Test Prep Final Flashcards
Harry is looking at buying a building that has a monthly income of $3,600, a 5% vacancy rate, and annual expenses of $8,640. He is expecting a 12% return on his investment. How much should he pay for this building?
$270,000
$350,000
$480,000
$518,000
$270,000
When skilled labor is plentiful, plenty of land is available, and there is an abundance of building materials. What usually happens?
The supply of housing goes down because too much is available.
The supply of housing increases, and the price decreases.
Building starts are up, and the prices jump.
Prices are uncontrolled and go in any direction.
The principle of laissez-faire as applied to real estate most nearly means:
Buyer beware.
Let things be.
This is a seller’s market.
This is a buyer’s market.
Let things be.
Repairing the roof, recoating the driveways, replacing lighting, and cleaning out the gutters on an apartment building are considered by the property manager and the owner to be part of the job. This is considered:
preventative maintenance and is needed to maintain the value of the property.
deferred maintenance and is necessary to keep the tenants happy.
corrective maintenance and is part of the job of the property manager.
predictive maintenance and is required by the city in order to keep the property in order to get the proper occupancy permits.
preventative maintenance and is needed to maintain the value of the property.
Jeff just didn’t get around to paying his ad valorem taxes. He didn’t think it was important until a list of delinquent taxes was published in the local paper, and he found his property address on the list. A tax certificate was issued to an investor for Jeff’s property. How long does Jeff have to redeem his property by paying all taxes, costs, and interest to the county before the foreclosure process begins?
30 days
9 months
2 years
5 years
2 years
An undivided share in “common elements” describes:
condominium ownership.
a lease.
a duplex or townhome.
an easement.
condominium ownership.
James is unable to pay all of his bills and pay his mortgage payment. His second mortgage lender forecloses the property. James has a first mortgage, a second mortgage, and there is a mechanic’s lien; his property taxes are also not paid. Which of these liens will be paid first?
That would depend on when everything was recorded.
The first deed of trust is always paid before other liens.
The second deed of trust was the one that foreclosed, so it will be paid first.
The real estate property taxes are always the lien paid first in a foreclosure.
The real estate property taxes are always the lien paid first in a foreclosure.
The two methods of accounting used in business is
debit and credit
cash and accrual
assets and liabilities
financial and physical
cash and accrual
The fact that all real estate rules must be written or printed under the seal of the commission provides for what point of law?
This assures the quasi-judicial powers of the commission.
This assures the quality of the rules of the commission.
This provides Prima Facie evidence of the rule’s existence.
This provides a Statute of Limitations on their existence.
This provides Prima Facie evidence of the rule’s existence.
Goodwill is a measurement of
a business’ tangible assets.
a business’ reputation.
a business’ work in the community.
an owner’s background in the business.
a business’ tangible assets.
A property manager:
must have a separate license to manage properties in a condominium.
manages real property for owners.
manages all common areas for owners.
cannot manage a property that is managed by an association.
A property manager:
The subdivision has a deed restriction that all the homeowners must build their homes with shake shingle roofs or Spanish tile roofs. One home was not built to the restriction, and the other homeowners were upset. What can the neighbors do?
Nothing, since this is an individual’s own property.
Apply for a court injunction against the property owner.
A group of neighbors should inform the person that he is in violation.
File a lis pendens as soon as possible.
Apply for a court injunction against the property owner.
Old Man Smith died owning a property with an estimated value of $500,000. He never married and died without leaving a will. Smith’s sister was married and had two children. What will happen to the property upon the death of Mr. Smith?
The city will receive the property in escheat because there was no will.
The property will be sold and the proceeds donated to local charities.
The sister’s children will probably receive the property under the laws of descent.
No one will receive the property; the county will get it for lack of payment of taxes.
The sister’s children will probably receive the property under the laws of descent.
Susan received a 450-acre property from her grandfather when he died. He died testate. What is the legal name of what Susan received at the death of her grandfather?
Ademption
Devise
Demise
Land grant
Devise
he term “null and void” in relation to a license means
the license may be reactivated at any time.
the license has been suspended.
the license is effective but not active.
the license never existed.
the license never existed.
Local governments promote health, safety and general welfare by establishing:
Deed restrictions.
Restrictive covenants.
Zoning ordinances.
Subdivision covenants.
Zoning ordinances.
Which is not a way to terminate a listing agreement?
Major incapacity of the seller
Destruction of the property
Expiration of the time as stated in the agreement
Death of the sales associate
Death of the sales associate
A broker found a ready, willing, and able buyer who offered full price for a home. The seller refused to sell because the buyer was a minority. The broker could legally do all except:
Sue for his commission.
