AYPO REAL ESTATE FINAL EXAM 3 CURRENTLY TESTING VERSIONS WITH A STUDY GUIDE, Exams of Nursing

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AYPO REAL ESTATE FINAL EXAM 3 CURRENTLY TESTING

VERSIONS WITH A STUDY GUIDE | ACCURATE REAL EXAM

QUESTIONS AND ANSWERS WITH RATIONALES | EXPERT

VERIFIED FOR GUARANTEED PASS

To comply with the statute of frauds, an option contract must be ______.

a. In writing and signed by the optionee b. In writing and signed by the optionor c. In writing and witnessed by an attorney d. On file at the local courthouse

b. To comply with the statute of frauds, an option contract must be in writing and signed by the optionor (seller).

A cooperative is a(n) _____.

a. limited partnership b. LLC c. not-for-profit corporation d. sole proprietorship

c. A cooperative is a joint venture with its shareholders, formed for their benefit and governed by them. It's a not-for-profit corporation.

Compared with condominiums, the monthly fees for a cooperative owner are typically ______.

a. Higher b. Much less c. Slightly less d. The same

a. Monthly fees for cooperatives are generally higher because they include taxes, mortgage payments, and fees for maintaining common areas and facilities.

For all intents and purposes, subagents are agents of the _______.

a. Buyer b. Seller c. The buyer's broker d. The listing broker

b. Although a subagent may bring an unrepresented buyer to the transaction, the subagent is an agent of the seller.

Can a new licensee specialize in the sale of farm and ranch property?

a. Not until the licensee has at least five years of experience in agricultural real estate b. Not until the licensee passes additional courses in agricultural real estate c. Yes, a new licensee can specialize in agricultural real estate d. Yes, as long as the new licensee has a degree in agriculture

c. Specialization doesn't require additional coursework or credentials. The licensee must be competent in any specialization, however.

Jacqueline is a licensee working with a property near a Superfund site. Which of these statements is true?

a. A portion of the sale price must go to the EPA to fund clean-up of the site. b. She must disclose potential health threats to anyone in the area when showing the property. c. She must disclose the existence of an environmental hazard in the area. d. The property can't be sold until the site is removed from the NPL.

c. A property with a known Superfund site in the vicinity requires disclosure, as this is a material fact.

Curtis wants to do a 1031 exchange. He just closed on his property. How many days does he have to identify a new property?

a. 180 b. 30 c. 45 d. 60

c. Investors who want to use the 1031 tax-deferred exchange must identify the new property within 45 days of closing and must close on that property within 180 days from the date of sale of the first property.

Which option describes a real property tax lien?

a. General and involuntary b. General and voluntary c. Specific and involuntary d. Specific and voluntary

c.

A buyer representation agreement establishes an agency relationship between which parties?

a. Buyer and broker b. Buyer and salesperson c. Seller and broker d. Seller and salesperson

a. You may hear a buyer representation agreement called the buyer/broker agreement. This is a contract between the buyer and the broker. Remember, all real estate activities are conducted under the broker's license.

What must be filed for the eviction process to begin after a landlord has waited three days and serves a tenant a notice to pay or vacate the premises?

a. A complaint for eviction b. A writ of possession c. Evictus nuncus d. The lease

a. The eviction process is handled by the court, and it begins when a landlord files a complaint for eviction with the county court.

Samuel wants to do a 1031 exchange. He sold his investment property and has identified the property he'd like to buy next. Within how many days must he close on this property in order for it to qualify as part of the exchange?

a. 180 b. 30 c. d.

a. He has 45 days to identify a property he would like to purchase and 180 days to close on it, from time of sale.

In which form of co-ownership is a person's ownership inheritable?

a. Joint tenancy b. Tenancy by the entirety c. Tenancy in common d. Tenancy in severalty

c. Tenancy in common allows for a persons share to be inheritable, it does not automatically pass forth to the rest of the owners like in joint tenancy (this is called the right of survivorship).

