June is looking into buying her first home. She is shown a number of houses on the market, but the market appears to be sluggish because there are so few buyers. Interest rates are steady and June has several good prospect homes to choose from at reasonable prices. June is in a…?
Buyer’s market
Seller’s market
Lender’s market
Builder’s market
James is looking to purchase a single-family home. He needs to obtain a loan in order to complete the purchase but lacks good credit. Why may James opt for an installment sales contract with the seller rather than obtain a traditional mortgage from a lender?
An installment sales contract is interest-free for the first 12 months.
An installment sales contract can be obtained from more lenders compared to a typical mortgage.
An installment sales contract is a form a seller financing that offers much more flexibility compared to a typical mortgage.
An installment sales contract will typically included a lower interest rate.
Jason buys a large vacant lot in a predominantly residential neighborhood. He wants to build a building on the land, which will give him the largest return on investment. He figures a large high-rise office building will do the trick. Why would Jason most likely not be able to build a high-rise office building on his property?
The local zoning laws will not permit a high-rise office building in a residential neighborhood.
HUD does not permit commercial buildings in residential neighborhoods.
The Department of Health will not permit such a building in a residential neighborhood.
Real estate developers can no longer build high-rise office buildings.
Eddy is a seasoned real estate investor who specializes in retail properties. Eddy learned the power of using leverage early in his investing career. Leverage allows Eddy to realize a greater return on investment. Knowing this, what does Eddy most likely NOT do?
Assume existing loans from the properties he buys.
Raise money from investors to purchase properties.
Purchase properties using all cash.
Obtain a commercial loan from a bank.
A sales associate presents an owner with an offer for $175,000 on behalf of a buyer. The owner countered at $185,000. While the buyers are considering their response, the owner sends an email rescinding the counteroffer. Which of the following statements is correct?
The sales associate must be paid the full commission.
The buyers are the only ones that can rescind the counteroffer.
There is no contract.
The seller has signed the counteroffer so it stands.
The FREC is investigating a claim against a broker for failure to properly disclose a material fact before a sale closed four years ago. The broker keeps all his records for three years and has a policy of keeping records for an additional year after any legal action has been taken. Is his record keeping in order?
Yes. The broker had the records at the time of the investigation.
No. The buyer can sue even if there are detailed records.
Yes. All the records he has date back three years except the ones where legal action has occurred.
No. The records need to be kept for five years from the date of the start of the transaction and an additional two years after any legal action.
The buyer and seller were arguing over a small river rock fountain, which before closing had been sunk into the patio and cemented in place. No mention of the fountain had been made during negotiations and both sales associates believed the fountain would stay. When the buyer went by to pick up the keys after closing, the fountain was gone and in its place was a small wooden windmill and 2 plastic gnomes. The seller claimed the fountain was personal property and the buyer claimed it was a fixture. Which statement about the fountain is true?
The method of attachment in this case was cement. Clearly the item was affixed and permanent.
The fountain should have been listed by the buyer in the contract. Since it was not, it is personal property.
The fountain was purchased by the seller. It should always be his.
Even though the fountain was cemented into the ground, it is definitely personal property and does not have to be left for the buyer.
Last month, Alex obtained his Florida real estate sales associate’s license and already closed his first deal. He’s wants to accelerate his career by opening up his own real estate office and have other real estate sales associates work under him. Can Alex do this?
Yes. A sales associate can open their own office at any time.
No. He must first obtain worker’s compensation insurance, which cannot be obtained until he has at least 12 months of experience as a sales associate.
No. He must first obtain his Florida real estate brokers license, which will require at least 24 months of experience as a sales associate, and completion of the broker’s course and FL broker’s exam.
Yes. Sales associates are permitted to open their own real estate office after closing their first deal.
Kathy receives her real estate license. Within a month of receiving her license, she gets a new job offer she can’t refuse. She decides to continue to hold her license but not practice, do any real estate work, or collect any referrals at this time. She is willing to renew her license, do her continuing education, and pay the renewal fee for her license. What should Kathy do?
Seek a broker who will not be upset if she does not work too hard.
Seek an involuntary inactive license.
Opt not renew her license or complete the educational requirements.
Seek a voluntary inactive license.
Mary owns an older home, which she’s looking to sell in the near future. She’s worried that there may be asbestos located throughout the house, so she decides to hire a professional to test for and remove any asbestos found. Where may asbestos be found in Mary’s house?
