WorksheetsReal Estate Practice Exam big test
Total questions: 75
Worksheet time: 38mins
Which of the following is not true concerning water rights?
Riparian rights are associated with land abutting a flowing waterway like a river or stream.
Littoral rights are associated with land abutting water that is nonflowing. Nonflowing water includes lakes, ponds, and oceans.
Riparian rights are held in common with other riparian owners and they may use it for fishing or boating but may not alter the flow of the water or contaminate the water.
Littoral rights are associated with land abutting a flowing waterway.
An unlicensed personal assistant may perform which activity?
Conduct listing presentations
Show property
Deposit earnest money in the escrow account
Negotiate the terms of a contract
What is the continuing education requirement of a sales associate after the licensee has completed the post-licensing education requirement during the initial license period?
Only active licensees are required to complete at least 14 hours of continuing education during every two-year license period.
Active licensees and inactive licensees are required to complete at least 14 hours of continuing education during every two-year license period.
Active licensees are required to complete 3 hours of additional core law if they wish to become brokers.
Licensees do not have continuing education once they complete the required post-licensing education.
How is a sales associate’s commission rate with the brokerage determined?
A sales associate’s commission is determined with a negotiation between the buyer and the seller.
A sales associate’s commission is determined with a negotiation between the sales associate and the broker.
A sales associate’s commission is a set rate in Florida.
A sales associate’s commission is determined with a negotiation between the seller and the sales associate.
How is the binder deposit shown on the Closing Disclosure Form?
Credit to the buyer, debit to the seller
Credit to the seller
Credit to the buyer
Debit to the buyer, credit to the seller
What is the status of a sales associates’ license if he/she does not complete the required post licensing education prior to his/her first renewal cycle?
Involuntary inactive
Inactive
Suspended
Null and Void
How are commission rates determined when a broker lists a seller’s property?
The standard commission rate for the state of Florida is 6%.
Commission rates are arrived at by a negotiation between the sales associate and the seller.
Commission rates are determined by the FREC, (Florida Real Estate Commission).
Commission rates are arrived at by a negotiation between the broker and the seller.
Which of the following is a list of the required elements to make a contract valid?
in writing, recorded, acknowledged, and signed
in writing, recorded, offer and acceptance, legal
competent parties, in writing, offer and acceptance, legal, consideration
competent parties, offer and acceptance, legal, consideration
The purchase price of a property is $500,000. The buyer’s financials are as follows: The buyer put $50,000 in escrow. The buyer has $50,000 of his own money. The buyer is assuming the seller’s mortgage of $85,000. The buyer is acquiring a new mortgage of $225,000. The buyer has decided to ask the seller to take back a mortgage. How much would the mortgage be if the seller takes back a purchase money mortgage from the buyer?
$500,000
$85,000
$225,000
$90,000
A licensed real estate sales associate conducted an appraisal for a fee. The FREC found the licensee to be in violation of the Uniform Standards of Professional Appraisal Practice. Which statement is true?
Real estate licensees are not required to abide by the USPAP and in this situation the sales associate would charge a commission for the appraisal, not a fee.
The licensee is subject to FREC discipline.
Only the Appraisal Board can impose a penalty in this case-the FREC does not have authority over appraisal matters.
Real estate sales associates may not conduct appraisals for a fee unless they are also certified or licensed real estate appraisers.
Which mortgage clause allows the mortgagee the right to demand the outstanding loan balance plus accrued interest in the event that the borrower sells or transfers any interest in the property without the lenders prior written consent?
Due-on-sale Clause
Escape clause
Acceleration clause
Estoppel clause
Which of these describes of a non-freehold estate that includes a definite specified amount of time?
Tenancy at will
Estate by the entireties
Life estate
Estate for years
Which of the following is a set of administrative rules developed by The Florida Real Estate Commission?
Chapter 621j
F.S. 120
Chapter 61j2
F.S. 475
The Federal Reserve, or the “Fed” is the central bank of the United States. Which of the following statements is false about the “Fed”?
The Fed conducts the nation’s monetary policy.
The Fed, by implementing their tools, affect the cost of credit. Affecting the cost of credit is another way to say set interest rates.
The Fed maintains the stability of the financial system.
The Fed is a system of determining commission rates between a broker and a seller.
How many points would a buyer need to purchase to equal an increase in the lender’s yield of 1%?
