be depreciated using

A. 27.5 years straight-line
B. 39 years straight-line
C. 27.5 years double declining
D. 39 years double declining

A

A. 27.5 years straight-line

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26
Q
  1. The annual income that an investment property could make with no vacancies or collection losses is

A. annuity gross income
B. effective gross income
C. net operating income
D. potential gross income

A

D. potential gross income

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27
Q
  1. The frame construction preferred for masonry exteriors on multistory structures, even though it is more expensive, is called

A. stud frame construction
B. post and beam construction
C. platform construction
D. ballon construction

A

D. ballon construction

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28
Q
  1. A person representing themselves as a “business broker” would be required to have

A. a business sales associate’s license

B. a business broker’s license

C. an appraiser’s license

D. a real estate license

A

D. a real estate license

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29
Q
  1. The tangible and intangible resources of a business are called its

A. liabilities
B. net worth
C. owner’s equity
D. assets

A

D. assets

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30
Q
  1. The most difficult asset to set a dollar value on for a business is

A. a leasehold estate
B. existing equipment
C. corporate stock
D. goodwill

A

D. goodwill

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31
Q
  1. John has the opportunity to invest in a property with a 9% return. If he can borrow the money at an interest rate of 7%, this would be an example of

A. liquidity
B. negative leverage
C. neutral leverage
D. positive leverage

A

D. positive leverage

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32
Q
  1. Ad valorem taxes would include

A. special assessment tax
B. real estate property tax
C. income tax
D. quasi-tax

A

B. real estate property tax

33
Q
  1. Property taxes in Florida become delinquent

A. April 15 of the following year
B. January 1 of the tax year
C. April 1 of the tax year
D. April 1 of the following year

A

D. April 1 of the following year

34
Q
  1. Who can assess property for tax purposes?

A. county property appraiser
B. county commission
C. school board
D. special taxing district

A

A. county property appraiser

35
Q
  1. The law that would require farm land near an urban area to be valued the same as more distant farm land for tax purposes is the

A. Statute of Limitations
B. estoppel law
C. green belt law
D. zoning laws

A

C. green belt law

36
Q
  1. The Johnsons have lived in their home for the last 4 years. Now they are selling and expect a profit of nearly $200,000. Which applies?

A. $125,000 of the gain can be excluded from being taxable

B. The gain can be moved to another house of equal or greater value to delay the tax

C. The gain is exempt from tax

D. They must pay tax on 40% of the gain

A

C. The gain is exempt from tax

37
Q
  1. Failure to pay property taxes will lead to the sale of tax certificates. In order to force the sale of the property, how many years must the investor wait?

A. 2
B. 3
C. 5
D. 7

A

A. 2

38
Q
  1. A city has the right to make zoning laws because of

A. police power
B. eminent domain
C. escheat
D. riparian doctrine

A

A. police power

39
Q
  1. A convenience store existed at a location prior to zoning laws being changed to disallow it. The store would be allowed to stay as a

A. hardship exception
B. special use exception
C. variance
D. nonconforming use

A

D. nonconforming use

40
Q
  1. Zoning laws

A. are enacted to assure safe building methods

B. require that plat maps be approved by the planning board

C. divide a community into districts based on use

D. set standards for style and compatibility

A

C. divide a community into districts based on use

41
Q
  1. The membership of the value adjustment board includes

A. three school board members and two county commissioners

B. two county commissioners, one school board member and two private citizens

C. three county commissioners and the tax assessor

D. four county commissioners and three school board members

A

B. two county commissioners, one school board member and two private citizens

42
Q
  1. Local planning boards do NOT have final authority in

A. subdivision plat approval
B. site plan approval
C. sign control
D. zoning variances

A

D. zoning variances

43
Q
  1. In order to qualify for the homestead tax exemption, a person must

A. file for the exemption each year
B. file for the exemption only once
C. live in the house all year
D. live in the house at least 6 months of the year

A

A. file for the exemption each year

44
Q
  1. If an owner felt that a zoning rule was a causing an economic hardship, not of his or her own making, he or she may seek relief by requesting a(an)