How long do prospective tenants have to request a refund after purchasing a rental list?

a. 10 days b. 15 days c. 30 days d. 360 days

C. 30 days.... tenants have up to 30 days to request a 75% refund if they do not purchase a rental

Which method best describes the foreclosure process in Florida?

a. Caveat emptor b. Judicial c. Lis pendens d. Non-judicial

b. The state of florida offers a judicial foreclosure process

A judicial foreclosure is known as a lien theory process. Basically, the homeowner has legal title to the property...

Unlike title theory, where as the owner has equitable title

Which of the following statements about the Florida property tax disclosure is NOT true?

a. It can be included in the sales contract itself. b. It cautions buyers not to rely on the current year's tax to predict what they'll have to pay. c. It gives buyers a rough estimate of the property tax they'll pay in the coming year. d. It must be provided to sellers when they sign their agency agreement.

c. This disclosure doesn't provide any estimates of future property tax amounts.

Which act simplifies, clarifies, and modernizes consumer protection laws and makes them more consistent with federal trade laws?

a. Fair Housing Act b. Federal Duplicate Law Condensation Act c. Federal Trade Commission Act d. Florida Deceptive and Unfair Trade Practices Act

d. The Florida Deceptive and Unfair Trade Practices Act is the act that simplifies, clarifies, and modernizes consumer protection laws and makes them more consistent with federal trade laws.

Which of the following could an investor who sells an apartment house buy using a 1031 exchange?

a. Duplex, office building, or warehouse b. Duplex only c. Office building only d. Warehouse or office building only

a. Any of these would be allowed with a 1031 exchange.

Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?

a. Easement by prescription b. Easement in gross c. Express easement d. Visible easement

a. Easements by prescription are created through continuous, exclusive, and long-term use of another's property without actual permission.

Robin has great credit and was able to secure a loan for her ocean-side dream home. Her 30-year, fixed-rate loan is for an amount that's above conventional loan limits. What type of loan does Robin have?

a. A conforming Freddie Mac loan b. A government loan c. An FHA loan d. A non-conforming loan

d. Loans that are outside of Freddie Mac and Fannie Mae guidelines, such as jumbo loans, are non-conforming loans.

Which one of the following performs ministerial duties, such as recordkeeping, for the FREC?

a. DBPR b. DCPA c. DHR d. DRE

d. The DRE is responsible for ministerial duties on behalf of the FREC.

How long are the terms of the members of the FREC?

4 years

The Richards family farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Buyers in the area looking for a move-in ready home would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards' property?

a. Demand b. Scarcity c. Transferability

d. Utility

a. Although large parcels in the area are scarce, the low demand of buyers willing to buy and wait to live in a property that needs significant repairs is affecting the value.

In investments, each type of depreciation is defined by a particular event. Which of the following best describes a depreciation type and an event it's tied to?

a. Economic depreciation and cost recovery b. Economic depreciation and physical deterioration c. Operating depreciation and taxing authority d. Tax depreciation and physical deterioration

b. Economic depreciation is often tied to physical deterioration.

What are the two types of Real Estate Investment Trusts?

a. Debit and credit b. Mortgage and equity c. Mortgage and lease d. Residential and commercial

b. The two major investment choices for REITs are mortgage and equity.

If a property's income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate?

a. 20% b. 25% c. 40% d. 5%

a. The cap rate is 20%. To calculate cap rate, divide the income by the property value. The formula for this is rate = income / value.

Spark City has built a new city courthouse. The construction caused a landslide, which buried most of Joe's farmland; now it can no longer be used for farmland. Joe is bringing an action against the city for his property loss. What is this an example of?

a. Condemnation b. Eminent domain c. Foreclosure d. Inverse condemnation

d. Inverse condemnation occurs when action is brought against the government when its police powers have caused an adjacent land owner's property to decrease in value.

