FREC Studies
| Term/Front | Definition/Back |
|---|---|
| 1 Under Florida’s Homestead Act, which of the following benefits is provided to homeowners who qualify? | Protection from forced sale by most creditors |
| 2 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. |
| 3 What is the primary cause of external obsolescence in real estate? | Negative external factors such as economic downturns or neighborhood decline |
| 4 What happens when a joint tenant sells their share of a jointly owned property? | The joint tenancy is severed, and the new owner holds their share as a tenant in common with the remaining owners. |
| 5 Under Florida real estate law, it is legal for a broker to share a referral fee directly with which of the following? | A licensed real estate salesperson under the broker’s supervision |
| 6 If a broker or sales associate is found to be engaging in fraudulent activities, what actions can the Florida Real Estate Commission (FREC) take? | Suspend, revoke, or deny the renewal of the license |
| 7 A broker or sales associate is engaging in fraudulent activities if he or she intentionally sells a property by using which of the following, even if the property is actually conveyed in accordance with the lottery rules? | A lottery or deceptive drawing scheme |
| 8 When a brokerage company advertises, what must the advertisement include to comply with Florida Real Estate Commission (FREC) regulations? | The registered name of the broker |
| 9 When must the brokerage relationship disclosure notice be presented to a prospective buyer or seller? | Before or at the time of entering into a written agreement for representation |
| 10 According to Florida law, how many members of the Florida Real Estate Commission (FREC) must have never been licensed as a real estate sales associate or broker? | Two |
| 11 What does FREC stand for in Florida real estate? | Florida Real Estate Commission |
| 12 How many members serve on the Florida Real Estate Commission (FREC)? | Seven |
| 13 What benefit does a real estate licensee receive for attending one legal agenda session of the Florida Real Estate Commission (FREC)? | Three hours of continuing education credit |
| 14 Which of the following is NOT subject to control by zoning laws? | Rent prices for residential properties |
| 15 The possibility that one may lose all or part of an investment is called: | Risk |
| 16 The relationship between supply and demand in the residential real estate market is best indicated by: | The vacancy rate |
| 17 The relationship between supply and demand in the residential real estate market is best described as: | An inverse relationship—when supply increases, prices decrease, and when demand increases, prices rise |
| 18 On a Closing Disclosure, the sales commission would most commonly appear as: | A debit to the seller |
| 19 The monetary policy that affects home loans by controlling the availability of money is determined by: | The Federal Reserve System |
| 20 The right to reinstate refers to the right of a borrower to: | Make payments to bring a loan current and stop the foreclosure process |
| 21 A partial release clause in a mortgage or deed of trust allows the borrower to: | Release a portion of the property from the mortgage lien after a certain payment is made |
| 22 If a broker lists a home and the owner admits there are problems with the septic tank, but instructs the broker not to mention it to prospective buyers, the broker should: | Disclose the problem to prospective buyers, as it is a material defect |
| 23 Most real estate professionals would agree that ethics should not conflict with the desire to make a profit because: | Ethical behavior fosters trust, long-term relationships, and positive reputations in the industry |
| 24 The owner of a house agreed to lease his home to a friend for two years at $1,200 per month, and they shook hands on the agreement. Which of the following is true about this arrangement? | The lease is unenforceable because there is no written agreement |
| 25 A real property line that runs from a given point North 90° East will run in the direction of: | East to West |
| 26 In the Public Land Survey System, how many acres are in a quarter section? | 160 acres |
| 27 An electric utility company has the right to maintain their poles, lines, and other equipment along the rear of a property. What is this right called? | Easement |
| 28 Which three types of special purpose deeds may be used to convey property when a property owner is unable to sign the deed? |
1. Personal Representative’s Deed: Utilized when a property owner has passed away, this deed allows a court-appointed personal representative to transfer the decedent’s property to heirs or buyers. 2. Trustee’s Deed: Employed when property is held in a trust, enabling the trustee to convey property on behalf of the trustor, especially if the trustor is incapacitated or deceased. 3. Guardian’s Deed: Applied when conveying property on behalf of a minor or an individual declared legally incompetent, allowing a court-appointed guardian to manage or transfer the ward’s property. |