A. variance
B. site plan exemption
C. special use exemption
D. nonconforming use exemption

A

A. variance

45
Q
  1. The characteristics of real estate do NOT include which of the following?

A. The market is local in nature
B. The market is slow to respond to changes in supply and demand
C. There is no control over the market
D. The market is homogenous

A

D. The market is homogenous

46
Q
  1. The purpose of building codes is to

A. set standards for the amount of land a building can cover

B. specify the style of building that may be built

C. regulate government properties

D. establish minimum standards of design, construction, use and occupancy

A

D. establish minimum standards of design, construction, use and occupancy

47
Q
  1. The two most important summarizing statements of a business are the

A. working capital and depreciation reports

B. balance sheet and income statement

C. cash flow and asset reports

D. tax returns and asset report

A

B. balance sheet and income statement

48
Q
  1. In which market would there be a shortage of housing?

A. buyers’ market
B. housing market
C. sellers’ market
D. deficit market

A

C. sellers’ market

49
Q
  1. The financial statement showing the status of a business as of a specific date is the

A. income statement
B. balance sheet
C. profit and loss statement
D. IRS Form 1040

A

D. IRS Form 1040

50
Q
  1. A lawn service company sold for $125,000. The tangible assets amounted to the lawn equipment valued at $48,000. The intangible assets were the customer base and the company’s good reputation. What is the value of the intangible assets?

A. $173,000
B. $77,000
C. $48,000
D. $38,500

A

B. $77,000

51
Q
  1. A property manager of an office building leases 2,500 square feet of space to a doctor’s office. If it is 12.5% of the total, what is the total square footage of the building

A. 20,000
B. 40,000
C. 100,000
D. 200,000

A

A. 20,000

52
Q
  1. A homesteaded property has an assessed value of $249,000. If the county tax rate is 7 mills, the city is 8 mills and the school board is 9 mills, how much does the homestead exemption save the homeowner?

A. $25,000
B. $6,000
C. $5,376
D. $975

A

D. $975

53
Q
  1. James, a potential buyer, is told by the lender that he can have a loan at an interest rate of 6%. When he goes to the closing, he notices that the Truth-in-Lending statement says the APR is 6.5%. How many discount points was he charged?

A. 3
B. 4
C. 5
D. 6

A

B. 4

54
Q
  1. Carol is borrowing money to purchase her first home. The lender has agreed to a 5% loan with 2 discount points. What is the approximate yield on the loan?

A. 3.00%
B. 4.75%
C. 5.25%
D. 7.00%

A

C. 5.25%

55
Q
  1. A real estate closing for a duplex is scheduled to take place on September 7, with the day of closing being charged to the buyer. Rent for the month is $1,300 per unit. Which of the following would be a correct entry on the closing statement?

A. Debit the buyer $520.00
B. Credit the buyer $520.00
C. Debit the buyer $2,080.00
D. Credit the buyer $2,080.00

A

D. Credit the buyer $2,080.00

56
Q
  1. Who may be compensated, directly by an owner, for performing any of the eight services of real estate?

A. broker
B. sales associate, if employed by the owner
C. principal
D. both A and B

A

D. both A and B

57
Q
  1. A, B, C bought 640 acres of land with equal and undivided interest. A and B were brokers, and C was not. A and B were frequent business partners but decided to let C handle the resale of the tract. C had very little experience but was able to find a buyer willing to pay a good price. Because of this, A and B decided to give C 40% of the profits and divide equally the balance of the profit. Which applies?

A. C can do this if C is an attorney

B. C can do this because A and B are brokers

C. Chapter 475, F.S., has been violated

D. Since C is selling C’s own land, C does not have to be registered

A

C. Chapter 475, F.S., has been violated

58
Q
  1. Once notified that you have passed the state exam, you may

A. work for a broker
B. work for an owner
C. work for a government agency
D. A, B or C

A

D. A, B or C

59
Q
  1. Owner A and friend B meet on the street. A says, “I would like to sell my house.” B takes the information and says “I’ll find you a buyer, I’ve done it several times for our friends.” B does find a buyer for A’s house, and the transaction is closed. Based on the above facts, which of the following applies?