Inform the prospective buyer that help may be available from HUD.
Inform the seller that a possible violation of Federal Fair Housing Laws has occurred.
Show the property only to non-minorities per the seller’s instructions.
Show the property only to non-minorities per the seller’s instructions.
The appraiser was looking at three different homes to compare to the subject house. House A had one more bedroom and a screened-in porch compared to the subject house; House B had two fireplaces where the subject house had one; and House C had a three-car garage when the subject house only had a two-car garage. In order to reconcile these properties to the subject house, what must the appraiser do?
The appraiser never reconciles; he averages to get the value.
The appraiser will subtract from Houses A, B, and C to get the subject value.
The appraiser will add to Houses A, B, and C to get the subject value.
The appraiser will add the value of the amenities to get the value of the subject house.
The appraiser will subtract from Houses A, B, and C to get the subject value.
A federal bank examiner came to a bank in Jacksonville. He audited the books, and he checked out the staff and the office facilities. He checked the public rooms and the lunchroom. Everything was thoroughly examined. Later, he charged the branch manager with a violation of the Federal Fair Housing Act because he did not see:
Enough records showing minorities receiving loans.
Enough handicapped parking places.
An Equal Housing Opportunity Poster.
A mix of races in the office.
Julie is a sales associate for ABC Realty. She sold a house that was listed in the MLS from XYZ REALTORS®. The list price was $340,000, and the property sold at 95% of the list price. The commission rate to the seller was 7%, and the brokers divided the commission–55% to 45%–with Julie’s broker getting 45%. Julie and her broker split the commission equally. How much did Julie make in commission on this sale?
$5,087.25
$5,355.00
$6,783.00
$10,174.50
$5,087.25
Jones has a 100-acre farm. He sells it to a developer who is going to build houses. The developer will use 10% of the land for streets, sewers, and parks. He will divide the rest of the land into 120 lots. How many square feet will be in each lot?
1,590 sq. ft.
32,670 sq. ft.
392,000 sq. ft.
567,200 sq. ft.
32,670 sq. ft.
Johnson has his property listed with ABC Realty. On November 1, a fire causes considerable damage to the property. On November 15, Johnson rescinds the listing. On November 30, the broker was deemed by a judge to be incompetent. December 30 was the listing contract expiration date. On which date was the listing terminated?
November 1
November 30
December 1
December 30
November 1
The FREC is investigating a claim by a buyer that the broker had not given the proper disclosure to the buyer before the buyer purchased a home. The broker has paperwork dating back three years from the date of the signing of the document in question and one year after the legal action of the case. Is the broker protected?
Yes. Because the broker had the records at the time of the case, he is fine.
Yes. Because the broker has records dating back three years, he is fine.
No. The broker needs to keep the records five years from the date of the document and two years after any legal action.
No. The broker is better off without any record of the disclosure; the buyer can’t sue if there is no record.
No. The broker needs to keep the records five years from the date of the document and two years after any legal action.
Anderson sold property to Kelly. The contract contained the following statement: “Buyer to accept the property in an ‘as is’ condition.” Both the seller and the broker knew that the plumbing was in a major state of disrepair but did not tell Kelly. Would an action against the broker and the seller be successful?
Yes, because the disclosure under Johnson v. Davis requires sellers to disclose substantial defects in the property which are not readily observable by the buyer.
Because of the single agency relationship, the broker should have represented the buyer better.
The contract specifically states the property was being sold “as is.”
The contract is a meeting of the minds and the buyer accepted the terms written.
The contract specifically states the property was being sold “as is.”
The seller wishes to convey the property to a new owner. The seller arrives at the title company office prepared to sign the papers, and he dies at the table before anything can be signed. Can the property legally be transferred at this time?
Yes. Because the intent of the seller was to convey, the title company should prepare the paperwork.
Yes. Because the seller had already agreed to the price, the property can be conveyed.
No, because the grantee was not given the opportunity to sign the deed.
No. Because the seller did not acknowledge the deed, sign as the grantor, and deliver to the grantee, the property cannot be transferred at this time.
Yes. Because the intent of the seller was to convey, the title company should prepare the paperwork.
A broker from Nebraska wants a license in Florida. He takes a written exam of 40 questions and passes 35 of them. The broker has taken advantage of the written agreements between the states for real estate licensing. This is an example of:
A mutual recognition agreement between the states of Florida and Nebraska, created for real estate licensing.
A nonresident broker trying to obtain a Florida license.
A recognition of education awarded between Florida and all states for the purpose of real estate exams.
Reciprocity.
A mutual recognition agreement between the states of Florida and Nebraska, created for real estate licensing.