Foundation walls and floor joists.
Roofing shingles, floor tiles, and wall insulation.
Exterior paint, windows, and roof rafters.
Any wood stud partition wall.
Bobby is a licensed Florida attorney and a member of the Florida Bar. He is also a part-time property inspector and a loan officer. If Bobby decides to obtain his Florida real estate sales associate’s license, why may he be exempt from taking the 63-hour pre-license course?
Loan officers are exempt from taking the pre-license course.
Members of the Florida Bar are exempt from taking the pre-license course.
Property inspectors are exempt from taking the pre-license course.
Bobby will not be exempt from taking the pre-license course.
Lisa purchased her home 5 years ago for $265,000. Lisa stopped making payments on her home loan, and unfortunately, the real estate market has gone down significantly in recent years. Lisa needs to sell her home immediately to avoid foreclosure; however, her property is now only worth $189,000. What should Lisa do next?
Simply walk away from the property.
Take out a second mortgage to catch up on her home loan payments.
Work with her lender to sell her property as a short sale.
Sell her property off as an REO.
Abby is looking to purchase a house in Palm Beach, FL. She narrowed her search down to two possible houses. Both houses are of similar size; however, one house is on the beach front, while the other house is further in-land. The beach front property is 25% more expensive. Why would this be the case?
There is more demand for beach front property with less supply available. This scenario drives up prices.
The beach front property is located in a flood zone, which drives up prices.
There is less demand for beach front property with more supply available. This scenario drives up prices.
The beach front property includes a higher cost of insurance, which drives up prices.
A broker enters into a listing contract with a seller. The broker markets the property for several weeks and receives four offers. The seller selects the highest bid and ultimately closes on the property. However, the seller refuses to pay the broker their commission. What happens next?
The broker cannot do anything as a commission in this case is only optional.
The broker can take legal action against the seller to obtain the commission owed to them since they successfully found a buyer for the property.
The broker can negotiate a smaller commission with the seller.
The broker can force the buyer to pay the commission.
Sara is a homeowner looking to sell her house. She hires James, a licensed Florida broker as the listing agent. Eric is a prospective buyer looking to make an offer on Sara’s house. How would you characterize each party’s role from the seller’s perspective?
James is the client, Sara is the customer, and Eric is the agent.
James is the agent, Sara is the client, and Eric is the customer.
James is the client, Sara is the agent, and Eric is the customer.
James is the agent, Sara is the customer, and Eric is the client.
Chris was recently hired by a homeowner to sell their single-family home. The homeowner wants to list the property for $649,000; however, Chris strongly believes the current market value is only $620,000. What should Chris present to the homeowner to justify his price?
Chris should prepare a comparative market analysis using recently sold properties in the area.
Chris should prepare an appraisal.
Chris should present print-outs of three similar properties currently on the market.
Chris should prepare a property survey.
John owns a small rental cottage in St Augustine and his mother Brenda lives nearby in a rented apartment. He is concerned about her having a secure home to live in after her retirement so he decides to convey the cottage to her for the rest of her life, after which, ownership will revert to him. What would John’s attorney probably have advised him to do to achieve these goals?
Establish a Trust with his mother as one of the trustees.
Convey a tenancy at sufferance to Brenda.
Convey a life estate to Brenda with the right of reversion to John.
Convey a tenancy by the entireties to Brenda, pur autre vie.
David is a licensed agent who typically represents homeowners looking to sell their house. As an agent, David has limited authority when working with clients, and his duties are limited to those outlined in the listing agreement. How would you characterize David’s agency relationship?
David is a general agent because he works with more than one client at a time.
David is a dual agent because he works with more than one seller at a time.
David is a universal agent because he signed a listing agreement with the seller.
David is a special agent since he is only responsible for one property at a time with limited duties.
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 must obtain the seller’s permission to do this in writing prior to following the buyer’s instructions.
The broker does not have the right to ever use an interest-bearing account under Florida Real Estate laws.
The broker must not transfer the interest into a non-interest bearing account before disbursement.
The broker is able to follow the buyer’s instructions without the seller’s permission.
To speed up the process of surveying, surveyors use brass metal plates to record important information. The benchmarks, as they are called, are used to save time so surveyors do not have measure the datum plane each time. Benchmarks refer to what standard of measurement?