A. A has violated Chapter 475, F.S
B. B has violated Chapter 475, F.S
C. both A and B have violated Chapter 475, F.S
D. neither have violated Chapter 475, F.S

A

D. neither have violated Chapter 475, F.S

60
Q
  1. To obtain a Florida real estate license an applicant does NOT need to

A. pass two exams
B. have a high school diploma or equivalent
C. complete a prelicensing course
D. be a Florida resident

A

D. be a Florida resident

61
Q
  1. Mary works for AAA Syndicate, which buys, sells, manages and leases its own property. Mary was hired to lease and sell AAA’s property and is compensated by a salary.

A. Mary needs a license

B. This activity is okay if Mary is paid 50% on sales and 50% on leasing

C. There is no violation of Chapter 475., F.S

D. This activity is okay if no more than 50% of Mary’s salary is fixed

A

C. There is no violation of Chapter 475., F.S

62
Q
  1. Public record includes

A. school test questions
B. a licensee’s test results
C. a sales associate’s application
D. state exam answers

A

C. a sales associate’s application

63
Q
  1. An owner of a service station who holds an inactive sales associate’s license has been appointed by the court to appraise another service station. Which is most correct?

A. Since he or she has registration status, that person may be compensated for this service of real estate

B. He or she must have an active license to be compensated

C. He or she may be compensated by a licensed broker

D. He or she may be compensated directly for this service

A

D. He or she may be compensated directly for this service

64
Q
  1. In order for a sales associate to qualify for a broker’s license, they must

A. Hold an active sales associate license for 24 months within the preceding 5 years and complete the brokers pre-licensing course

B. work for one broker for 1 year as an active sales associate

C. have a total of 1 year as active with a broker or owner within the last 5 years

D. prove that they have been actively engaged in the selling of real estate within the last 5 years

A

A. Hold an active sales associate license for 24 months within the preceding 5 years and complete the brokers pre-licensing course

65
Q
  1. An applicant’s request for licensure will be “denied without prejudice” if the applicant has

A. cheated on the state exam
B. been convicted of fraud
C. been disbarred from the legal profession
D. omitted answering one or more questions on the application

A

D. omitted answering one or more questions on the application

66
Q
  1. Jasper Judd is a salaried resident manager of the Golden Age Condominium complex. Adolph Ajax an owner of one of the units in the condominium, has asked Jasper to lease his unit while he is away on an extended trip to Bulgaria. Jasper may

A. lease out the unit for any period of time, as long as he is not compensated

B. lease out the unit for Adolph for not more than 1 year, as long as he is not compensated

C. not lease out the unit since this would violate F.S 475

D. lease out the unit but may not be compensated more than $100

A

B. lease out the unit for Adolph for not more than 1 year, as long as he is not compensated

67
Q
  1. George Portfolio is a stock broker. He believes the stock of the Gasaway Corporation has high potential. Upon contracting the president of Gasaway to assist the corporation in listing its stock for sale, he learns that the success of the company hinges on the negotiation of an oil lease. George offers his assistance, and the company engages him to negotiate the lease with Slick Slacker, the owner. Upon closing the lease, the company employs George as its stockbroker. George subsequently sells the corporation’s stock. The corporation pays George a commission on the stock sale and gives him 5 shares for handling the oil lease. George

A. is exempt as a salaried employee
B. acted properly functioning as a stockbroker
C. has violated Chapter 475, F.S
D. has not violated Chapter 475, F.S

A

C. has violated Chapter 475, F.S

68
Q
  1. Mr. White referred his sister to a real estate broker, and she purchased a $200,000 home. To show his thanks, the broker may

A. take Mr. White to dinner
B. give Mr.White a bottle of wine
C. send a thank you note to Mr.White
D. pay a referral fee

A

C. send a thank you note to Mr.White

69
Q
  1. A license is best if

A. valid
B. valid and current
C. current
D. valid and not current

A

B. valid and current

70
Q
  1. A resident of Canada that has been denied a license in the Province of Ontario subsequently moves to Florida and applies for real estate sales associate’s license. Which would most likely apply?