2 points
4 points
6 points
8 points
Which of the following is incorrect regarding property built before January 1st, 1978?
Property built before January 1st, 1978, may contain lead in the paint. Therefore, four actions must be taken by the seller: First, if the seller is aware of the lead in the paint, the seller must disclose this fact. Second, the seller must give the buyer a disclosure concerning the dangers of lead-based paint. Third, the seller must give the buyer an EPA prepared pamphlet. Fourth, the seller must allow the buyer a 10-day period to inspect for lead in the paint.
The buyer must acknowledge that he/she has received the disclosures regarding the dangers of lead-based paint.
The buyer is not required to inspect the property for lead in the paint.
The seller’s agent is responsible for delivering the lead-based paint disclosures to the buyer.
Three close friends own a nursery as joint tenants with right of survivorship. One owner died unexpectedly. Who owns the nursery?
If the deceased owner was married at the time of death, the deceased’s interest in the nursery will descend to the surviving spouses.
The surviving owners will have to wait until the deceased owner’s estate is probated before taking ownership of the nursery.
The two owners remaining become the only owners of the nursery.
The two owners remaining along with the deceased owner’s heirs, own the nursery.
The subject property is a three-bedroom, two-bath home with no garage. A comparable property is a three-bedroom, two-bath home with a garage. An appraiser has determined that the garage is worth $5,000. What adjustment should the appraiser make?
Subtract $5,000 from the estimated value of the subject property.
Subtract $5,000 from the comparable’s transaction price.
Add $5,000 to the comparable’s transaction price.
Add $5,000 to the estimated value of the subject property.
Which of the following is incorrect concerning FHA and VA mortgages?
FHA and VA mortgages are government backed loans and therefore assumable.
If the spouse of a deceased veteran remarries, he or she is not eligible to use the VA benefit.
VA is a government guaranteed loan and could be accompanied by a funding fee.
VA is a government insured loan and could be accompanied by an origination fee.
Which of the following liens would take priority?
A vendor’s lien filed on December 12th 2017
A mechanic’s lien filed on January 1st 2018
Property tax lien filed on January 14th 2018
A special assessment tax filed on January 13th 2018
How is the intangible tax typically noted on the Closing Disclosure Statement?
Debit to the seller, credit to the buyer
Seller debit only
Buyer debit only
Credit to the seller, debit to the buyer
Which applies if a licensee calls a broker’s price opinion an appraisal?
The licensee could be charged a third-degree felony.
The licensee could be charged with breach of trust.
The licensee could be punished by The Florida Real Estate Commission.
The licensee could be charged with a notice of non-compliance.
In which theory in mortgage lending does the borrower retain ownership during the loan period?
Lien theory
Title theory
Mortgage theory
Law theory
Which of the following describes an option contract?
A bilateral contract to keep open for a specified period of time an offer to sell or lease real property.
A unilateral contract to keep open for a specified period of time an offer to sell or lease real property.
A unilateral contract that is not required to be in writing to be enforceable.
A bilateral contract that is not required to be in writing to be enforceable.
Who is responsible to deliver the HOA, (Home-Owner’s Association) disclosure document to the buyer?
The seller/owner
The seller’s agent
They buyer
The buyer’s agent
When must the no brokerage or the non-representation disclosure form be shown?
Before entering into a listing agreement
Before or at the time of becoming a single agent
Before showing property
At the open house
Which of the following is true concerning taking listing contracts when a licensee leaves a brokerage?
If a sales associate takes original listing contracts, he could be charged with Larceny. If a sales associate takes duplicates of listing contracts, he could be charged with breach of trust.
If a sales associate takes originals or copies, he could be charged with a first-degree misdemeanor.
If a sales associate takes original listing contracts, he could be charged with a third-degree felony.
If a sales associate takes original listing contracts, he could be charged with a first-degree misdemeanor. If a sales associate takes copies of listing contracts, he could be charged with a notice of noncompliance.
In the event that a broker chooses not to have an escrow account, the funds are typically held a title company or in an attorneys escrow account. If the funds are held at a title company or in an attorney’s escrow account, what must be included on the purchase and sale contract regarding the title company or attorney?
Name, address, email and phone number of the title company or attorney.
Name and phone number of the title company or attorney.
Name, address, and phone number of the title company or attorney.
Name, address, email, phone number and account number of the escrow account.
Which applies if the potential tenant makes the request within 30 days for a refund after being unable to obtain a rental?
