FREC Exam Practice
Exam
| Term/Front | Definition/Back |
|---|---|
| 1 1. Under Florida law, what brokerage relationship is presumed unless another relationship is established in writing? | Transaction broker |
| 2 2. Which of the following is NOT an essential element of a valid contract? | Consideration |
| 3 3. A tenant who leases property for 5 years has what type of estate? | Freehold estate |
| 4 4. Which deed provides the greatest protection to the grantee? | Special warranty deed |
| 5 5. A broker mixes personal funds with escrow funds. This is called: | Novation |
| 6 6. Which lien generally has the highest priority? | Property tax lien |
| 7 7. A borrower obtains a loan with equal monthly payments that cover both principal and interest. This loan is: | Package mortgage |
| 8 8. Which legal description method is most commonly used for subdivisions? | Government survey system |
| 9 9. Florida licensees may operate as: | Single agents or transaction brokers |
| 10 10. If a seller accepts a buyer’s counteroffer, when is a contract formed? | When acceptance is communicated to the offerer |
| 11 11. A broker receives an earnest money deposit on Monday. By when must the broker deposit the funds into the escrow account? | By Wednesday |
| 12 12. Which type of ownership includes the right of survivorship between spouses in Florida? | Tenancy by the entirety |
| 13 13. A property owner grants a utility company the right to run power lines across the property. This is: | An easement |
| 14 14. Which valuation principle states that a property’s value is affected by the value of nearby properties? | Contribution |
| 15 15. A salesperson wants to become a broker in Florida. What is the minimum active sales associate experience generally required? | 2 years during the preceding 5 years |
| 16 16. Which of the following would be considered personal property rather than real property? | Freestanding refrigerator not built into cabinetry |
| 17 17. A mortgage is best described as: | A lien securing a promissory note |
| 18 18. Which appraisal approach is most commonly used for a single-family residence? | Sales comparison approach |
|
19
19. A buyer and seller agree to replace an existing contract with a new contract. This is called: |
Novation |
| 20 20. The Florida Real Estate Commission (FREC) consists of: | 7 members |
| 21 21. A broker who represents a seller as a single agent owes all of the following fiduciary duties EXCEPT: | Limited confidentiality |
| 22 22. Under Florida law, a sales associate’s real estate license is issued to: | The employing broker |
| 23 23. Which form of ownership allows unequal ownership interests and no right of survivorship? | Tenancy in common |
| 24 24. A property’s assessed value is primarily used to determine: | Property taxes |
| 25 25. Which clause in a mortgage allows the lender to demand full repayment if the property is sold? | Due-on-sale clause |
| 26 26. If a buyer defaults under a purchase contract, earnest money may be considered: | Liquidated damages |
| 27 27. The bundle of rights associated with real property includes: | Possession, control, exclusion, enjoyment, and disposition |
| 28 28. Which governmental power allows the government to take private property for public use with compensation? | Eminent domain |
| 29 29. A deed becomes effective when it is: | Delivered and accepted |
| 30 30. A property sold for $315,000. If the broker earned a 6% commission and the listing broker split the commission 50/50 with the cooperating broker, how much did the listing broker receive before paying any sales associates? | $9,450 |
| 31 31. A property is listed at $420,000. The buyer makes an offer 8% below list price. What is the offer amount? | $386,400 |
| 32 32. A buyer gives a sales associate an escrow deposit check on Friday. The associate delivers it to the broker on Monday. The broker’s deadline for depositing the funds is calculated from: | Monday |
| 33 33. Which type of lien is created voluntarily by the property owner? | Mortgage lien |
| 34 34. An owner sells property but retains a life estate. The buyer receives: | A remainder interest |
| 35 35. A rectangular lot measures 120 feet by 150 feet. How many square feet does it contain? | 18,000 sq ft |
| 36 36. Which appraisal principle states that the maximum value of a property tends to be set by the cost of acquiring a similar substitute property? | Substitution |
