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157 Real Estate Final Exam Questions
What are the maximum aggregate payment from the Recovery Fund for multiple claims against a single licenseeis? - ✔ ✔ $150,
With regards to the 2003 changes to the Florida Statutes, which of the following limitations has been placed on FREC in the collection of fees for the Recovery Fund? FREC can assess fees - ✔ ✔ until the Recovery Fund reaches $ million.
A sales associate decides to sell his own property without using a broker. Which of the following is TRUE regarding any advertising the sales associate may wish to do? - ✔ ✔ The sales associate must disclose the fact that he is a real estate licensee.
Which of the following is considered a material fact that MUST be disclosed per the Florida statutes? - ✔ ✔ While the owner was restaining his deck, the staircase crumbled due to termite activity.
With regards to appraisal services, which of the following holds TRUE? - ✔ ✔ The law allows brokers and sales associates to provide valuation services for compensation as long as they do not represent themselves as appraisers.
A real estate licensee is acting as a transaction broker facilitating the sale of a commercial building. Which of the
following is correct regarding transaction brokerage in Florida? - ✔ ✔ Neither party is required to sign the broker disclosure notice if the broker is acting as a transaction broker.
A real estate licensee has a buyer agency agreement. What is the seller in this situation? - ✔ ✔ A customer.
On a $500,000 loan the borrower is required to pay two points. How much does the borrower have to pay the lender? - ✔ ✔ $510,000.
The discount points charged by a lender on a federal VA or FHA loan are a percentage of the - ✔ ✔ loan amount.
An increase in the availability of money would lead to which effect? - ✔ ✔ Interest rates would go down.
When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called - ✔ ✔ a balloon payment.
In an installment land contract, what type of title did the seller retain? - ✔ ✔ Legal
Which of the following is true of a second mortgage? - ✔ ✔ It is usually issued at a higher rate of interest.
Usury MOST nearly means - ✔ ✔ illegal interest.
A borrower bought a $174,000 house with no down payment. The loan was probably - ✔ ✔ a VA loan.
Broker Carr represents the Seller and Broker Smith represents the Buyer.
A buyer bought a property without telling the seller of his intended purpose for the property. The contract contains no contingency clauses and it is a properly executed contract. After the closing, the buyer is unable to obtain the zoning he needs for his commercial project. What is the contract at this stage? - ✔ ✔ Enforceable
- The seller and the buyer finally agreed to a purchase price of $203,500 with the closing to occur on June 15. The taxes for the year in the amount of $2,500 have not been paid by the seller. (Taxes are paid in arrears). How much would the tax proration amount to, and how would it appear on a full settlement statement? Base your answer on a 365 day year, and the buyer is responsible for the day of settlement. - ✔ ✔ $1,130.14 debit the seller and credit the buyer
A seller listed his home for six months on February 26. On April 29, a buyer made an offer on the property. The listing broker presented the offer to the seller on April 30. The seller accepted the offer on May 1, with the closing to occur on June 15. Assuming the closing took place on June 15, when did the listing expire? - ✔ ✔ 6/
The sellers listed their property for six months on February 26 for $522,500. They agreed to pay the listing broker a 7% commission at closing on the agreed upon sale price. A
buyer made an offer on the property on March 29 for $510,000. The seller countered the offer on April 1 at $517,500, and the buyer accepted the counter offer with the closing to occur on June 15. How much commission did the seller owe the listing broker, and how would it appear on the settlement statement? - ✔ ✔ $36,225. Debit the seller.
The seller and the buyer agreed to a purchase price of $270,000 with the closing to occur on June 15. The seller's loan balance after the June 1 payment was $170,000. with an interest rate of 6%.The monthly payment was $1, principal and interest. What was the loan balance the day of closing, and how much interest did the seller owe the bank? - ✔ ✔ Loan balance $170,000; interest due $
The buyer and seller agreed to a purchase price of $310,500. The buyer received an 80% loan. How much was the buyer's loan and how did it appear on the settlement statement? - ✔ ✔ $ 248,400. Credit the buyer only.
A home improvement company was negotiating with a homeowner to add on two rooms to a home. The company agreed to take a second mortgage as long as the homeowner also included the rest of the property in the loan. The company and the homeowner agreed to a price and the company provided the necessary disclosure form on Monday and the homeowner signed the agreement at noon the following day. Assuming that the week had five business days, until what time could the homeowner rescind
An impound or reserve account MOST benefits whom? - ✔ ✔ The lender
What are impound or reserve accounts also known as? - ✔ ✔ Escrow accounts
The HUD-1 form is - ✔ ✔ a statement of actual charges
and adjustments.
A VA loan may be granted for the purchase of a one-family to four-family property if - ✔ ✔ the veteran agrees to live
there.
Which of the following would usually occur in a sale-and- leaseback transaction? - ✔ ✔ The property is sold on the condition that the new owner lease it back to the seller at the time title passes.
A standardized yardstick expressing the true annual cost of borrowing is expressed as the what? - ✔ ✔ APR
RESPA would prohibit which of the following acts? - ✔ ✔ A: paying of kickbacks
Illumination:
RESPA concerns itself only with educating consumers about the true costs of borrowing and standardizing lending practices. As such, referral "fees" are prohibited.