If the potential tenant makes the request within 30 days, the licensee would be required to provide a full refund of the $700.00.
Because the potential tenant did not locate and obtain a rental, the licensee is not required to refund any portion of the fee paid.
The request must be in writing and within 30 days in order for the potential tenant to obtain a refund.
If the potential tenant makes the request within 30 days, the licensee would be required to provide a refund of $525.00.
Which of the following clauses or covenants in a deed states that the grantor owns the property and has the right to convey it?
Seisin
Covenant against encumbrances
Habendum clause
Premises clause
What kind of listing is used when the seller requires a specific amount of money from the transaction in order to list with a brokerage?
Exclusive listing with right of sale listing
Net listing
Exclusive agency listing
Open listing
When must a broker deposit funds into the escrow account?
10 days
5 days
Immediately
1 day
Which expenses associated with a principal residence are deductible for income tax purposes?
Depreciation and points
Operating expenses and maintenance costs
Property taxes, mortgage interest, points, and mortgage loan origination fees
Mortgage payments, property taxes, and mortgage loan origination fees, and points
Which type of easement would be created if the water company had the right to dig up an owner’s property to install a water pipe?
Appurtenant
Necessity
Prescription
In gross
What is the penalty for a first-time minor violation and how many days does a licensee have to correct the violation?
3rd degree felony/15 days
3rd degree felony/30 days
Notice of non-compliance/15 days
Notice of non-compliance/30 days
What is the opposite of NW 90 degrees S?
NW 180 degrees S
NW 90 degrees N
SE 90 degrees N
SE 180 degrees N
In the metes-and-bounds method of describing property which statement is true?
Metes refers to distance and bounds refers to direction
Metes refers to direction and bounds refers to distance
A surveyor would typically use the metes-and-bounds method to describe property in a subdivision.
The metes-and bounds method breaks the state up into a checkerboard grid.
How do you find the capitalization rate of a property if you have the net operating income and the value, (sales price)?
Net operating income divided by the value, (sales price)
Net operating income divided by the capitalization rate
The capitalization rate multiplied by the value, (sales price)
Net operating income multiplied by the value, (sales price)
When individual parcels are released on a blanket mortgage loan, what type of clause is used?
Escape clause also called a partial escape clause
Partial release clause also called a release clause
Estoppel clause
Mortgage clause
Which of the following statements is correct about the components of an adjustable-rate mortgage?
The margin, the index, and the variable are the three components of an adjustable-rate mortgage.
The index and the margin are the two components of an adjustable-rate mortgage, and the index is the economic indicator that adjusts the rate.
The index and the margin are the two components of an adjustable-rate mortgage, and the margin is the economic indicator that adjusts the rate.
With an adjustable-rate mortgage, the index never changes for the term of the loan.
When there are less houses on the market than prospective buyers, what type of market is created?
Seller’s market
Buyer’s market
Even market
Buyer’s and seller’s market
If a real estate agent was charged with a first-degree misdemeanor, what law were they breaking?
Performing services of real estate without an active license
Advertising real estate without an active license
Violating rental list laws
Taking copies when they left their brokerage
How do you find the value of a property, (sales price) if you have been given the capitalization rate and the net operating income?
The formula is the capitalization rate multiplied by the rental income
The formula is the net operating income multiplied by the capitalization rate
The formula is the net operating income divided by the capitalization rate
The formula is the capitalization rate minus the net operating income
The FHA and VA
are nonconventional loans that are backed by the federal government.
have a prepayment penalty.
are not assumable.
are conventional loans that are backed by the federal government.
Which entity may register as a real estate brokerage?
Business trust
Joint venture
Corporation sole
Limited liability corporation
Which of the following is a list of everything that is required to be included on a brokerage office sign?
The word REALTOR, the address of the brokerage, and the phone number of the brokerage.
The word REALTOR, the trade name of the brokerage if one is used, and the broker’s name.
The trade name of the brokerage if one is used, the broker’s name, and the words licensed real estate broker.
The trade name of the brokerage if one is used, the broker’s name, the words licensed real estate broker, and the address of the brokerage.
What is true about the members of the FREC?
The members of the FREC have three powers available to them: the executive power, the quasi-legislative power, and the quasi-administrative power.
There are seven members of the FREC. Two are brokers, two are sales associates, and three are consumers.
