An investment group bought a building with 12 apartments for $4,362,365. The apartments rent monthly: 3 @ $3,000, 3 @ $3,750, 3 @ $4,000, and 3 penthouses @ $5,000. The group has a 7% vacancy rate and annual expenses of $47,450. What will be the annual rate of return on this building?
1%
3%
7%
11%
A formal hearing requested from the Real Estate Commission will be held by a/an:
administrative law judge.
circuit court judge.
county clerk.
paid arbitrator.
The principle of substitution states that:
an informed buyer will pay no more for a property than the cost of obtaining an equally desirable property.
a property’s value increases when it is surrounded by similar properties.
a property’s value is determined by the cost of reproducing it exactly.
the value of a property is based on its potential future income.
In Florida, a single agency occurs when:
a broker acts as a neutral facilitator for both parties in a transaction.
a broker provides limited services to both the seller and buyer without full representation.
a broker represents both the seller and buyer in the same transaction.
a broker represents either the seller or buyer, but not both, in the same transaction.
A homeowner in a neighborhood with homes valued in the $100,000 range adds an in-ground pool at a cost of $75,000. This is an example of which of the following?
Construction depreciation
Over-improvement
Accrued depreciation
Modified loss in value
When describing agency relationships, which type of agency authorizes the agent to perform a variety of tasks on behalf of a client, on an ongoing basis?
General agency
Limited agency
Special agency
Universal agency
How many square miles are in one standard township?
1
6
36
640
A Florida real estate sales associate:
cannot represent both the buyer and seller in the same transaction as a dual agent
should not present offers without a deposit to a seller.
must complete a thorough inspection of the property in order is not required to disclose material facts to clients.
does not owe any fiduciary duties to a principal.
During the foreclosure process, the mortgagor will receive sales proceeds:
before any lienholders are paid.
immediately after the foreclosure sale is completed.
only after all other lienholders have been paid.
only if the property sells for more than the appraised value.
In appraisal theory, the principle of substitution states that:
informed buyers will pay no more for a property than they could spend to buy a comparable one nearby.
a property’s value is maximized when it is surrounded by similar properties.
a property’s value can decrease when it is surrounded by properties of lower value.
the value of a property is based on its potential future income.
Mario is looking to purchase a 3-bedroom, 2-bathroom house in the neighborhood where he grew up; he finds an initially appealing one for $425,000. However, after digging a little deeper, he finds several other similarly designed houses in similar condition listed for around $400,000, and decides not to proceed with the one listed at $425,000. This is an example of the principle of:
anticipation.
contribution.
highest and best use.
substitution.
The county plans to install sidewalks along a busy street. One owner’s 15,000 sq. ft. lot measures 150 front-feet adjacent to the street. The cost of the improvement is $44 per lineal foot. If the county pays 25% of the expense, how much is the special assessment to the property owner?
$4,950
$3,300
$2,475
$1,650
A contract that has no legal effect, and cannot be performed or enforced by either party, is:
bilateral.
unilateral.
void.
voidable.
Which statement is correct regarding quitclaim deeds?
The grantor makes no warranties about the condition of title
A quitclaim deed establishs joint tenancy between co-owners
The grantor makes full warranties and guarantees about the condition of title.
A quitclaim deed is used to secure underground mineral rights.
An order for specific performance means that:
the breaching party must pay a penalty fee to the non-breaching party.
the contract is terminated and each party returns any consideration received.
the contract terms are renegotiated to accommodate both parties’ new circumstances.
the parties would be ordered to complete the promise as originally promised.
The maximum administrative fine that the Real Estate Commission can impose per offense is:
$1,000
$5,000
$10,000
$50,000
The Florida statute of limitations:
bars legal action after a given period of time has passed following a specified event.
sets a maximum time limit within which legal action can be taken to enforce a contract.
requires that certain types of contracts must be in writing and signed to be enforceable.
specifies the conditions under which a contract can be terminated.
A potential disadvantage for real estate investors is illiquidity, which refers to:
the complexity of managing multiple rental properties.
the difficulty of selling or buying real estate quickly.
the high cost of property maintenance and repairs.
the risk of property value depreciation over time.
In a percentage lease, the tenant pays:
a fixed monthly rent that increases annually.
a flat fee plus operating expenses.
a flat fee plus a percentage of gross sales.
a variable rent based on the property’s market value.
Section 8 would be located to the ____ of Section 10 within a township.
east
north
south
west
Which combination of interest rate and points would offer a lender the most favorable yield over the life of the loan?
6.0% plus 8 points
7.1% plus 2 points
7.2% plus 2 points
7.5% plus no points
The Equal Credit Opportunity Act prohibits discrimination in:
employment.
housing.
lending.
public accommodations.