| 37 37. Under Florida law, which brokerage relationship requires written disclosure before or at the time of entering into the relationship? | Transaction broker and Single agent |
| 38 38. If a property’s net operating income (NOI) is $48,000 and the capitalization rate is 8%, the estimated value is: | $600,000 |
| 39 39. Which of the following is an example of external obsolescence? |
A new landfill built near the property |
| 40 40. A contract signed by a minor is generally: | Voidable by the minor |
| 41 41. A broker who intentionally uses escrow funds for personal expenses is guilty of: | Conversion |
| 42 A property sells for $525,000. The commission is 5%. The listing broker and cooperating broker split the commission 60/40, with the listing broker receiving the 60% share. How much does the listing broker receive? | $15,750 |
| 43 43. A seller tells a listing agent that the roof leaked last year but was repaired. The agent should: | Disclose the information to prospective buyers |
| 44 44. Which of the following is considered an example of police power? | Building codes |
| 45 45. A property’s legal description reads: “Lot 12, Block C, Palm Grove Subdivision.” Which legal description method is being used? | Lot and block |
| 46 46. A tenant remains in possession after the lease expires without the landlord’s consent. The tenant is: | A tenant at sufferance |
| 47 47. Which of the following would MOST likely be classified as a fixture? | Built-in bookcase attached to the wall |
| 48 48. A buyer assumes the seller’s mortgage. Who remains liable for the loan unless released by the lender? | Both buyer and seller |
| 49 49. A property owner grants a neighbor the right to use a driveway that crosses the owner’s land. This is: | An easement appurtenant |
| 50 50. The clause in a mortgage that causes the mortgage to become void once the debt is paid is the: | Cost approach |
| 51 52. A broker’s registration is voluntarily inactive. To reactivate it, the broker must: |
Complete the required continuing education and reactivate through the state |
| 52 A lender makes an 80% loan on a property worth $350,000. How much is the down payment? | $70,000 |
| 53 54. Which type of ownership allows a person to own property for the duration of another person’s life? | Estate in remainder |
| 54 55. A buyer purchases a property and receives title through a deed. The act of transferring title is known as: | Conveyance |
| 55 56. Which of the following is NOT one of the physical characteristics of land? | Scarcity |
| 56 57. If a contract has been fully performed by all parties, it is considered: | Executed |
| 57 58. Which valuation principle states that adding an improvement is only worthwhile if it increases value by at least the cost of the improvement? | Contribution |
| 58 59. A homeowner fails to pay property taxes. The government can enforce collection under its power of: | Taxation |
| 59 60. Which of the following would be considered constructive notice? | Information available through properly recorded public records |
| 60 61. A borrower defaults on a mortgage loan. The lender accelerates the debt and files suit. This process is: | Foreclosure |
| 61 62. Which type of mortgage allows the lender to advance additional funds in the future without rewriting the mortgage? | Open-end mortgage |
| 62 63. A Florida real estate licensee who represents both parties in the same transaction as a fiduciary would be practicing: | Designated agency |
| 63 64. Which type of listing gives a broker the right to earn a commission regardless of who procures the buyer? | Exclusive right of sale listing |
| 64 65. A property owner dies without a will and without heirs. Ownership of the property transfers to the state through: | Escheat |
| 65 66. Which of the following is considered actual notice? | Personally seeing an encroachment on a property |
| 66 67. A borrower signs a promissory note. The note is: | Evidence of the debt |
| 67 68. Which statement about joint tenancy is TRUE? | Ownership interests must be equal |
| 68 69. A sales associate receives a referral fee from an out-of-state broker. Under Florida law, this is: | Permitted if the out-of-state broker is properly licensed in another state and does not perform real estate services in Florida |
| 69 70. A property’s market value is BEST defined as: | The most probable price a property should bring in a competitive market under normal conditions |
| 70 71. Which of the following is a characteristic of real property? | Permanence of investment |