In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain the property. What is this right called? - ✔ ✔ Statutory right of redemption
The lender is required, under RESPA, to provide a detailed "Good Faith Estimate (GFE)" statement at the time of loan application or within three business days to - ✔ ✔ the buyer.
In which of the following markets may a lender sell a loan that a mortgage banker has previously originated? - ✔ ✔ Secondary market
Though 30 year loans are more common, 15 year loans are considered standard, conventional loans. - ✔ ✔ Yes.
Under an FHA graduated payment mortgage, which of the following fluctuates over the term of the loan? - ✔ ✔ Monthly payments
Who are graduated payment mortgages aimed to> - ✔ ✔ Particularly at young families who expect to see their earnings rise over the next five to ten years.
The maximum permissible "loan to value ratios" are - ✔ ✔ based on sale price or appraised value, whichever is lower.
Are there any state-mandated qualifying requirements for conventional loans? - ✔ ✔ No, Not only are guidelines not uniform, qualification standards can vary enormously from lender to lender.
When the lender under a deed of trust requires title insurance, who would be the most likely person to pay for it?
Trustor is another name for? - ✔ ✔ Borrower
The Pickets are purchasing a home for $780,000 and the lender is giving them a 90% loan at 5% interest, plus a 2% loan origination fee. How much is the loan origination fee? - ✔ ✔ $14,
Discrimination is prohibited in lending practices under - ✔ ✔ ECOA
A buyer assumes the mortgage. How is the owner relieved of the liability? - ✔ ✔ Novation
Which type of loan will result in the largest reduction of the principal balance most quickly? - ✔ ✔ 6% over 15 years
Who is the largest purchaser in the secondary market? - ✔ ✔ Fannie Mae
What does Fannie Mae stand for? - ✔ ✔ Federal National Mortgage Association
Which transaction requires a securities license? - ✔ ✔ Selling shares in Fannie Mae
Who is NOT an originator of primary loans? - ✔ ✔ FHA
A buyer wanted to use a promissory note for consideration on the purchase of a property. Can he do this? - ✔ ✔ Yes. This is acceptable as long as the seller agrees.
If advertised alone, which would be in violation of Truth in Lending? - ✔ ✔ "No down payment required."
Why would a mortgagee have an appraisal on the property? - ✔ ✔ To assure the property value is sufficient to cover the loan
Seller Jolita lists her house with Broker Fred. Fred then buys Jolita's house and collects the agreed-upon commission. This is an example of - ✔ ✔ self-dealing.
An owner was selling his own home. Can he advertise the down payment? - ✔ ✔ Yes, because it was his own home.
Which is true about restrictive covenants? - ✔ ✔ They are
placed by private parties in a deed.
Looking at shopping centers in the appraisal process, the social fiber of the community and distances from schools is called - ✔ ✔ neighborhood analysis.
Which best describes why a buyer purchases a home using the market data approach? - ✔ ✔ Buyers buy after they compare the house with others.
How many feet in one yard? - ✔ ✔ 3 feet in one yard
A real estate agent should tell the buyer, his customer, which of the following? - ✔ ✔ A pending or recent zoning change
A square is 1/8 of a mile by 1/8 of a mile. How many acres is this? - ✔ ✔ 10 acres
One-eighth of a mile square is the same as 10 acres. Multiply 1/8 X 1/8 = 1/64 divided into 640 acres = 10 acres
The first step in an appraisal is - ✔ ✔ to Define the problem
A recorded subdivision plat is used in the - ✔ ✔ lot and block system.
An appraiser is usually paid - ✔ ✔ a fee based on the
amount of time and effort.
The primary survey line running north and south in the rectangular survey system is the - ✔ ✔ principal meridian.
The zoning commission of Jefferson County requires that all new construction in a specific area adhere to a specific type of architecture. What type of zoning is this? - ✔ ✔ Aesthetic
The appraisal approach most likely to be used in valuing a public library building would be - ✔ ✔ cost.
Physical deterioration is considered curable whenever - ✔ ✔ it costs less to correct than the resulting value increase.
The economic life of an investment can be described as - ✔ ✔ the time over which value generated exceeds cost of operation.
When an appraiser correlates the three approaches into a final estimate, he - ✔ ✔ reconciles the differences according to the type of property being appraised and the quantity and quality of data available.
Apartment houses in an area were selling for $100,000 and a buyer offered $100,000 for an apartment building. The buyer is operating on the principle of - ✔ ✔ substitution.
A feature found in a comparable property that is not present in the subject property will result in - ✔ ✔ a reduction adjustment to the comparable's selling price.
Can brokers provide Legal Advice? - ✔ ✔ No, Brokers should not provide legal advice unless they are also a lawyer.
When an appraiser uses the phrase "effective age," he is referring to - ✔ ✔ the age of the property based upon its
condition.