Joanie sees herself as a mover and shaker, a leader, someone who jumps in and gets things done. She likes to be involved and in charge. When she decides to start investing in real estate, which of these choices is she most likely to select as her investment vehicle?

a. A multi-family residential income property b. A real estate investment trust c. A real estate mortgage investment conduit d. A real estate syndicate membership

a. Since Joanie seems like an active, hands-on sort of person, she's most likely to choose a residential income property where she'll be in charge of the property rather than passive options like the REIT, REMIC, or syndicate.

Lien Theory

What is Florida? Lien Theory or Title Theory?

Who holds the title?

-Florida is a Lien Theory State

-In lien theory states the borrow holds the title and owns the house, but a promissory note signed by the borrower gives the lender the right to seize and sell the house should the borrow default

-The document that places a lien on the property is a mortgage

Title Theory

Who holds the title to the property?

Is it easier for a lender to foreclose on a property?

• In title theory states, the borrower receives the deed, but the lender keeps the title and owns the house until the borrower pays off the loan

-The borrower doesn't "actually" own the property until the mortgage is paid off and the lender releases the deed.

-Since the lender already owns the property, it is much easier for a lender to foreclose on a property in a title theory state.

Constructive Notice

Recordation ensures that the buyer's ownership is protected. It provides constructive notice of the sale/purchase, which means that the record is publicly available to anyone who does a records search.

Actual Notice

Parties have personal knowledge of the particular event

General Warranty Deed

A deed in which the grantor fully warrants good, clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed.

Special Warranty Deed

identical to a general warranty deed except that the covenant against encumbrances applies only to the time that the grantor owned the property

Quitclaim Deed

A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest.

Bargain and Sale Deed

A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion

Assignment of Contract

Transfer of all rights under a contract to a third party. Assignor remains secondarily liability.

Novation

Substituting a new obligation for an old one or substituting new parties to an existing obligation.

Exclusive Right to Sell Listing

Under this listing arrangement, the broker employed is entitled to a commission no matter who sells the property during the listing period. (Even the Seller)

Exclusive Agency Listing

The owner employs only one broker but retains the right to personally sell the property, and thereby not pay a commission. However, if any other real estate company sells the property, the listing broker is still entitled to the commission stipulated.

Open listing agreement

non-exclusive listing agreement given by a seller to as many brokers as he or she chooses; broker only entitled to commission if he is the procuring cause of the sale

Net Listing Agreement

A contract between a seller of real estate and a real estate broker in which the broker is paid as a commission the amount the sale price exceeds the price set by the seller.

Option Contract

A contract under which the offeror cannot revoke the offer for a stipulated time period (because the offeree has given consideration for the offer to remain open).

An option contract gives the potential buyer, who is known as the optionee, the right to purchase the property of the seller, or optionor, as some time in the future

Energy Efficiency brochure

Requires buyers to receive a brochure before or at the time of executing the sales contract, about the option of receiving an energy efficiency rating on the property being purchased

Property Tax Disclosure

buyers should not rely on the sellers current property taxes as the amount of property taxes the buyers may be obliged to pay in the year subsequent to purchase. a change in ownership or property improvements triggers reassessments of the property that could result in higher property taxes

form-based planning

City planning where experts of different fields work together

Traditional based planning

Specialists from different areas of expertise work separately and focus on designing "their" areas

What is the difference between a variance and a special use permit?

A. A special use permit is permanent, whereas a variance is temporary. B. A special use permit requires a show of hardship; a variance doesn't. C. A variance is permanent, whereas a special use permit is temporary. D. A variance requires a show of hardship; a special use permit doesn't.

D. A variance requires a show of hardship; a special use permit doesn't

What is a comprehensive plan?

A. A blueprint for new construction projects B. A detailed plan that supplements a master plan and its implementation C. A long-term master plan for the development of a city or county D. A map of all of the zones in a district

C. A long-term master plan for the development of a city or county

FAR, or floor area ratio, includes ________.

A. All of the habitable structures on a lot B. All structures, including habitable structures and parking structures, but not parking lots

C. None of the habitable structures on a lot D. The area within parking lots or parking structures

A. All of the habitable structures on a lot

You're on a planning board that's discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?

