The concept that states that an informed buyer will pay no more for a property than the cost of acquiring another equally desirable property with the same or equal utility is based upon which of the following?
Principle of substitution
Theory of conformity
Principle of highest and best use
Theory of increasing and decreasing returns
A broker gave permission for a real estate sales associate to deal directly with the broker’s principal. Which statement correctly applies?
The broker no longer has a fiduciary relationship with the principal.
The broker has a fiduciary relationship with the sales associate, but not with the principal.
The sales associate is no longer under the supervision or direction of the broker.
Both the broker and sales associate have a fiduciary relationship with the principal.
The interest rate on a loan is 5.75%. The lender is charging four points. What is the lender’s approximate effective yield?
6%
6.13%
6.25%
6.5%
Which survey system is normally used today to describe property located in residential subdivisions?
Government Survey System
Lot and block
Metes and bounds
Laser Grid/Intersection Method (LGIM)
A real estate licensee working with a seller in limited representation receives a telephone call from another real estate agent working with the buyer. The agent’s opening comments state the following. “Hi, this is Robert Dawson, with East Side Realty. I am standing in front of a house that has your name on the listing sign and I am with my principal. I have a few questions to ask you about the property.” Based on the buyer’s agent’s comments, what should the licensee working with the seller conclude?
The agent representing the buyer is in a single agency relationship.
The licensee should not discuss the property with the agent until they have the receipt of the No Brokerage Relationship disclosure from Robert’s buyer.
The broker agent from East Side Realty must initiate the conversation with the licensee’s broker and then continue with the transaction.
A broker’s license is required to have the licensee’s name appear on a sign marketing the property.
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.
A parcel of property measures 330 feet along the highway and contains 10 acres. What is the depth of the tract?
330 feet
660 feet
1,320 feet
1,980 feet
Each of the following is considered a triggering term, EXCEPT:
“Assumable Mortgage”
“Interest Rates as low as 2%”
“Only $5,000 down payment to own this beautiful home!”
“Mortgage Payments as low as $800/month”
What is the grace period for a sales associate to complete their post-license education after the original expiration date on their license?
Six months
Two years
One year
None
Which statement correctly identifies the loan type with its function?
FHA guarantees loans
VA guarantees loans
Fannie Mae insures loans
Ginnie Mae insures loans
Which of the following characteristics correctly apply to a township?
6 miles square
36 sections
24 square miles
Both A and B
What type of tenancy is formed by a written agreement that creates a non-freehold estate in real property providing occupancy of the property for a specified time period?
Tenancy in common
Tenancy at will
Tenancy for years
Tenancy at sufferance
Which type of deed is the most commonly used and provides the most protection for the grantee?
Quitclaim deed
Bargain and sale deed
General warranty deed
Master deed
Which statement is correct concerning agency relationships?
A special agent is only authorized to perform a single act on behalf of the principal.
The only party who can employ a broker as an agent to perform services of real estate is the seller/owner.
A sales associate is a general agent of the broker’s principals.
A fiduciary relationship cannot be created without the payment of compensation.
A buyer enters into a contract with a seller. A week before closing, the seller decides that they no longer want to sell the property. The seller tells the buyer that they can have their deposit back. The buyer refuses and would file which type of suit?
Suit for cancellation
Suit for specific performance
Suit for mistrust
Suit for unliquidated damages
The real estate business is influenced by government at the local, state, and federal levels. Which of the following is influenced by the local government?
Building moratorium
Monetary policy
Documentary stamp tax
Discount point limitations
Clarence made a written offer of $78,000 on Dan’s home that was listed with broker Alice. Before the offer could be presented, Larry arrived at Alice’s office and made an oral offer of $82,000 on the same property but did not give an earnest money deposit. Alice promised Larry that she would submit the oral offer but only presented the written offer to Dan. Which statement is correct?
A broker is not required to submit an oral offer.
The broker was not obligated to present Larry’s oral offer.
Oral offers not accompanied by an earnest money deposit are worthless and should not be presented.
The broker should have disclosed the details of the oral offer to Dan when she submitted the $78,000 written offer.
Which document specifies the amount of the mortgage loan, the interest rate, loan term, and repayment schedule?
Trust agreement
Mortgage deed
Mortgage
Promissory note
Using the information provided, what is the estimated value for this income producing property? ROUND YOUR ANSWER TO THE NEAREST DOLLAR.
Number of units: 4
Monthly rental per unit: $1,800
Vacancy & Collection: 5% of PGI
Property taxes: $8,400
Property insurance: $3,500
Variable expenses: $18,000
Monthly mortgage payment: $4,500
Reserves for replacements: $3,000
Captialization rate: 7%
$581,200
$638,285
$702,571
$706,000
Which type of obsolescence, in the cost approach to appraisal, is almost always incurable?
External obsolescence
Functional obsolescence
Physical deterioration
Quantity survey obsolescence
Which Act requires lenders to judge loan applicants on the basis of credit rating, income, expenses, and assets without regard to their age, race, religion, sex, marital status, or nationality?
Fair Housing Act
Equal Credit Opportunity Act
Fair Loan Act
Fair Underwriters Act
The sales comparison, cost depreciation, and income approach are all based on an economic theory that a prudent buyer or investor will pay no more for a property than the cost of acquiring, through purchase or construction, an equally desirable alternative property. This is known as which principle of value?
Principle of alignment
Principle of allocation
Principle of substitution
Principle of capital investment
After defaulting on mortgage payments but prior to foreclosure, the mortgagor has the right to redeem their interest in the mortgaged property by paying the money owed the lender. What term refers to the right exercised by the mortgagor?