A sales associate’s license would become ineffective if:
they are convicted of a crime of moral turpitude.
their employing broker’s license is revoked.
they fail to complete post-license education requirements.
they take a leave of absence from their brokerage.
A promissory note:
guarantees the borrower will not default on the loan.
provides a detailed description of the collateral property.
specifies the loan amount, interest rate, and repayment terms.
transfers ownership of the property to the lender.
Francisco works for broker Juan but resigned and went to work for broker Myron. Francisco’s last sale was completed before switching over to working for broker Myron, but Juan refuses to pay Francisco’s share of the commission. To recover his commission, Francisco would be able to sue:
both broker Juan and broker Myron.
only broker Juan.
only broker Myron.
the seller involved in the transaction.
Functional obsolescence would reduce the value of a property that:
has a poorly-maintained exterior.
is located in a high-crime area.
is overimproved or structurally deficient.
is situated near a busy highway.
Private mortgage insurance would be used in a:
conventional loan.
FHA loan.
seller-financed loan.
VA loan.
In a lien theory state like Florida, title to the property that is subject to a mortgage belongs to:
the borrower/owner.
the lender until the mortgage is paid off.
the state government until the mortgage is satisfied.
a third-party trustee.
Culpable negligence refers to:
a licensee intentionally deceiving a client for personal gain.
a licensee engaging in unauthorized practice of law.
a licensee operating in a careless or reckless manner.
a licensee providing expert advice without proper qualifications.
The Bakers have an estate for years, which means they have:
a freehold estate in perpetuity.
a leasehold estate that lasts for a specified period of time.
a freehold estate that grants ownership rights indefinitely.
a month-to-month rental agreement.
The Real Estate Settlement Procedures Act:
mandates that all real estate transactions must be conducted through a licensed broker.
requires that all real estate agents must disclose their commission rates to clients before listing a property.
requires that borrowers must be informed of settlement costs in federally-related loan transactions.
sets the maximum interest rates that lenders can charge on mortgage loans.
A vacant parcel of land (not in Miami-Dade County) is located in the NW ¼ of the SW ¼ of the NE ¼ of the SW ¼ of Section #12, T4S, R10E. The land is selling for $50 per square foot. What amount would be paid for the tax on the deed?
$560
$1,905.76
$6,098.40
$38,115
Florida requirements for a broker’s license include:
a 45-hour prelicensing course and at least 18 months of experience acting as a sales associate in the last four years.
a 60-hour prelicensing course and at least 12 months of experience acting as a sales associate in the last three years.
a 72-hour prelicensing course and at least 24 months of experience acting as a sales associate in the last five years.
a 90-hour prelicensing course and at least 36 months of experience acting as a sales associate in the last seven years.
The tax paid in Florida before a deed can be recorded, that is 70 cents per hundred dollars of sales price in most counties, is known as the:
documentary stamp tax.
excise tax.
property transfer tax.
recording fee.
Which section in a township is south of Section 36?
Section 1
Section 6
Section 12
Section 31
The requirement that an advertisement describing a loan that includes triggering terms must disclose the loan’s annual percentage rate comes from the:
Equal Credit Opportunity Act.
Fair Credit Reporting Act.
Fair Housing Act.
Truth in Lending Act.
A blind ad:
does not contain the trade or registered name of the broker.
does not disclose the property’s address.
does not include the price of the property.
does not provide the contact information of the listing agent.
A deed must be signed by:
the grantee and two witnesses.
the grantee and grantor.
the grantee, grantor, and two witnesses.
the grantor and two witnesses.
In an exclusive right of sale listing, the seller will pay a commission to the broker:
as long as the property sells during the listing period.
only if the broker personally finds the buyer.
only if the property sells for the listing price or higher.
only if the seller does not find a buyer independently.
An attorney in fact is a person who:
has been appointed by a court to manage the affairs of a minor.
has been authorized to act on another person’s behalf through a power of attorney.
is a licensed attorney who represents clients in court.
is a real estate agent who has the authority to sign contracts on behalf of clients.
A broker has the duty to:
accept the highest offer on behalf of the seller.
present all offers, including offers made only orally.
present written offers, but not oral offers or offers without a deposit.
reject any offers that do not meet the listing price.
A bank considering a short sale and wanting to know a likely selling price will typically request a:
broker price opinion.
home inspection report.
property tax assessment.
title insurance policy.
In a gross lease:
the tenant is responsible for all property taxes, insurance, and maintenance costs.
the tenant pays a flat rental amount while the landlord covers operating expenses.
the tenant pays a percentage of their gross sales in addition to base rent.
the tenant pays a variable rent amount based on the property’s market value.
Water rights associated with a river or stream are called
littoral rights.
groundwater rights.
navigable water rights.
riparian rights.