A. "That applies to commercial areas only." B. "That's a great way to meet our objectives." C. "That's crazy. We're trying to reduce density, not increase it." D. "That will work for residential areas, but what about commercial?"

B. "That's a great way to meet our objectives."

What's the next step in the adoption process for a comprehensive plan once the background studies have been performed?

A. Developers bid on areas they would like to develop. B. Residents vote on the plan. C. The plan is reviewed at a public hearing by the local legislative body. D. The plan is reviewed at a public hearing by the planning commission.

D. The plan is reviewed at a public hearing by the planning commission.

Who or what entity determines the final results of the comprehensive plan?

A. The commission and local legislative body, with input from the public B. The governor C. The planning commission D. The public

A. The commission and local legislative body, with input from the public

What purpose does bulk zoning serve?

A. It homogenizes the look of the area. B. It keeps similar races together. C. It provides increased density. D. It restricts building density.

D. It restricts building density.

Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?

A. Aesthetic zoning B. Downzoning C. Incentive zoning D. Spot zoning

D. Spot Zoning

"Spot zoning allows a specific property to be rezoned within an existing zoning area. Spot zoning is illegal in some states."

Tom owns a construction company in a small southern town. Although national housing statistics have changed dramatically, his business hasn't increased or decreased at all. Which characteristic of the real estate market is described here?

A. Highly influenced by governmental policy B. Indestructible C. Slow to respond D. Unique

C. Slow to respond

"The real estate market is slow to respond. It's not centralized, and therefore changes at a national level may take a long time to be seen at a local level."

What institution was formed in 1968 and took over the sale of the government loan market?

A. Fannie Mae (FNMA) B. Farmer Mac C. Freddie Mac (FHLMC) D. Ginnie Mae (GNMA)

D. Ginnie Mae (GNMA)

Ginnie Mae (GNMA or the Government National Mortgage Association) purchases government loans on the secondary market.

Homeowners may transfer the SOH benefit to a subsequent home. In order to do this, their homestead exemption must have been in place on their current home for _________________ preceding years.

A. One of the previous two B. The last 10 C. The last five D. The last two

A. One of the previous two "The homestead exemption must have been in place for one of the two preceding years, and the benefit transferred is limited to $500,000."

How does the Federal Housing Finance Agency affect mortgages?

A. It acts as a watchdog and focuses specifically on educating consumers about mortgage loans. B. It controls how much money is available to banks. It also controls interest rates, which affect how much mortgages cost. C. It lends money to other financial institutions (not end-users), which makes more money available for mortgages and keeps down the costs of borrowing money. D. It sets limits for conforming loans and controls the amount of money that lower-income people can borrow.

D. It sets limits for conforming loans and controls the amount of money that lower-income people can borrow.

"The FHFA sets limits for conforming loans and controls the amount of money that lower- income people can borrow, which helps prevent housing market-related financial crises."

In what year was the Americans with Disabilities Act made law? A. 1950 B. 1978 C. 1988 D. 1990

D. 1990

What is the most likely effect when the Fed sells securities on the open market?

A. Banks will have more money to lend. B. Interest rates will decrease. C. The economy may grow due to an increased money supply. D. The economy may slow down due to a decreased money supply.

D. The economy may slow down due to a decreased money supply.

"When the Fed sells securities, it takes money out of the market. This decreases the supply of money in the market and potentially slows down the economy."

Someone who's been given the authority to act on behalf of someone else is a(n) ______.

A. Agent B. Client C. Mortgage lender D. Trustor

A. Agent "The term agent, though often used to refer to a real estate licensee, means someone who's been given the authority to act on someone else's behalf in some capacity."

To comply with the statute of frauds, an option contract must be ______.

A. In writing and signed by the optionee B. In writing and signed by the optionor C. In writing and signed by the optionor On file at the local courthouse

C. In writing and signed by the optionor

To comply with the statute of frauds, an option contract must be in writing and signed by the optionor (seller).

Which two duties of the transaction broker are shared with the single agent?