Feet above sea level
Square yardage of a cube
Feet above the earth
Square footage of an acre
Neil recently obtained his Florida sales associates license. He then decides to open his own office and hire four sales associates to work under him. Neil and his four sales associates agree to split any commissions earned by the four associates 50/50. Has Neil violated any licensing laws?
Yes. Only licensed real estate brokers can open their own office and hire sales associates to work under them.
No. All of Neil’s actions are permitted under state law.
Yes. As a sales associate himself, Neil is only permitted to take up to 25% of the commissions earned from other sales associates.
No. If a sales associate runs their own office, they are permitted by law to hire up to four sales associates to work under them.
Brandon has been living in the same neighborhood for over 30 years. In recent years, he has seen a surge in population due to new corporate businesses setting up shop in town. The surge in population has also come with a surge in real estate prices. Why would this be the case?
As population increases, so does demand. An increase in demand leads to an increase in prices.
As population increases, demand decreases. A decrease in demand leads to an increase in prices.
As population increases, supply will also increase, which drives up prices.
As population increases, oil prices decrease, which leads to an increase in prices.
Marty is looking to enter into a listing contract with Jane. Jane is negotiating for an Exclusive Agency agreement, while Marty prefers an Exclusive Right to Sell agreement. Why would Marty prefer an Exclusive Right to Sell agreement over an Exclusive Agency agreement?
An Exclusive Right to Sell agreement will allow Marty to work less hours on the deal.
An Exclusive Right to Sell agreement will give Marty an extra 12 months to sell the property.
An Exclusive Right to Sell agreement offers Marty the most protection as he will be entitled to a commission regardless of who finds the buyer.
An Exclusive Right to Sell agreement will give Marty the highest commission possible.
Jessica’s house sells for $235,000 and she pays a 6% real estate commission to the listing broker, Oscar. Oscar keeps 55% and gives the co-operating broker the balance of the sales commission. If Harry, the listing broker’s agent, earns 65% of the commission that his broker receives, how much commission does Harry earn?
$5,689.25 (Dollars)
$9,165.00 (Dollars)
$4,124.25 (Dollars)
$5,040.75 (Dollars)
Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years ago for $480,000 and didn’t have any adjustments to factor in. If Aaron and Melissa sell their house for $700,000, how much will they have to pay in capital gains?
$0. The $500,000 capital gains exclusion will allow them to write off any profits earned on the property.
$220,000. All sellers have to pay capital gains on the sales price minus the price they originally paid.
$700,000. Married couples are required to pay capital gains on the final sales price.
$0. Capital gains is only paid on commercial properties.
A buyer bought a property without telling the seller or broker of his intended purpose for the property. The contract contained no contingency clauses and was properly signed and executed. He became very angry when he was unable to obtain the zoning for the commercial project he had planned and now wants to declare the contract null and void and get his money back. What is the status of the contract at this time?
This is a voidable, enforceable contract.
This is a valid, enforceable, executed contract.
This is a breach of contract since the buyer cannot use the property.
This is an implied, valid contract.
Phillip is a broker who was hired by Sam to help him find a new investment property. Phillip identifies a property that fits Sam’s investing criteria. Sam asks Phillip to do some research and provide him with an opinion of title on the property. Is Phillip permitted to do this?
No. Phillip needs his sales associates license in order to issue an opinion of title.
Yes. Brokers are always permitted to issue an opinion of title.
Yes. As long as Phillip notifies FREC, he can issue an opinion of title.
No. This would be considered an unauthorized practice of law.
Ken is an appraiser who was hired to appraise a single-family home. Ken’s subject property is similar to many of the houses in the neighborhood since much of the neighborhood was built around the same time. Why would the sales comparison approach be the most effective valuation method for Ken?
Residential properties are typically valued using the sales comparison approach, and Ken will most likely have several comparable properties to use to value the subject property.
Since the property has the potential to be rented out, the sales comparison approach should be used.
Since the cost to rebuild the property can easily be determined, the sales comparison approach should be used.
The cost approach should be used by Ken rather than the sales comparison approach.
Bill is the listing agent responsible for selling a single-family home. The house is in desperate need of repairs as it has been neglected for the last 12 years. In an effort to attract more buyers, Bill posts an advertisement online stating that the property is “move-in ready”. Has Bill violated any advertising guidelines?
Yes. Since the house is in bad shape, Bill is required to disclose the seller’s reasons for selling the property.
No. The property is not significantly misrepresented.
Yes. This is a misleading advertisement.
Yes. Bill must disclose any material facts about the property in an online advertisement.