There are seven members of the FREC. Four are brokers that have been brokers for at least five years, one is any of the three types of licensee, and two are lawyers that have been lawyers for at least 5 years.
There are seven members of the FREC. Four are brokers that have been brokers for at least five years, one is any of the three types of licensee, and two are consumers also called civilians or laymen.
Tim, who holds title in fee simple, deeds land to Simon to enjoy until his death. At that time Bob is to receive title to the land. Bob’s interest in the land is known as a (an)
Fee simple estate
Life estate
Remainder estate
Estate for years
What is the maximum amount of time that The Florida Real Estate Commission can suspend a licensee’s license?
6 months
30 days
2 years
10 years
Which of the following lists contain contracts that a licensed broker is legally permitted to prepare?
Mortgages, listing contracts, deeds
Listing contracts, buyer brokerage agreements, and deeds
Listing contracts, buyer brokerage agreements, and option contracts
Listing contracts, deeds, mortgages, leases
An offer is not terminated by
a counteroffer.
rejection.
withdrawal by offeror.
an extension.
Which of the following contains the right of survivorship?
Joint tenancy and estate by the entireties
Only joint tenancy
Estate for years and tenancy in common
Only tenancy in common
Using the entry or rumor of the entry of a protected class into the neighborhood to induce a homeowner to list their property is called
redlining.
steering.
blockbusting.
grouping.
Concerning escrow disputes which applies?
In the event of conflicting demands for escrow, the broker must first contact FREC within 30 business days, then implement one of the four settlement procedures within 15 business days.
When an escrow dispute arises, the broker must first mediate the matter.
In the event of conflicting demands for escrow, the broker must first contact FREC within 15 business day, and then request an Escrow Disbursement Order
In the event of conflicting demands for escrow, the broker must first contact FREC within 15 business days, and then implement one of the four settlement procedures within 30 business days.
In the event that a sales associate’s broker dies, resigns, or is unexpectedly removed from the office, what is the status of the sales associate’s license?
Void
Involuntary inactive
Suspended
Current
Three individuals purchase a property with no right of survivorship. Their estate is referred to as a
joint tenancy.
leasehold estate.
tenancy in common.
tenancy at will.
An appraiser would deduct value from a property’s value if the property had four bedrooms but only one bathroom. What type of depreciation is this?
External obsolescence
Valuation profit
Physical deterioration
Functional obsolescence
Which of the following statements is false regarding the types of notice of ownership?
Constructive notice is provided by recording documents in the public records.
Actual notice can be provided by physical possession.
Constructive notice is acquired during the course of the transaction.
Constructive notice is also called legal notice.
Two friends have purchased a property and have decided to build an apartment complex on the property. What type of ownership would be most advantageous for the families of the friends in the event of the friends’ passing?
Tenancy in common
Tenancy at will
Estate by the entireties
Joint tenancy
Which of the following is an example of external obsolescence?
A sink hole in the back yard
A shopping center opening up near by
A tree’s root system messed up the front sidewalk
The road in front of the house became a throughfare
Which of the following is false concerning freehold and non-freehold estates?
When title is held in a life estate and the person dies, if the title will revert (return) to the original grantor (previous owner), an estate in reversion (reversion estate) is created.
When title is held in a life estate and the person dies, if the title will be conveyed to a third party, called a remainderman, the remainderman owns a remainder estate while the life estate exists.
A life estate is a type of freehold estate that can be created by the person who holds the fee simple title to real property.
A life estate is a type of non-freehold estate where the ownership is limited to the lifetime of the owner of the life estate.
A broker executed a listing contract to sell a customer’s property for $275,000. The homeowner was on vacation when an offer comes in for $275,000. Which applies in this situation?
Because the offer was a full price offer, the broker is authorized to verbally commit to the offer.
The broker may accept the offer on the behalf of his customer as long as the broker gets the signature from the seller immediately upon their return.
The broker will have to wait until the homeowner returns from vacation because the broker does not have the authority to accept offers.
The broker may accept the offer provided it was an exclusive-right-of-sale-listing contract that was executed.
The seller instructs the listing broker not to show his home to members of a protected class. The broker informs the seller that this is a violation of fair housing laws, but the seller is insistent. Which choice is the broker’s best course of action under these circumstances?
Report the incident to the Fair Housing Administration
Report the seller to the DBPR
Withdraw from the listing agreement
Follow the seller’s instructions because to do otherwise would violate the broker’s fiduciary duties to the seller
Which of the following is false concerning a mortgage loan?