| 29 Jean-Paul, and Michelle are in the process of purchasing their first home. When will the actual transfer of title occur? | The actual transfer of title occurs at the closing of the real estate transaction. During the closing, all necessary documents are signed, and ownership of the property is officially transferred from the seller to the buyers. In most jurisdictions, this transfer is completed when the deed is delivered to the buyers. (Record) |
| 30 When a person owns property or holds vested ownership rights in a property, what does this mean? | It means the person has complete and unconditional ownership of the property. (Title) |
| 31 A seller’s marketable title to real property may best be provided by which type of deed? | General warranty deed |
| 32 Can deed restrictions control lot size, building size, and the appearance of exterior improvements? | Yes, deed restrictions can control lot size, building size, and the appearance of exterior improvements. |
| 33 Is the earnest money deposit a legal requirement in Florida real estate transactions? | No, it is not required by law but is a common practice |
| 34 Who is responsible for supplying the closing summary required by Chapter 720 of the Florida Statutes for a property governed by a homeowners association? | The homeowners association |
| 35 The best descriptive phrase associated with property held by tenancy in common is: | “Undivided interest” |
| 36 The homeowners association disclosure summary required by Chapter 720 of the Florida Statutes must be supplied by: | The seller |
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37
When the Johnsons purchased their home, they bought and installed new kitchen counters and cabinets. Before installation, these items were considered personal property. After installation, they become: |
Fixtures |
| 38 What term refers to a landowner’s right to use water that flows past their property, as long as the landowner does not divert, pollute, or impair the water used by others? | Riparian rights |
| 39 Florida real estate license law obligates all licensees to disclose any known facts that materially affect the value of ________. | The property’s market value (Residential Real Property) |
| 40 Improvement of professional standards within the real estate industry is important to most real estate professionals because ________. | It ensures ethical practices and promotes trust (Unethical) |
| 41 Mortgage interest charges on a principal residence are considered a ________. | Tax-deductible expense |
| 42 Homeowners with a disability, including blindness, qualify for an additional $500 exemption from the asset value of ________. | The primary residence (Homestead Property) |
| 43 The market value ______ when the rental value of a property increases. | Increases (Rises) |
| 44 A licensee is preparing a report using information about sold properties, properties currently on the market, and recently expired properties. She is most likely preparing ________. | A comparative market analysis (CMA) |
| 45 An appraiser given the task of approaching the county courthouse would most likely use the ________. | Public records (Cost Depreciation Approach) |
| 46 A Broker's Price Opinion (BPO) is most commonly used for ________. | Estimating the value of a property for lenders, banks, or investors (Written) |
| 47 Lisa is a sales associate with Sunny Side Realty. She did a Broker's Price Opinion (BPO) for GT&C Bank. The invoice she prepared listed her ________. | Fee for the BPO service (Services as an Appraisal) |
| 48 This is a violation of Chapter 475, F.S., and could result in disciplinary action against Lisa when a home is appraised using the comparable sales approach to value ________. | Based on inaccurate or misleading sales data |
| 49 The difference between the market value of a property and its assessed value is that the market value ________, while the assessed value ________. | Is the most probable selling price of the real estate interest; is used in setting ad valorem taxes |
| 50 If a real estate licensee conducts an actual real estate appraisal, he or she must comply with ________. | Uniform Standards of Professional Appraisal Practice (USPAP) |
| 51 A given area in a community has an excess of available office space. This will most likely create a ________. | Decrease in rental rates for office spaces (Buyers Market) |
| 52 When applicable, the intangible tax is usually entered on the closing disclosure as a ________. | Buyer’s expense (Debit to the Buyer) |
| 53 Formally called the Federal Home Loan Mortgage Corporation, the primary goal of Freddie Mac is to ________. | Ensure a stable housing market by buying and selling mortgage-backed securities |