A. The applicant will automatically be denied a license in Florida

B. The person will be granted a hearing, and the application will be pending based on the results of the hearing

C. The Canadian denial will have no bearing in Florida

D. The previous problem does not need to be noted on the application as it took place outside the country

A

B. The person will be granted a hearing, and the application will be pending based on the results of the hearing

71
Q
  1. Which of the following best describes the purpose of the FREC handbook?

A. It teaches salesmanship

B. It aids licensees in understanding the basic practice of law

C. It puts forth the fundamental principles of law that every licensee must adhere to

D. both A and B

A

C. It puts forth the fundamental principles of law that every licensee must adhere to

72
Q
  1. XYZ Development Corp. was developing a PUD (planned unit development) in Carol City. Sales associate Green, employed by XYZ Corp., was employed to sell vacant homesites. XYZ Corp., in another city 200 miles away, developing another PUD. If sales associate Green is transferred to the Sunshine Corp., which of the following would be correct?

A. He could apply for a multiple license and notify the FREC

B. He could apply for a group license and notify the FREC

C. This would be a violation of F.S. 475

D. As long as he notified XYZ Corp., this is legal

A

B. He could apply for a group license and notify the FREC

73
Q
  1. Robert, a sales associate, has been working with an investor that is looking for single- family properties for income. In order to get preferential treatment, the investor offers a $1,000 finder’s fee directly to Robert for each suitable property he finds. This arrangement would be

A. a violation of the civil rights laws

B. acceptable since it is a finder’s fee, not a commission

C. a violation since finder’s fees cannot exceed $50

D. a violation of Chapter 475, F.S., because it is not paid through his broker

A

D. a violation of Chapter 475, F.S., because it is not paid through his broker

74
Q
  1. What should you do if you consider a rule to be invalid?

A. Notify your state legislators
B. Notify your local Board of REALTORS
C. Notify FREC
D. Ignore the rule

A

C. Notify FREC

75
Q
  1. Aaron Applicant has passed the state examination for becoming a sales associate. An hour later, Aaron has the opportunity to list his neighbor’s house. Aaron may

A. list the house as long as he has an employing broker and both Aaron and the employing broker are properly registered on the records of the DBPR

B. not list the property until he has sent a copy of his pass slip and a copy of his employing broker’s business tax receipt number to the Division of Real Estate for certification

C. list the property as long as he has been properly preregistered with his new owner-employer, and the pass slip is physically in his possession

D. not list the property until he has joined and paid the required fees to the local Association of REALTORS

A

A. list the house as long as he has an employing broker and both Aaron and the employing broker are properly registered on the records of the DBPR

76
Q
  1. Before the rules and regulations enacted by the FREC become effective, they must be filed with the

A. Attorney General
B. Secretary of State
C. Secretary of the Senate
D. Governor’s office

A

B. Secretary of State

77
Q
  1. “Certificates of the FREC” for use in Florida Courts and that reflect what the records of the FREC show or fail to show about any official matter are authenticated by the seal of the FREC and signed by the

A. Secretary of State
B. Chairperson of the FREC
C. Chief Investigator of the DRE
D. Vice Chairperson of the FREC

A

B. Chairperson of the FREC

78
Q
  1. The required sign on a branch office would NOT need to state

A. branch office
B. licensed real estate broker
C. the name of the business entity
D. the name of an individual broker

A

A. branch office

79
Q
  1. Jeff is the owner of a building that is leased to Craig. If Jeff sells the building, the lease

A. become a tenancy at will
B. must be renewed
C. is terminated
D. is binding on the new owner

A

D. is binding on the new owner

80
Q
  1. A sales associate went on vacation. While gone, the broker moves the office around the block. When the sales associate returned, there was a message that two serious prospects called, and it was urgent to return the calls. Also, a sale had closed in his or her absence, and the broker owes a commission. What should the sales associate do first?

A. Demand commission

B. Forget the commission since the sales associate wasn’t there

C. Call the two prospects immediately

D. Immediately request a reissue of license from FREC

A

C. Call the two prospects immediately

Real Estate Test (4 decks)

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