Statutory right of redemption
Right of defeasance
Equity of redemption
Release of mortgage
All of the following statements are correct regarding a Planned Unit Development (PUD), EXCEPT:
Buffer zones are often provided as planned neutral space between different areas of use.
A buyer may void a sales contract within three days if the required disclosure was not provided.
Zero lot line homes are not permitted in an area zoned PUD.
PUD zoning is also called cluster zoning.
Eminent domain includes all of the following, EXCEPT:
The right of the government to take private land for public use
A court action exercising eminent domain, called condemnation
The ability for an owner to dispute the amount of money offered for their property
The ability of an owner to refuse to sell the property to the government
Which statement pertaining to closing a real estate transaction is correct?
The seller usually provides either an abstract of title or title insurance as evidence of merchantable title.
Closing costs are established by law and cannot be negotiated between the parties.
A closing cannot legally be finalized unless both the buyer and seller are present.
Prorated costs are calculated as of the contract date.
Which section in a township is north of Section 1?
Section 6
Section 12
Section 31
Section 36
What is the price of state documentary stamp tax on the deed for property that is located outside of Dade County?
Sixty cents per hundred dollars of sales price
Sixty cents per hundred dollars of mortgage amount
Seventy cents per thousand dollars of sales price
Seventy cents per hundred dollars of sales price plus seventy cents for any fractional part of a hundred dollars of sales price
Which term refers to the primary reference point in a metes and bounds legal description of real property?
First point
Starting point
Point of beginning
Initial reference point
Misrepresentation can be considered to be fraud if:
it is done intentionally and a party relies on it.
it is made by a licensed real estate agent.
it involves a minor error in the property description.
it is corrected before the transaction is completed.
Donna has been notified that her spouse will be transferred to the New York company office. Donna currently has a Florida Real Estate Sales Associate’s License. She plans to accompany her spouse as a result of the reassignment and would like to keep her license. What is Donna required to do to continue practicing real estate in Florida?
Be located in Florida in order to sell property in Florida
Be a broker to be permitted to sell real estate outside of Florida
Sign a statement indicating her understanding that if her request is approved she may not obtain a New York real estate license
Notify the Florida Real Estate Commission within 60 days of her change in residency and comply with all non-resident requirements
Bob and Sue are going to build their dream home on lakefront property. They discover that the plans are no longer in compliance with building codes due to a change in the property. This hardship was caused by erosion of the land. To move forward with their plans, what should Bob and Sue request from the zoning board?
A special exception
A non-conforming use
A conforming use
A variance
The value of a business that is failing and not expected to continue would best be determined using which valuation method?
Liquidation value
Cost depreciation
Comparable sales
Income
The loan amount is $410,000 and the loan-to-value ratio is 75%. What is the purchase price of the property?
$102,500
$307,500
$465,000
$546,666
How may contractual rights be transferred from one person to another?
Assumption
Assignment
Subordination
Renunciation
Each of the following is a valid form of co-ownership, EXCEPT:
Tenants in common
Joint tenants
Estate in severalty
Tenants by the entireties
During a formal hearing being held as the result of an administrative complaint, how may a broker seek testimony from a witness?
By asking the administrative law judge to subpoena the witness
By proving that the witness is honest and trustworthy
By sending the witness a written notice to appear
By having their lawyer issue a writ of mandamus
Which of the following is a possible disadvantage of investing in real estate?
Appreciation
Inflation hedge
Equity build-up
Illiquidity
A licensee has been found guilty of a violation of the rules of the Real Estate Commission. The Commission is authorized to impose any of the following penalties, EXCEPT:
Reprimand
Administrative fine of up to $10,000 per offense
License suspension for up to 10 years
License revocation
Certain contracts need to be in writing to be enforceable. A contract that transfers an interest in real property must be in writing. Which of the following dictates this requirement?
Florida Real Estate Commission
Statute of Frauds
Doctrine of Contractual Capacity
Florida Association of REALTORS®
The act of transferring ownership, title or an interest in real property from one person to another is called alienation. Alienation may be voluntary or involuntary. Which types of ownership transfer are correctly identified as voluntary or involuntary?
Voluntary: deed, will, escheat
Voluntary: eminent domain, escheat, will
Involuntary: adverse possession, eminent domain, escheat
Voluntary: will, deed, eminent domain
Which listing best protects a broker with respect to receiving compensation?
Open
Exclusive Agency
Net
Exclusive Right of Sale
Which institutions in the state of Florida are approved depositories for earnest money?
Title companies, banks, savings and loan associations, credit unions
Banks, savings and loan associations, finance companies, credit unions
Insurance companies, savings and loan associations, credit unions, title companies
Stock brokers, finance companies, banks, savings and loan associations
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 Federal Housing Administration (FHA) insures loans for lenders of real property. Which statement about FHA loans is FALSE?
The buyer must pay a one-time or lifetime insurance premium.
The buyer does not have to make a down payment.
The buyer will not have to pay a pre-payment penalty if the property is sold prior to loan payoff.
The buyer may have to pay “points” to the lender.
A buyer and seller have entered into a contract for the sale of a duplex. The buyer defaults on the contract and the seller claims the escrow deposit per contractual agreement. What term applies to this situation?
Compensatory damages
A writ of mandamus
Specific performance
Liquidated damages
Three sisters buy a home. They each have equal portions of possession, interest, time and title. They decide that upon death, the survivor will acquire their shares. What type of tenancy exists?
Joint tenancy
Tenancy in common
Tenancy by the entireties
Tenancy in severalty
The clause in a mortgage that permits the lender to declare the entire unpaid balance immediately due and payable upon default is called the:
judgment clause.
alienation clause.
acceleration clause.
defeasance clause.