Account for all funds and obedience Confidentiality and full disclosure Maintain limited confidentiality and deal honestly and fairly Present all offers and use skill, care, and diligence

Present all offers and use skill, care, and diligence

Transaction brokers and single agents have two duties on common: present all offers and counteroffers and use skill, care, and diligence.

Who is the owner of the property in a personal representative's deed?

A deceased person A divorcee A legally incompetent person A minor

A deceased person

A personal representative deed is the transfer of title on the conveyance of a deceased person's property. The personal representative is appointed in the will or by a court to handle the deceased individual's property.

In the sale of a business, which generally involves 12 steps, something happens with the assets early in the process. What is it?

Business assets and personal assets are combined. Business assets are separated from personal assets.

Business assets are subtracted from liabilities. Business assets are subtracted from the value of the business.

Business assets are separated from personal assets.

Business assets are separated from personal assets, which are not part of the sale.

Sirius Shepard decided to open a brokerage in Azkaban. He's trying to decide between registering the trade name Sirius Shepard Realty or Sirius Seasoned Sales Realty. Which of the following statements is true?

If used, trade names may not be longer than the licensee's own name Only sole proprietors may use trade names Sirius can choose to register either of these trade names, but not both simultaneously. The actual name of the individual is not a trade name; therefore he can't register Sirius Shepard Realty.

The actual name of the individual is not a trade name; therefore he can't register Sirius Shepard Realty.

"Sirius would only be able to register Sirius Seasoned Sales as a trade name and not Sirius Shepard Realty because his actual name is not considered a trade name."

Before beginning development of a condominium building, what must the developer do?

Create an estimated operating budget Create the condo association Record a declaration of condominium Record a declaration of intent

Record a declaration of condominium

"The developer must record a declaration of condominium before beginning development. This is recorded in county records where the property will be located."

In Florida, which of the following scenarios is considered a violation of FTC advertising rules?

Marcy just listed the Brown property with the following description: "2,000 square feet of living space for a total of 2,800, including two outbuildings and an unfinished garage."

Sarah has just started her career as a solo agent and decides to try a new marketing campaign slogan: "Come let our team of hard-working agents find you the home of your dreams!"

Shelia just closed on the Martin property yesterday. She's taken down all the signs and online listings for it.

Virginia posted an MLS listing for the Kennedy property without her principal broker's approval.

Sarah has just started her career as a solo agent and decides to try a new marketing campaign slogan: "Come let our team of hard-working agents find you the home of your dreams!"

"While it may seem innocent enough, claiming to be a part of a team when you aren't is misleading and deceptive advertising."

Luke recently moved from a condominium to a cooperative. With a cooperative, his share of mortgage interest and real estate taxes will be ______.

Considered as capital gains Deductible on his personal income tax returns Fully refundable to him Not deductible on his personal income tax returns

Deductible on his personal income tax returns

As the resident in a cooperative, his share of mortgage interest and real estate taxes is deductible on personal income tax returns.

Stefan is an unlicensed assistant for the Ace Team at Acme Realty in Florida. Which of these activities can he perform?

Calculate commissions for team members. Explain listing information to a client. Host an open house. Solicit business for the team.

Calculate commissions for team members.

"Unlicensed assistants can't perform any activities that require a real estate license. Prohibited activities include hosting open houses, showing homes, explaining listing information to a consumer, and soliciting business, among others."

Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan?

$1,038. $1,042. $1,044. $1,

$1,042.

In the first month, Juan pays $1,044.79 in interest ([$295,000 x .0425] ÷ 12). His monthly payment (stated in the question) is $1,750, so that means he paid the principal down $705. ($1,750 - $1,044.79). His new principal balance is $294,294.79 ($295,000 - $705.21). We use the new principal balance amount to calculate interest for the next month. Juan pays $1,042.29 in interest ([$294,294.79 x .0425] ÷ 12)."

caveat emptor

Latin term for "buyer beware"

If probable cause is found the DBPR issues a formal complaint, the licensee has 21 days to do the following...