| 54 Which statement is true about each monthly principal and interest payment made on a conventional amortized loan? | The interest portion decreases, and the principal portion increases over time |
| 55 Buyer Barb is trying to secure a government-insured loan for the home she is purchasing. For what type of mortgage is she trying to qualify? | FHA loan ( Federal Housing Administration) |
| 56 The outstanding loan balance plus accrued interest is payable in full. This is referred to as ________. | Balloon payment |
| 57 Under the _____ theory of mortgages, the ownership passes to the lender when the loan is made. | Title theory |
| 58 The property tax disclosure summary must be ________. | Provided to the buyer before closing (Be Presented) |
| 59 When a broker is employed by a buyer-broker agreement, the broker ________. | Represents the buyer’s interests exclusively (Single Agent) |
| 60 A contract is an offer by one party and an acceptance by the other party, which is called mutual assent. When the parties agree to all terms of a contract, this is often referred to as ________. | Meeting of the minds |
| 61 Richard rented a house for a year with the option to buy. A small percentage of his rental payment was reserved for a down payment in case he decided to buy. He decided to exercise his option and buy the house. What type of contract was Richard initially engaged in? | Unilateral contract (Bilateral Contract) |
| 62 A broker lists a home, and the owner admits that there are problems with the septic system but suggests that she ought not to mention them to prospective buyers. What is the broker’s legal obligation? | Disclose the material defect to prospective buyers (Tell) |
| 63 Most real estate professionals would agree that ethics should not conflict with the desire to make a profit. What is the primary reason ethical conduct is essential in real estate? | It helps build trust and long-term relationships with clients (Good Business) |
| 64 The owner of a house agreed to lease his home to a friend for 2 years at $1,200 per month. They shook hands on the agreement. Is this lease legally enforceable? | No, because leases longer than one year must be in writing to be enforceable |
| 65 John owned real property prior to his marriage to Sofia. After they are married, how is this property classified? | Separate property |
| 66 A principal owns lots in an upscale subdivision and has directed a licensee not to show the lots to people of a particular sex, race, or religion. What should the licensee do? | Inform the principal that the request is illegal and refuse to comply |
| 67 You hold a valid, current, and active sales associate license. One of your best clients, who has purchased three houses in the past year, calls from Atlanta saying he has someone interested in purchasing a house you have listed for $500,000. He also mentions that he has spent a considerable amount of money entertaining the buyer and convincing him to drive down to look at the property. He asks for a referral fee. How should you respond? | Inform him that paying an unlicensed individual a referral fee is illegal |
| 68 The Florida Real Estate Commission (FREC) has the authority to: | Deny, suspend, or revoke real estate licenses |
| 69 What is a Notice of Non-Compliance in Florida real estate regulation? | A warning issued for a minor, first-time violation of real estate law |
| 70 A real estate broker’s commission for a transaction is: | Determined by an agreement between the broker and their client |
| 71 Savannah is working for Broker Brown, but she also wants to sign on with Broker Jones. Why is she only allowed to work with one broker? | Florida law prohibits sales associates from working for more than one broker at a time |
| 72 What kind of real estate advertising statements are prohibited under Florida law? | Misleading or false statements about a property or service(Not Legal or Proper) |
| 73 All advertising statements that do not include the licensed name of the brokerage are considered: | A violation of Florida real estate law |
| 74 A broker has not had much luck selling a particular property, so he decides to change his advertising in such a way that is misleading in form and content. What are the possible consequences of this action? | It is a violation of Florida real estate law and could lead to disciplinary action |
| 75 Over which type of escrow accounts does the Florida Real Estate Commission (FREC) have jurisdiction? | Only escrow accounts maintained by real estate brokers |
| 76 A broker receives an earnest money deposit on a home sale. Within how many days must the broker deposit the funds into the escrow account? | Within three business days of receiving the funds |
| 77 What is a kickback (or rebate) in real estate? | A payment made to an unlicensed person for a real estate referral |
| 78 A broker represents a seller as a single agent. The seller informs the broker that the roof leaks, but there is no visible water damage inside the house. What is the broker’s legal obligation? | The broker must disclose the roof leak to potential buyers |