| 71 72. A landlord leases a retail space to a tenant for 10 years. The tenant’s interest is: | An estate for years |
| 72 73. A broker who is found guilty of violating Florida license law may be disciplined by: | FREC |
| 73 74. A broker advertises a property as having 2 acres. A later survey reveals it contains only 1.8 acres. This is an example of: | Negligence |
| 74 75. Under Florida law, which brokerage relationship is illegal? | Dual agency |
| 75 76. A property’s value increases because a new shopping center is built nearby. This is an example of: | Progression |
| 76 77. The right to use another person’s land for a specific purpose is called: | Easement |
| 77 78. A borrower obtains a $240,000 loan at 80% loan-to-value. What is the property’s value? | $300,000 |
| 78 79. Which of the following terminates an offer? | Acceptance, Rejection and Counteroffer |
| 79 80. The clause in a deed that names the parties and states the intent to convey is the: | Granting clause |
| 80 81. A mechanic’s lien is an example of: | A specific involuntary lien |
| 81 82. Which appraisal approach is based primarily on the principle of substitution? | Sales comparison approach |
| 82 83. A sales associate changes employers. The license becomes: | Involuntarily inactive until registered with the new broker |
| 83 84. Which type of deed contains no warranties of title? | Quitclaim deed |
| 84 85. Property taxes in Florida are based on: | Assessed value and millage rate |
| 85 86. A contract that has not yet been fully performed is: | Executory |
| 86 87. The lender’s remedy after borrower default is usually: | Foreclosure |
| 87 88. Which government power supports zoning regulations? | Police power |
| 88 89. A buyer agrees to pay the remaining balance of the seller’s mortgage and becomes primarily liable. This is: | Assumption of mortgage |
| 89 90. The most complete form of ownership is: | Fee simple absolute |
| 90 91. A property manager collects rents on behalf of an owner. The manager is acting as: | A fiduciary agent |
| 91 92. If a property sold for $400,000 and appreciated 10%, what was its value before appreciation? | $363,636 |
| 92 93. Which Florida entity has authority to discipline licensees? | FREC |
| 93 94. A homestead property owner dies survived by a spouse and minor child. The homestead may: | Be subject to Florida homestead restrictions on devise |
| 94 95. Which of the following is considered an economic characteristic of land? | Scarcity |
| 95 96. A buyer purchases property “subject to” the existing mortgage. Who remains primarily liable on the note? | Seller |
| 96 97. Which type of lease is commonly used for shopping centers where tenants pay base rent plus a percentage of sales? | Percentage lease |
| 97 98. The term “emblements” refers to: | Annual crops produced by cultivation |
| 98 99. A property’s assessed value is $250,000 and the tax rate is 20 mills. Annual property taxes are: | $5,000 |
| 99 100. A listing broker discovers a material defect that the seller refuses to disclose. The broker should: | Disclose the defect to prospective buyers |
| 100 101. Which of the following is an example of functional obsolescence? | An outdated floor plan |
| 101 102. A mortgage loan with periodic interest-rate adjustments is: | An adjustable-rate mortgage (ARM) |
| 102 103. In Florida, how many hours of post-license education must a newly licensed sales associate complete before the first renewal? | 45 hours |
| 103 104. A Florida broker fails to account for escrowed funds. This violation is most likely: | Conversion |
| 104 105. Which form of ownership includes the four unities of possession, interest, time, and title? | Joint tenancy |
| 105 107. Which of the following is NOT a requirement for adverse possession? | Possession with the owner’s permission |
|
106
108. A deed restriction is most commonly created by: |
Private agreement |
| 107 109. A buyer makes an offer on Monday. The seller changes one term and signs it Tuesday. The seller has: | Rejected the offer and made a counteroffer |
| 108 110. Which of the following is a specific lien? | Property tax lien against a specific parcel |
| 109 111. A broker receives an earnest money deposit on Wednesday. Excluding the day received, by what deadline must it generally be deposited into escrow? | Monday |
| 110 112. The legal concept that lets a lender recover the balance due immediately after default is: | Acceleration |
| 111 113. A property owner grants an easement to a utility company. This easement is most likely: | An easement in gross |