Karen listed a property for $410,000. The listing states that the seller agrees to pay Karen’s broker a 6% commission of the actual sale price. The property sold for $400,000. Since she has a 50/50 commission split with her broker, how much was Karen’s commission?
$6,000
$12,000
$12,300
$24,000
Mortgage payments are considered:
fixed expenses.
reserves for replacement.
separately from the issue of expenses altogether.
variable expenses.
A property’s effective age refers to:
the actual chronological age of the property since it was built.
the age the improvements appear to be, taking into account wear and tear or updates.
the expected useful life of the property based on current market conditions.
the number of years the property has been owned by the current owner.
The statute of limitations:
outlines the procedures for transferring property ownership.
sets a time limit for filing a lawsuit to enforce a contract.
states that certain types of contracts must be in writing to be valid.
specifies the conditions under which a contract can be terminated.
The interest rate on a loan is 4.75%. The lender is charging two points. What is the lender’s approximate effective yield?
5%
5.25%
5.5%
5.75%
The loan amount is $820,000 and the loan-to-value ratio is 75%. What is the purchase price of the property?
$205,000
$615,000
$930,000
$1,093,333
The Bakers remodeled their kitchen with custom cabinetry, marble countertops, and Miele appliances at a cost of $90,000 in a neighborhood with homes valued in the $150,000 range.
External obsolescence
Over-improvement
Under-improvement
Functional obsolescence
The statute of frauds requires:
all verbal agreements to be notarized.
property deeds to be recorded within 30 days.
real estate agents to be licensed by the state.
real estate contracts to be in writing.
Under Florida law, a broker associate is a:
person who can independently operate a real estate brokerage without supervision.
person who has passed the broker license examination but continues to act as a sales associate for another broker.
person who is licensed to practice law and real estate simultaneously.
person who manages multiple real estate offices under a single brokerage.
A residence that is rented is being sold with a closing on March 12th. The rent, which is due and payable on the first of each month, is $1,100. If the day of closing belongs to the seller, what is the amount of the rent proration and how will it be allocated between the parties?
$425.80, debit buyer, credit seller
$425.80, debit seller, credit buyer
$674.20, debit buyer, credit seller
$674.20, debit seller, credit buyer
The cost approach would be used to estimate the value of:
a commercial shopping center.
an older single-family home.
a public library.
a rental apartment building.
A 31% housing expense ratio and a 43% total obligations ratio are characteristic of a/an:
conventional loan.
FHA loan.
subprime loan.
VA loan.
How many hours of post-license continuing education must a sales associate complete before the end of their initial license period?
15
30
45
60
An option contract gives a person the right to:
lease a property indefinitely without any obligation to buy.
purchase a property during a specified period of time.
sell a property at any time without the buyer’s consent.
transfer ownership of a property to another party without any conditions.
To be valid, a deed must be:
delivered to and accepted by the grantee.
notarized by a licensed attorney.
recorded in the public record.
signed by the grantee.
If there is a breach of contract, the type of damages based on the actual losses of the harmed party are called:
compensatory damages
liquidated damages
nominal damages
punitive damages
Estrella is a real estate licensee who is selling her own property; she must:
disclose her licensee status before entering into negotiations with a prospective buyer.
list the property exclusively with her employing broker.
obtain permission from the real estate commission before listing the property.
offer a discount on the property to any buyer represented by another licensee.
A party to an oral contract has four years to bring a lawsuit to enforce the contract, according to Florida’s:
doctrine of laches.
parol evidence rule.
statute of frauds.
statute of limitations.
The Florida Department of Business and Professional Regulation is an example of a/an:
administrative agency.
legislative body.
judicial court.
private corporation.
Liquidated damages would take the form of:
an agreement within a contract that in the event of a buyer breach the seller will retain 3% of the contract price.
a court-ordered payment to cover the seller’s legal fees in the event of a buyer breach.
a court-ordered refund of the buyer’s earnest money deposit if the seller breaches the contract.
a penalty fee imposed by the real estate commission for non-compliance with contract terms.
Within how many days must a broker facing conflicting demands for funds held in escrow notify the Florida Real Estate Commission?
10
15
20
30
A new broker places an earnest money deposit temporarily in their brokerage’s general operating account until he can set up a trust account. This would be considered:
commingling.
conversion.
fraud.
valid.
A mix of zero lot line homes and land reserved as common areas may be seen in a:
commercial strip mall.
industrial park.
planned unit development.
traditional subdivision.
A residence recently sold for $360,000 that was rented for $3,300 per month. What is the Gross Rent Multiplier?
92
106
109
112
A joint venture is:
a business arrangement where two parties combine efforts for a single business transaction.
a legal entity that operates as a corporation with shareholders.
a trust where trustees manage assets for the beneficiaries.
a type of partnership where all partners have limited liability.