| 79 A seller has her property listed for $85,000 but tells the broker she is desperate to sell and will accept as little as $74,500. She even mentions this while the broker is showing the house to a prospective buyer. What should the broker do? | Remain silent and maintain the seller’s confidentiality |
| 80 A broker listed a house and is the single agent of the seller. A prospective buyer wants to view the home and also wants the broker to represent him. What must the broker do to legally assist both parties? | Obtain written consent from both parties to transition to a transaction broker |
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81
On July 1, Abrams lists his home on a 90-day exclusive contract with Broker Baker. On July 30, Abrams’s Chapter 7 bankruptcy claim is approved. On August 6, the broker finds a ready, willing, and able buyer for the home. Can the broker claim a commission from Abrams? |
No, because the listing agreement was automatically terminated upon the seller’s bankruptcy |
| 82 By issuance of a Final Order, a broker's license was revoked by the Florida Real Estate Commission (FREC). What happens to the licenses of the sales associates working under that broker? | They are placed on involuntary inactive status |
| 83 If a new sales associate fails to complete the post-licensing education requirement within the allotted time frame, what will happen to the initial license? | The license will become null and void |
| 84 Jamie works as an unlicensed personal assistant for Sunshine Realty. Which of the following tasks is she allowed by law to perform? | Answer the phone and schedule appointments |
| 85 An owner of a 20-unit condominium complex informs the salaried manager that he will be out of the country for 6 months and would like a friend to rent the apartment during that time. The manager agrees to handle the 6-month rental. Does the manager need a real estate license? | No, as long as the manager is salaried and the rental is under 1 year |
| 86 The Florida Administrative Code that expands the provisions of F.S. Chapter 475 is: | Chapter 61J2, F.A.C. |
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87
Tom's clients and customers appreciate his expertise in explaining property taxes and the homestead exemption, as well as helping them find financing options. Based on his services, Tom is primarily assisting his clients with which aspect of real estate? |
Residential real estate transactions/Specialis |
| 88 When a sales associate is authorized to negotiate a property sale, he or she has the authority to: | Negotiate terms but must have the broker sign the contract/Owner-Developer |
| 89 A developer wants to build five groups of townhouses on a 15-acre parcel. He will devote the land not used for construction of units to recreation areas, gardens, parking areas, etc. What type of development is he proposing? | Planned Unit Development (PUD) |
| 90 In real estate, property management has become more popular because of: | Increased demand for rental properties/Absentee Ownership |
| 91 A broker in Florida must do all the following EXCEPT: | Complete a 2-year real estate program at a community college |
| 92 If after 24 months a sales associate has not completed the requisite post-licensing education, they can requalify for licensure by: | Taking and passing the state licensing exam again |
| 93 The primary purpose the first Florida Real Estate Commission formed in 1927 was: | To protect the public (1927) |
| 94 Before Esther died, she named her friend JoAnne as her personal representative in her will. To sell the real estate Esther owned, JoAnne is: | Authorized to sell the property as the personal representative/not required to obtain a real estate license. |
| 95 Vanessa's license has been involuntarily inactive for 20 months. She has not completed the Continuing Education courses required to renew her sales associate's license. What must she do to reactivate her license? | Complete the required Continuing Education courses and submit a reactivation request (take a 28-hour reactivation course) |
| 96 Compensation collected in connection with a broker price opinion (BPO) or comparative market analysis (CMA) constitutes a brokerage activity and must be paid to the: | employing or sponsoring broker (sales associate's Broker/brokerage.) |
| 97 Once licensees have completed the required post-licensing education after becoming active real estate licensees, they must next complete: | Continuing education every two years(at least 14 hours of continuing education during every 2-year license period for active and inactive licensees.) |
| 98 The legal rights and responsibilities of real estate licensees are established by which of the following? | Chapter 475, Florida Statutes |
| 99 Which statement is NOT true about a transaction broker? | A transaction broker owes loyalty only to the party that hired them.(property and are not readily observable to the buyer.) |