• Not dispute the allegations of fact and request an informal hearing -dispute the allegations of fact and request a formal hearing -Not dispute the allegations of fact and waive the right to be heard

Criminal Felony

Misdeameanor of second degree = $500 fine, 60 days in jail

Misdeameanor of 1st degree = $1000 fine, 1 year in jail

Spec Homes

built without having a specific buyer in mind

Tract homes

Residential construction; type of speculative building, a new subdivision will typically feature several model homes. Buyers select a floor plan from the models and a lot on which to build in the new subdivision

Custom Homes

A custom builder constructs homes under contract with a buyer, often using building plans provided by architects or buyers.

The FREC consists of 7 members, appointed by the governor... name them all

-4members are active brokers licensed for at least 5 years -1 member is an active sales associate licensed for at least 2 years -2 members are consumers who have never been licensed -at least 1 member must be 60 or older

General vs. Special Agents

General agents have an ongoing responsibility for all of the dealings related to a specific piece of property. an example of this would be a property manager

Special agents: have limited authority to act on behalf of their clients. Buyer and seller agents fall into this category

Sub-agent

sub agent works for another agent, who is representing the seller, so the sub agent indirectly works for the seller

What are the three duties licensees owe to all customers and clients?

D ealing honestly and fairly A ccounting for all funds D isclosing all known facts that materially affect the value of the property

(DAD)

Transaction Broker

• Transaction broker is the presumed agency in florida and is the only relationship that does not require a written disclosure to be signed...

A transaction broker is a broker who provides a limited form of representation to the buyer, a seller, or both in a real estate transaction but does not represent either in a fiduciary capacity. D ealing honesty and Fairly A ccounting for all funds D isclosing all known facts that materially affect the value of residential real property P resenting all offers and counter-offers in a timely manner U sing skill, care and diligence in all transactions M aintaining confidentiality A ny additional duties that are entered into written agreement

Licensees who have no brokerage relationship still have duties to potential sellers and buyers

D A D

debt service ratio

This is used to determine whether the a properties income will cover its monthly mortgage payments

this is calculated by diving NOI/annual debt service

A DCR of less than one indicates negative cash flow

Prorated Expenses

Typically the seller pays the costs for property taxes, utilities, etc. on the day of closing

Prorations can be calculated one of two ways

1). using a statutory year (360 days) 2.) calendar year (365 days)

The real estate taxes assessed on the property are $785 for the year. The taxes arent due until the following january 1st. Closing is held on May 31st... Here is how that would look on the closing statement

Accrued period of taxes owed by the seller at closing using the statutory year:

• $785.00/12 = $65.42 per month -$65.43 x 5 full months (jan 31st- May 31st) = $327.

The seller will recieve a "debit" and buyer a "credit"

the seller is paying for his 5 months of property taxes from january to may

Now, what if the seller is closing mid month, lets say June 15th? Well... we would just divide that monthly fee of 65.42 and divide it by 30. that would get us a daily amount of $2.18, we then multiply that by 15 and add that to the previous 5 months...

Documentary stamp tax

• Paid at a rate of 70 cents per $
• Commonly paid by the seller

Documentary stamp tax on notes

• calculated at a rate of 35 cents for every $100 of the unpaid balance once the note is executed

Intangible Tax on New Mortgages

NEW loan amount x $.002 = cost of intangible tax

Typical Accrued items that go in the sellers debit column

-Unpaid real estate taxes -Tenants rent the seller collected for a period of time in which the buyer will own the property (prepaid) -Interests on the sellers mortgage assumed by the buyer

Prepaid items go in the sellers credit column and the buyers debit column

Typical Prepaid items include: -Prepaid taxes -Rent paid by the seller under a lease assigned to the buyer

-utilities billed and paid in advance -heating oil in the tank

Civil rights act of 1866

recognized all persons born in the U.S as citizens, regardless of racce or color and protexted the rights of every U.S citizen to buy, sell, convey, inherit and possess property

Anastasia wants to get her real estate license and bring together buyers and sellers. This means she will be involved in which of the following?