Negative amortization occurs when the mortgage payments are not large enough to cover the interest expense. The result is the mortgage loan balance increases instead of decreasing.
On a 30-year, fixed-rate mortgage, the payments during the first years are used almost entirely to pay principle.
An amortized mortgage is gradually and systematically killed or extinguished by equal regular periodic payments.
With a partially amortized mortgage, the buyer makes regular payments smaller than what is required to completely pay off the loan by its date of termination and at the end of the loan period a balloon payment is required.
In which of the following transactions is the individual not exempt from licensure?
A salaried manager of a condominium that rents condominium units for no longer than one year and does not receive compensation based on transactions.
A property owner that sells their property.
A tenant that receives a fee of up to $50 for the referral of a new tenant to the same apartment community that they live in.
An attorney-at-law that is acting within the scope of their professional duties and charges commission for referring commercial clients to a broker.
Which of the following statements is true concerning the Closing Disclosure form?
The Closing Disclosure can only be completed by a lender, the title company, or the broker.
On the Closing Disclosure, rental income is noted as a debit to the buyer and a credit to the seller.
On the Closing Disclosure, the intangible tax is noted as a debit to the buyer.
All mortgages are a debit to the buyer on the Closing Disclosure.
Which of the following is false concerning Freddie Mac?
Freddie Mac is a contributor in the secondary mortgage market and stands for Federal Home Loan Mortgage Corporation, or FHLMC.
Freddie Mac operates in the primary mortgage market under federal government conservatorship and provides a secondary market for conventional mortgage loans originated by savings associations.
Freddie Mac is similar to Fannie Mae because both of these entities operates in the secondary mortgage market.
Freddie Mac purchases conventional mortgage loans.
Which of the following approaches to estimating real property value would an appraiser use to appraise a courthouse?
The sales comparison approach
The cost approach
The income capitalization approach
The appraiser would analyze the property and then make a determination on which approach was the most appropriate.
A broker acquired a new customer and listed the customer’s property on the MLS. The broker found a prospective buyer for the property but suddenly became ill. The broker was hospitalized for two months. During the hospitalization of the broker, the prospective buyer purchased the property. Which applies to this situation?
If the broker listed the property with an open listing the broker is not entitled to the commission because the broker was not present during the transaction.
The broker is entitled to a commission regardless of the type of listing he had with the customer.
The broker is entitled to a commission provided the listing was an exclusive listing with right of sale.
The broker is not entitled to a commission.
Which of the following is false concerning escrow accounts?
If a broker in Florida decides to hold escrow, the account must be located in Florida.
A Florida broker is not required to hold escrow. If the broker does hold escrow and the escrow account is an interest-bearing account, all parties must give written authorization.
It is legal for a broker to keep earned interest from the escrow account, if all parties have given written authorization.
A Florida broker is authorized to move the escrow account from a non-interest-bearing account to an interest-bearing account provided he receives written authorization from one party.
When a lender declares all the unpaid balance due and payable as a result of default, the lender is exercising which clause in a mortgage?
Due-on-sale clause
Escape clause
Acceleration clause
Estoppel clause
Which of the following statements concerning market value is true?
Market value is the most probable price a property should bring in a competitive and open market under all conditions, requisite to a fair sale under certain guidelines published by Fannie Mae and Freddie Mac.
Market value is the same as price.
Market value is the value an investor would typically pay.
Market value is the same as the cost of the property.
A valid real estate contract
has been recorded.
has been acknowledged.
contains all the essential elements and is in writing.
contains all the essential elements and is not required to be in writing.
Which of the following is true regarding the Statute of Frauds and the Statute of Limitations?
The Statute of Frauds requires that contracts conveying an interest in real property and all contracts that are not performed within one year from the date they become effective must be in writing and signed to be enforceable.
The Statute of Limitations on a written contract is 4 years.
The Statute of Limitations is the period of time set by statute during which the terms of a contract may be enforced. The Statute of Limitations on a parol contract is 5 years.
The Statute of Frauds requires that all contracts must be in writing and signed to be enforceable.
Which statement is false concerning the payment of an unearned fee or kickback?
Broker Smith and sales associate Sabrina can legally share a portion of their commission with the buyer or seller in the transaction provided all parties are informed.
Not all kickbacks are illegal.
A real estate licensee may be paid a fee for referring clients.