| 112 114. A property sells for $600,000. The broker earns a 5% commission. The listing broker keeps 55% of the commission and the cooperating broker receives 45%. How much does the listing broker receive before splitting with any sales associates? | $16,500 |
| 113 115. A sales associate receives an escrow check on Friday afternoon and immediately gives it to the broker. Monday is a legal holiday. By what day must the broker deposit the funds into escrow? | Thursday |
| 114 116. A seller tells a licensee that the air conditioning system occasionally stops working. The seller says, “Don’t tell anyone.” What is the licensee’s duty? | Disclose because it is a material fact affecting value |
| 115 117. Which of the following is TRUE regarding dual agency in Florida? | It is illegal |
| 116 118. A property owner gives a neighbor permission to fish in a pond on the owner’s land. This is: | License |
| 117 119. A buyer signs an offer and dies before the seller accepts it. The offer is: | Terminated |
| 118 120. Which statement about a quitclaim deed is TRUE? | It conveys whatever interest the grantor has, if any |
| 119 121. A property’s assessed value is $300,000. It has a taxable value of $250,000 after exemptions. The millage rate is 18 mills. Annual taxes are: | $4,500 |
| 120 122. A buyer purchases property “subject to” an existing mortgage and later defaults. Who can the lender sue on the note? | Seller only |
| 121 123. A broker advertises listed property without including the brokerage name. This is: | Blind advertising |
| 122 124. A seller signs a counteroffer and sends it to the buyer. Before the buyer receives it, the seller changes their mind and revokes it. The seller’s action is: | Valid because the counteroffer had not been communicated and accepted |
| 123 125. A husband and wife own property as tenants by the entirety. The husband alone signs a listing agreement. The agreement is: | Enforceable only against the signing spouse’s interest |
| 124 126. A buyer offers $300,000 for a property. The seller signs acceptance but never communicates it to the buyer. Before the buyer learns of the acceptance, the buyer withdraws the offer. Is there a contract? | No, because acceptance was never communicated |
|
125
127. A Florida sales associate’s license expires because the associate failed to complete post-license education before the first renewal. The license becomes: |
Void |
| 126 128. A tenant’s lease expires June 30. The landlord accepts rent for July without signing a new lease. The tenancy is now: | Periodic tenancy |
| 127 129. A property is worth $400,000. A lender makes a loan at 75% loan-to-value. The down payment is: | $100,000 |
| 128 130. A homeowner adds a swimming pool costing $60,000. An appraiser determines the pool increased market value by only $25,000. The difference illustrates: | Contribution |
| 129 131. Which statement about homestead property in Florida is TRUE? | Certain restrictions apply when the owner is survived by a spouse or minor child |
| 130 132. A broker places escrow funds into the brokerage operating account but never spends the money. This is: | Commingling |
| 131 133. A buyer assumes an existing mortgage. Later, the buyer defaults. The lender may pursue: | The buyer and potentially the seller if the seller was not released |
| 132 134. A deed is signed, notarized, and recorded. However, it was never delivered to the grantee. The deed is: | Invalid because delivery is required |
| 133 135. A broker is acting as a transaction broker. Which duty is NOT owed? | Loyalty |
| 134 136. A property sold for $480,000. The broker earned a 6% commission. The listing broker and cooperating broker split the commission 50/50. The listing broker then pays a sales associate 70% of the listing broker’s share. How much does the sales associate receive? |
$10,080 (Commission = $28,800 → listing broker gets $14,400 → associate gets 70% = $10,080) |
| 135 137. Under Florida’s Homestead Act, which of the following benefits is provided to homeowners who qualify? | Protection from forced sale by most creditors |
| 136 138. What is the main difference between equitable title and legal title in real estate? | Equitable title gives the right to use and enjoy the property, while legal title grants official ownership. |
| 137 139. What is the primary cause of external obsolescence in real estate? | Negative external factors such as economic downturns or neighborhood decline |
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