Agency Appraisal Brokerage Property management

Brokerage

"This describes the business of real estate brokerage, in which agents bring together a buyer and seller and negotiate real estate transactions."

Phyllis and Maury obtained a mortgage from Taylor Bank & Trust in 1998. In 2014, they obtained a second mortgage from Quail Loans. What's the loan with Taylor Bank & Trust considered?

First mortgage Home equity line of credit Junior mortgage Subordinate mortgage

First Mortgage

"The earlier of the two mortgages to be recorded is called a first mortgage."

According to RESPA, what must the lender give to the borrower at either the time of loan application or within three days following application?

Closing Disclosure Freddie Mac borrower disclosure Loan Estimate TIL statement

Loan Estimate

"The lender must give the borrower the Loan Estimate at the time of application, or within three days following loan application. The Closing Disclosure must be provided to the borrower three days prior to settlement."

Dorcas and Ralph were married for 15 years. Ralph, an accountant, always took care of the bills and other financial matters for the couple. Then Dorcas discovered that Ralph had failed to pay the property tax on their property for the last three years. Which of these is likely to happen?

Dorcas and Ralph will be required to sell their home to the state for the amount of property tax owed.

The state will place a condemnation order on their property so they can't transfer their property until the debt is satisfied.

The state will place a mortgage lien on their home for the amount of property tax owed.

The state will place a tax lien on their property so it can't be transferred without satisfying the debt.

The state will place a tax lien on their property so it can't be transferred without satisfying the debt.

"A real property tax lien is placed against property owners who have not paid their property taxes."

The appraisal on Jean's property came in at $22,000 less than the agreed-upon sales price, so the buyer, Thomas, wants to renegotiate the terms. If they can come up with a new price that is satisfactory to both parties, what will they use to document this?

Addendum Amendment Annotation Appendix

Amendment

"A change to an existing sales contract is called an amendment, which changes one or more of the contract's original terms."

What must be on every sales associate's advertisement?

License number License registration date Their broker's firm name Their license status

Their broker's firm name

"The associate's broker firm name must appear on all advertisements."

What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property?

Conforming value Regression Similar cost principle Substitution

Substitution

The principle of substitution assumes that a reasonable person wouldn't pay more for a nearly identical property; therefore, the price of similar properties influences a given property's market value."

An appraiser used the cost approach to estimate a property's value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?

$166,000 $174,000 $266,000 $274,000

$174,000

"To estimate value, an appraiser adds the site value to the estimated cost to replace improvements then subtracts the estimated depreciation. So to solve the equation, you need to solve for cost of improvements. In order to do this, you have to move the given values to the other side of the equation - $50,000 + $4,000. Here's the equation used to find the cost of improvements = $220,000 ‒ $50,000 + $4,000."

Which of the following is true regarding the tax protest procedure in Florida?

Property owners have no option but to seek relief through the courts. Property owners may not petition the VAB directly. Property owners may petition the VAB before meeting with the county property appraiser. Property owners must first meet with the county property appraiser or file an appeal before petitioning the VAB.

Property owners must first meet with the county property appraiser or file an appeal before petitioning the VAB.

"Property owners must request a conference with the county appraiser, or file an appeal before they file a petition with the VAB."

What is the maximum amount of SOH protections which can be transferred to a new home?

$10,000 $100,000 $50,000 $500,000

$500,000

The SOH benefit transferred is limited to $500,000.

The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called the ______ rate.

Adjustable Discount Federal funds Prime

When a member bank seeks a short-term loan from another bank, the federal funds rate applies. This is for short-term (overnight) loans without collateral.

Federal funds

Which of the following statements regarding "kickbacks" is true?

The receiving party absolutely must have an active real estate license.

They can be paid to another party in a transaction, but only with the broker's approval and with the full knowledge of all other parties.

They can be paid to anyone who refers a client to a licensed agent.

They're always illegal.