The federal government allows a homeowner certain deductions when filing the long-form for income tax. Which is not an allowable deduction?
Mortgage interest
Real estate taxes on a principal residence
Real estate taxes on a second home
Hazard insurance premiums
Hazard insurance premiums
Hypothecation most nearly means the:
property belongs to the lender until the loan is paid in full.
property is pledged as collateral for the loan if the buyer defaults.
mortgage is evidence of the debt.
note is the collateral for the loan.
property is pledged as collateral for the loan if the buyer defaults.
Sonny, a minor, contracts to buy a property, and the seller signs the contract. The contract is:
Valid.
Voidable.
Transferred to his parents.
Enforceable.
Voidable.
The buyer of an industrial complex wants the broker to place the earnest money in an interest-bearing account. The broker does this, clearly identifying all parties who are to receive the interest and the date the earned interest is to be disbursed. With only the verbal consent of the buyer, he places the money in an insured account in a depository in Florida. When the time comes to disburse the account, the broker will write a check to the buyer for the interest as the buyer agreed. Which statement describing this situation applies?
The broker is able to follow the buyer’s instructions without the seller’s permission.
The broker must obtain both the buyer and seller’s permission to do this in writing prior to following the buyer’s instructions.
The broker must not transfer the interest into a non-interest bearing account before disbursement.
The broker does not have the right to ever use an interest-bearing account under Florida Real Estate laws.
The broker must obtain both the buyer and seller’s permission to do this in writing prior to following the buyer’s instructions.
Pat bought a house and got a new interest-only loan. She paid $12,600 in interest during the first year, and the sale price of the property was $210,000. What was the interest rate?
4%
6%
8%
12%
6%
If the boundary of a piece of property ends short of the high tide watermark,
the ownership will NOT grant riparian rights.
the additional land belongs to the owner.
the owner must request riparian rights through the courts.
the owner cannot access the water.
the ownership will NOT grant riparian rights.
Jim Jones, the landlord, rents a property to Tom Smith, a physically disabled person. Mr. Smith, with Mr. Jones’ permission, modifies the house to suit his needs. When the lease expires, Mr. Smith will NOT be required to:
Remove the “grab rails” in the bathroom that were installed for his use.
Raise the kitchen cabinets that were lowered for his use.
Repair the walls where the “grab bars” were removed.
Restore the wide doorways that were installed for his wheelchair to their original size.
Restore the wide doorways that were installed for his wheelchair to their original size.
An optionor and optionee make a contract for an option on a commercial piece of property. If the optionee decides to exercise his option, when must he perform?
The optionee must exercise his option immediately.
The optionee must exercise his option under the terms of the option contract.
The optionee does not exercise; it is the optionor that must decide.
The optionee must exercise his option whenever the optionor demands.
The optionee must exercise his option under the terms of the option contract.
A local insurance salesperson wanted to make a lot of sales. He contacted all of his friends who were sales associates and told them that if they insisted that their buyers buy insurance from him, he would give the real estate sales associates cash at the end of each quarter. What best describes the situation?
The insurance man is simply networking and enlarging his business.
The payments are legal because they aren’t made for a specific deal.
This is a kickback, in violation of RESPA.
The real estate licensee and the insurance salesperson are violating the Truth in Lending Act.
This is a kickback, in violation of RESPA.
If house A had a sale price of $70,000, monthly rent of $500, and a GRM of 140; House B had a sale price of $68,500, monthly rent of $490, and GRM of 139.8, and House C had a sale price of $70,500, a monthly rent of $485, and a GRM of 139.6, what would be the value of a property which rented for $495 in the same neighborhood, assuming that house A is the best comparable?
The sale price should be $62,300.
The sale price should be $65,000.
The sale price should be $69,300.
The sale price should be $72,000.
The sale price should be $69,300.
A developer is considering building a community for senior citizens. He sets up a building that is occupied only by tenants 62 years or older. He designs community areas with barrier-free access, and he advertises to older people in retirement magazines. A niece of one of the owners requests permission to move in with her two children and live with her aunt in the building. The homeowners and the developers refuse to let her move in. Are they justified in doing this?
Despite the fact that the developer specifically designed this building for older people, he must allow the niece and her children to move in because they are related to the person living in the building.
It is illegal for the developer of this property to make rules that discriminate against occupancy for people with children.
This is a violation of Federal Fair Housing against discrimination based on familial status.
The developer may discriminate against the children and their mother because senior housing is exempt under Federal Fair Housing when certain conditions have been met.
The developer may discriminate against the children and their mother because senior housing is exempt under Federal Fair Housing when certain conditions have been met.