The Adams family purchased the largest and most expensive house in a new subdivision. Five years later, when they were ready to move, they discovered the monetary value of the home had gone up proportionately less than the other houses in the neighborhood. This phenomenon is an example of the principle of - ✔ ✔ regression.
With how many states does Florida have a reciprocal, or mutual recognition agreement with? - ✔ ✔ 8 states
- Name the 8 states that Florida has a reciprocal, or mutual recognition agreement with? - ✔ ✔ Alabama, Arkansas, Connecticut, Georgia, Indiana, Mississippi, Nebraska and Oklahoma.
At age 18, Leslie is considering what to do when she graduates from high school in 9 months. Can she begin taking prelicense coursework during her final year of high school? - ✔ ✔ Yes, but she cannot be licensed until she receives her high school diploma.
- What must a listing agreement include? - ✔ ✔ a definite expiration date, include a description of the property, and specify the fee or commission.
After a long dispute with a bankrupt and corrupt Florida broker, the Gonzalez family was awarded a judgment for $12,500 in actual damages and $87,500 in punitive damages, for a total of $100,000. They were then surprised find that the Real Estate Recovery Fund would not cover all $100,000. Which of the following is TRUE? - ✔ ✔ The Real Estate Recovery Fund is expressly limited to only actual, not punitive damages. Therefore only $12,500 would be available for recovery in this case.
Ralph is a sales person with Sunlight Real Estate Brokers and when he shows his client Ben a property listed by Xavier
Realty, Ben decides to make an offer on the property. Ralph notices that Ben has written the earnest money deposit check to be made payable to the wrong name. Which of the following statements accurately describes the error and ideal corrective action? - ✔ ✔ Because Ben wrote the check payable to Ralph, Ralph should return the check to Ben and request he make out a new check.
Marhall has a court order against a bankrupt broker for $75,000 in damages caused by the broker's misconduct. How much will Marshall receive from the Recovery Fund? - ✔ ✔ $50,
Alejandro is a salesperson at Rococo Real Estate Brokerage in Pensacola. While visiting his daughter in Daytona, Alejandro sees a property offered by Daytona Diligent Realty which he proceeds to sell to a client back in Pensacola. Alejandro receives 5% commission from Daytona Diligent Realty. Is there anything wrong with this situation, and if so, what is the key legal condition? - ✔ ✔ Yes, Alejandro and Daytona Diligent Realty are in violation of Florida's real estate license law.***** (Alejandro may only be compensated by his broker, Rococo Real Estate, so any offer of commission or fee made directly by Daytona Diligent Realty must be refused. Both parties are in violation of Florida's real estate license law.)
What type of Acts were developed to make laws aimed at controlling zoning and property use? - ✔ ✔ Enabling Acts
John has been farming his land in Florida for nearly 22 years. His principal crops are cabbage and oranges. He also raises pigs and horses for sale on his 280-acre property. He has consistently used conservation methods and fertilizing to maintain the value of the land. He has also reforested where possible on his property. He is currently seeking some tax relief. Is he likely to get relief? - ✔ ✔ Yes, because his property falls under the Florida Green Belt Law.
***What is the Florida Green Belt Law? - ✔ ✔ This taxes agricultural land at a lower rate than the encroaching cities around the land, and preserves the land for future agricultural use.
Wilma accepted an offer on her home from a buyer who provided a $3,500 earnest money deposit, but thereafter neither she nor her broker heard from the buyer. What is the most accurate way the broker should handle this situation and the $3,500? - ✔ ✔ The broker must notify the Commission within 15 business days that he has a good-faith doubt.
Moe relocated from Brooklyn to Florida, qualified for a Florida broker's license and opened a small office in Palm Beach. His family back in Brooklyn say he should open an office in Brooklyn too. Could Moe do this legally? - ✔ ✔ Yes, there is no law that prohibits a broker in Florida from having an office out of state as long as all of his escrow funds are held in trust by a Florida bank or credit union.
Lane, a broker, listed a small cottage near the causeway at $250,000, but the seller finally had to accept an offer of only $230,000. When Lane met with the parties, both the buyer and her client asked her to prepare a second contract in the amount of $250,000 "so the mortgage company will give us a higher loan." Is there anything wrong with Lane following his client's and the buyer's wishes? - ✔ ✔ Yes, it is illegal to enter into a dual contract for the purpose of securing a larger loan.
If the board determines a proposed site does not conform with existing land use plans and zoning ordinances, what steps may the board take? - ✔ ✔ Authorize a variance to the land use plan and zoning ordinances to bring the proposed site into line with the existing local land use plans and zoning ordinances.
Broker Marge was swamped, and asked Jilly and Kelly to help with 1 of her clients. Jilly is a non-licensed secretary and Kelly is a real estate licensee working in a non- representative role with the seller. Who could help Marge and provide the seller with a comparative market analysis (CMA)? - ✔ ✔ Kelly could. There is no restriction to prevent a licensee from preparing a CMA for a buyer or seller.
Eve and her husband Adrian have homesteaded property. Adrian owns investment real estate in severalty and has expressed his desire that his investment property would go to his friend Rex. When Adrian dies testate, which of the