| 100 When there is a transition from a single-agent broker to a transaction broker, what must the single-agent broker do? | Present the Consent to Transition to Transaction Broker disclosure and obtain the principal’s written consent.(provide the client with the form required by statute and obtain his/her written consent.) |
| 101 When a broker employs a licensed real estate sales associate, the sales associate has: | A fiduciary duty to the broker, but not to the public.(the same obligations to the broker's clients and customers as the broker.) |
| 102 Which of the following is true about a no-brokerage (nonrepresentation) relationship? | The licensee must present all offers and disclose all known material facts.(The broker is not an agent of either the buyer or the seller.) |
| 103 A broker lists a home that she knows would be perfect for her mother. The home is being sold due to the death of the owner, and the broker knows the heir (who lives in Pennsylvania) is willing to accept an offer well below the listing price. What must the broker do if her mother wants to submit a low offer? | Disclose her relationship to the buyer in writing and obtain the seller's written consent before proceeding.(The broker should tell her mother nothing, but present to Owner any offer that his friend wishes to make.) |
| 104 A buyer is a broker's principal. Legally, the sales associates who work for the broker are: | Subagents of the principal(also legally bound by the broker's agency obligations.) |
| 105 Bob Broker listed acreage for $90,000. Jim verbally offered $88,000. Another buyer, who knew about Jim's offer, made an offer of $93,000. The broker drew up a written contract for $93,000 but did not inform the owner about the offer for $88,000. Which of the following is correct? | The broker violated the law by failing to present all offers to the seller, including the verbal offer.(Broker should have submitted both offers to Owner.) |
| 106 Eileen Weinstein, Juan Gomez, and Brian Jones own real estate brokerages that are on the three corners of one busy intersection. They meet and decide they will all raise their commission rates to the same percentage and try to convince other area brokers to agree to do the same. What are they guilty of? | Price fixing, which is a violation of antitrust laws |
| 107 Which of the following is NOT a legal form of advertising for a real estate brokerage? | Advertising the brokerage's services without including the name of the broker or brokerage firm.(an internet ad that shows 36 pictures of the inside and outside of a property and lists the sales associate's phone number.) |
| 108 For brokers, the term "immediately" as it applies to escrow deposits means: | By the end of the next business day after receiving the deposit.(no later than the end of the third business day following receipt.) |
| 109 Julie, a sales associate, terminates her employment with ABC Realty and goes to work for XYZ Realty. She takes with her originals of all the listing contracts she obtained for ABC Realty. Which of the following is correct? | Julie must return the original listing contracts to ABC Realty as they belong to the brokerage. (Julie is subject to a charge of larceny.) |
| 110 Broker Bill owns Sunnyside Realty. His father owns Elite Developers. They and their staff both work from the same office. Which of the following is correct? | Broker Bill may operate both businesses from the same office as long as there is no confusion between the two.(A sales associate in this situation may be registered, and have an active license with, one realty firm or one owner-developer.) |
| 111 Which of the following business entities CANNOT register as a real estate brokerage? | A general partnership owned by a non-licensed individual.(joint venture) |
| 112 A prospective renter purchases a list of rental properties from a broker for $100. The prospective renter is unable to find a suitable property and requests a full refund within 30 days. The broker gives him $50, and the 30-day limit expires. Could the broker be subject to disciplinary action? | Yes, because the broker did not provide a full refund as requested within the 30-day period. (Yes, because Broker should have refunded at least $75.) |
| 113 A buyer who purchased a home through Deerwood Realty asks the broker to suggest a contractor to remodel the kitchen. The broker complies by recommending a contractor who pays the broker for referrals. Assuming that all parties are notified prior to the broker receiving a payment, which statement is correct? | The broker must obtain written consent from the buyer and contractor before receiving any referral fee. |
| 114 A brokerage firm advertises listings but omits the name of the brokerage firm. These ads are called: | Blind advertisements |
| 115 A Florida-based title company will hold the escrow funds for a real estate sale. The sales associate must include which three items on the purchase agreement? | The name, address, and phone number of the title company or the escrow agent |