They can be paid to another party in a transaction, but only with the broker's approval and with the full knowledge of all other parties.

"The party to whom the referral fee or kickback is paid doesn't have to have a real estate license. However, the person must be a principal in the transaction."

A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee?

Borrower

Lender Loan Property

Lender

The lender holds the mortgage on the property, so the lender is the mortgagee.

Chapter 475 of the Florida statutes sets forth the law regarding real estate brokers, sales associates, and real estate schools. What is this law called?

Administrative Code Department of Business and Professional Regulation Organizational Structure Act Real Estate Professional Practice Act

Real Estate Professional Practice Act

"The Real Estate Professional Practice Act was created by the Florida legislature to establish the legal rights and responsibilities of real estate licensees."

Which of the following describes a tenancy at will?

Tenancy after the lawful authority has expired, after which the landlord may evict

Tenancy for an unknown period of time, with either party permitted to terminate the lease by giving notice

Tenancy for a specified period of time that automatically renews itself for the same length of time unless one party terminates

Tenancy of definite duration that terminates automatically and is inheritable

"Tenancy for an unknown period of time, with either party permitted to terminate the lease by giving notice

Tenancy at will is for an unknown period of time, with either party permitted to terminate the lease by giving notice.

A real estate licensee in Florida could be found guilty of unauthorized practice of law for preparing this type of real estate contact.

A. Broker representation Agreement B. Lease agreement with a term longer than one year

C. Listing Agreement D. Purchase Agreement

B. Lease Agreement with a term longer than a year

When prospecting and soliciting for new business, licensees should be familiar with what federal acts? A. Do not call implementation act, CAN-SPAM act, and Junk Fax prevention Act

B. Do not call implementation act, sherman act, and unfair trade practices act

C. Human relations Act, Fair housing act, and americans with disabilities act

D. Sherman act, Clayton act, and unfair trade practices act

A. Do not call implementation act, CAN-SPAM act, and Junk Fax prevention Act

These refer to solicitation via phone, email and fax

Which of the following items is something a lender is prohibited from doing if the lender wants to write qualified mortgages? A. Amortization B. Balloon Interest C. Debt to income ratio less than 43% D. Payback terms longer than 30 years

D. Payback terms longer than 30 years

Debt to income ratios may not exceed 43%. Payback terms may not exceed 30 years

Its that time of the year again in real estate where things are really slow and properties just arent moving. In real estate, this period is referred to as a ________ A. Cyclical certainty B. Downcycle C. Downturn D. Slump

B. Downcycle

Which of the following is a true statement about cooperatives? A. A cooperative is a fee simply type of ownership B. A cooperative is a joint venture with shareholders, formed for their benefit and governed by the developer. C. All cooperatives have specific criteria for residents D. Unlike a condominium, the cooperative corporation does not own the land, buildings, and all rights and interests in the corporation

c. All cooperatives have specific criteria for residents

What is a real estate mortgage investment conduit (REMIC)?

A. A company that owns, and usually operates, income-producing real estate B. An entity used to pool mortgage loans and issue mortgage backed securities C. An organization that manages income producing real estate properties D. An organization with many investors who jointly participate in a real estate investment

B. An entity used to pool mortgage loans and issue mortgage backed securities

For an antitrust violation to occur, which element must be present? A. Agreement B. Coercion C. Cohesion D. Commission

B. Coercion

Which term is used to define a search of public records going back at least 60 years to establish a property's title history?

Correction deed limited search title examination title report

Title examination

Title examination (also called title search) searches the public records for at least 60 years to establish a property's title history.

Kim moved to the state a year ago and immediately obtained her real estate sales associate license. Now she would like to be a Florida Real Estate Commission member. Is she qualified to achieve this goal?

A. Yes. She only needs one year of experience to qualify for a position on the commission.

B. No. She must have at least two years of real estate sales associate experience.

C. No. She must have been a Florida resident for at least two years.

D. No. She must have been an active broker for at least 10 years immediately prior to applying.

B. No. She must have at least two years of real estate sales associate experience.