Property taxes are $8,400 per year and are paid in arrears. The closing is April 20th and closing day is charged to the buyer. Using the 365-day method, how will the proration of property taxes show on the closing statement?
Credit seller $2,508.50 and debit buyer $2,508.50
Credit seller $5,891.50 and debit buyer $5,891.50
Credit buyer $2,508.50 and debit seller $2,508.50
Credit buyer $5,891.50 and debit seller $2,508.50
A broker may place escrow funds into an insured account with a: any of the following, except a(n):
escrow account at a commercial bank.
trust escrow account at credit union.
broker’s business account at a commercial bank.
escrow account at title company which has trust powers.
An assessor’s parcel number is:
a code used to determine the zoning classification of a property.
a number that indicates the property’s market value.
a unique identifier used to track property ownership changes.
a unique number assigned to each property for purposes of tax collection.
Examples of the Florida Real Estate Commission’s executive powers would include:
denying invalid license applications.
determining the commission rates for real estate transactions.
enacting new real estate laws.
investigating complaints against licensees.
After defaulting on a loan, the right of borrowers to keep their mortgaged property by repaying the loan amount plus interest and costs is called:
foreclosure.
loan modification.
equity of redemption.
right of recovery
A referral fee would be legally permissible in the case of:
a Florida broker paying a referral fee to an unlicensed individual who introduced a potential buyer.
a Florida broker sharing a commission with an out-of-state broker who provided contact information but did not participate in the transaction otherwise.
a Florida broker receiving a referral fee from a mortgage company for recommending their services to clients.
a Florida sales associate paying a referral fee to a licensed sales associate in Florida who is not involved in the transaction.
Sole ownership refers to:
property with no more than 1 owner.
the shareholders of a corporation.
several partners who have equal ownership shares.
an estate in severalty
The metes and bounds method of land description:
cannot be used for rural properties.
involves measurements of the property lines by a surveyor.
makes reference to historic government surveys using an official grid.
makes reference to recorded plat maps.
Liquidated damages are:
a financial penalty imposed by a court for violating a statutory regulation.
a reimbursement for actual expenses incurred due to a breach of contract.
a remedy where a party to a contract receives a specified amount in the event of a breach of contract.
a type of compensation awarded for emotional distress caused by a breach of contract.
What happens to the property taxes for the buyer of a property that was subject to a Save Our Homes assessment limitation?
The limitation is lost and the new homeowner is assessed at the full taxable value.
The new homeowner continues to benefit from the previous owner’s assessment limitation.
The new homeowner receives a one-time tax credit equal to the difference between the assessed value and the market value.
The property taxes are frozen at the previous year’s amount for the new homeowner.
Which of the following persons would not need a real estate license to engage in real estate activities?
Court-appointed trustee
Property manager
Real estate broker
Real estate assistant
A tax that is levied only on properties that benefit from a specific public improvement is known as a:
ad valorem tax.
excise tax.
property transfer tax.
special assessment.
A broker may be engaged in the unauthorized practice of law if they:
assist a client in filling out a pre-printed contract form.
provide a comparative market analysis.
recommend a home inspector to a client.
render an opinion of title.
At least one corporate officer must hold a broker license in order for a brokerage:
to be a real estate brokerage corporation.
to be eligible for tax deductions on business expenses.
to legally advertise real estate services on social media platforms.
to qualify for a business loan from a commercial bank.
A document stating that a loan has been fully repaid is called a(n):
letter of completion.
letter of satisfaction.
payoff statement.
offer and acceptance.
The remaining value of the assets of business if it were sold promptly is called:
insurable value.
market value.
value in use.
Liquidation value.
Joint tenancy is distinguished by:
the ability to transfer interest without the consent of other co-owners.
the necessity for a written agreement to be valid.
the requirement for unequal ownership shares.
the right of survivorship.
The city plans to take Merle’s property to build a highway offramp. They plan to offer him market value for the property. Merle may:
demand that the city provide him with a replacement property.
dispute in court the amount offered for his property.
negotiate with the city to build the offramp on a different property.
refuse to sell the property under any circumstances.
A direction for one step in a metes and bounds direction is “N 45 degrees E.” This would be:
due north.
due northeast.
due northwest.
due east.
When may a Florida broker pay a referral fee?
A Florida broker may pay a referral fee to an unlicensed individual who introduced a potential buyer.
A Florida broker may pay a referral fee to an out-of-state broker who provided contact information but did not participate in the transaction.
A Florida broker may pay a referral fee to a mortgage company for prequalifying potential buyers.
A Florida broker may pay a referral fee directly to a sales associate licensed in another state.