| 116 A broker who was found guilty of publishing deceptive information was given the applicable criminal penalty. Considering these facts, the broker: | May be subject to disciplinary action by FREC, including a fine or suspension of their license.(is not subject to any civil proceedings, but may be subject to administrative penalties by the Florida Real Estate Commission.) |
| 117 Brad, a sales associate, and his broker had a falling-out, and Brad decided to walk out and go half a mile down the road to work for another broker. Which of the following is a correct statement? | Brad may not work for the new broker until the Florida Real Estate Commission (FREC) processes his new employment.(The sales associate must be registered with FREC under the new broker before working there.) |
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118
According to statute, a real estate brokerage office must have all the following except: |
At least one working phone line.(a telephone, desk and checking account) |
| 119 Sunshine Realty advertises a rental property with 15,000 square feet of warehouse space. However, this advertised square footage includes the parking lot, and the actual warehouse space is only 10,000 square feet. What has the broker committed? | A violation of Florida real estate law by misleading the public with inaccurate information.(a first-degree misdemeanor punishable by suspension or revocation, a $1,000 fine and one year in prison) |
| 120 Which of the following is NOT true of the Real Estate Recovery Fund? | The fund acts as insurance for real estate licensees who are sued. |
| 121 Mr. Allman, a real estate licensee, served a term in prison for a crime not related to his real estate brokerage. Mr. Allman's license may be: | Suspended until the time for renewal, depending on the nature of the crime. |
| 122 Which of the following is NOT a potential reason the Florida Real Estate Commission (FREC) would deny an application for licensure or renewal of a license? | The applicant is not a U.S. citizen. |
| 123 A landlord inspects his rental property after the tenant moves out. He finds damage that is beyond normal wear and tear and decides to deduct some money from the security deposit to cover the damage. The tenant has _______ days to object in writing to the deduction. | 15 days |
| 124 The owner of a condominium development has hired a real estate licensee to sell units for him that will be built over the next year. He tells the licensee that people of a certain sex, race, or religion should be told that all the units are sold. What should the licensee do? | Withdraw from the agreement and refuse to deal with the owner, as the owner's instructions violate fair housing laws. |
| 125 What is the final legal act in an eviction procedure? | The landlord removes the tenant’s personal property from the rental unit after being served a writ of possession. |
| 126 Which of the following is NOT considered a physical component of real property? | Alluvial rights |
| 127 Susan, a sales associate, moves from ABC Real Estate agency to Cedar Landing Real Estate agency. What must she do to avoid a gap in licensure? | Inform the Florida Real Estate Commission (FREC) of her new employer's name and address within 10 days. |
| 128 Which of the following is NOT one of the five general property rights in the "bundle of rights"? | Proscription |
| 129 The person with a ____________ has all the rights in the bundle of rights. | Fee simple estate |
| 130 Ad valorem taxes must be presented to a prospective Florida home buyer as the: | Property tax disclosure |
| 131 What disclosure about a Community Development District (CDD) must be provided in a sales contract for property within the CDD? | The CDD's power to levy taxes and special assessments |
| 132 A "tenancy by the entireties" in real estate is best described as: | A single conveyance, title to real property is jointly held by a husband and wife, with both having equal interest. |
| 133 Williams grants an estate to Kirkpatrick "for the life of Kirkpatrick." When Kirkpatrick dies, the estate will revert back to Williams or his heirs. The type of estate Kirkpatrick holds is a: | Life estate |
| 134 Which of the following is a fixture? | Ceiling fan |
| 135 A disclosure summary from seller to buyer regarding a mandatory homeowners' association is included in which Florida law? | The Homeowners' Association Disclosure, Chapter 720, F.S. |
| 136 Which of the following is NOT considered a physical component of real estate? | Timber rights |
| 137 Best friends Eduardo and Daniel buy 20 acres with a plan to build rental apartments. From their heirs' point of view, which would be the best way for them to hold title? | Tenants in common |
| 138 If something is permanently affixed or connected to a property, it is a: | Fixture |
| 139 A mortgage lien is an example of what type of lien on property? | Voluntary lien |
| 140 Mr. and Mrs. Martinez buy a lot in a subdivision where they want to build a house. On inspecting the deed, they learn that the house must be at least 1800 square feet. This is an example of a: | Deed restriction |
| 141 Mr. Denton died intestate, and there are no known heirs. The probate court appointed an individual to settle Mr. Denton's affairs. When this individual sold Mr. Denton's home, what type of deed was used to formalize and record the transfer of title? | Personal representative's deed |
| 142 The only way to remove an easement is by the decision reached by a court. | False |
| 143 When property is transferred, the seller provides a guarantee that he owns the property and has the right to sell it. This is called the: | Covenant of seisin |
| 144 A title company did a title search and provided an abstract of title, which is a condensed history of title. | True |
| 145 An owner who sold property included a clause in the deed that one half of the property must remain in its natural state for wildlife habitat. This is an example of a: | Deed restriction |
| 146 Mr. Atkinson leases space for his computer repair shop. He will pay the rent, and the landlord will cover the utilities, taxes, insurance, and repairs. He has a: | Gross lease |
| 147 Of the liens listed below, which is the superior lien that takes priority over the others? | Property tax lien dated January 1, 2020 |
| 148 The legal description most often used in a platted subdivision is: | Lot and block |
| 149 The metes and bounds method requires a: | Point of beginning |
| 150 Which of the items below is not required to be included in a valid metes and bounds legal description? | Reference to a conspicuous monument, such as a tree or rock |
| 151 A listing contract must include all the following EXCEPT: | School district information |
| 152 In an agreement between a buyer and a broker, all the following are usually included EXCEPT: | Seller’s obligations |
| 153 Of the following, which one is NOT necessary for a real estate contract to be valid? | Recording |
| 154 Jefferson signs a contract for the purchase of Madison's home. This is a bilateral contract because: | It contains promises to perform by both parties |
| 155 A broker who has an open-listing agreement with a seller finds a qualified buyer but is hospitalized before the offer can be delivered. The buyer later contacts the seller directly and the two complete the sale with the help of an attorney. Can the broker still claim a commission? | Yes, because the broker was the procuring cause of the sale |
| 156 A lawsuit in which a plaintiff seeks to have the court force the other party to perform according to the terms of a contract is called a: | Suit for specific performance |
| 157 In real estate law, the Statute of Frauds refers to the requirement that: | Certain contracts must be in writing to be enforceable |
| 158 For homes built prior to 1978, which of the following is required in a lead-based paint disclosure? | Sellers and lessors must disclose the potential presence of lead-based paint in residential dwellings |
| 159 The lead-based paint disclosure requirement applies to residential properties built prior to what year? | 1978 |
| 160 In the U.S., states follow different legal theories to determine property ownership under a mortgage. What legal theory does Florida follow? | Lien Theory |
| 161 George has a mortgage on his home with a local bank. He has a deed stating he is the owner of the property, but he still owes most of what he borrowed to the bank, and the remaining mortgage balance is an encumbrance on the title when George sells his home. George lives in a state that recognizes which mortgage theory? | Lien Theory |
| 162 Approximately how many discount points are needed to raise the lender's yield on a mortgage by 1%? | 8 points |
| 163 When a mortgage’s cost includes items such as interest, mortgage insurance, and loan origination fees (points) stated on a yearly basis, it is known as the: | Annual Percentage Rate (APR) |
| 164 Mr. and Mrs. Grey are thrilled to be making the last payment on their mortgage. The lien on their property can now be released through a: | Defeasance clause |
| 165 Which of the following is NOT true regarding an adjustable rate mortgage (ARM)? | They have a low interest rate |
| 166 Regarding adjustable-rate mortgages, which statement is INCORRECT? | The bank offering the mortgage is required to allow an assumption of the mortgage by a new purchaser |
| 167 Mortgage lenders who supply mortgage funds directly to borrowers are known as: | Primary lenders |
| 168 Of the following statements, which is INCORRECT concerning a VA loan? | A VA loan requires a minimum down payment. |
| 169 When Andy and Sarah bought their home, they qualified for a loan that was $5,000 less than what the seller would accept. Fortunately, they got a Purchase Money Mortgage (PMM) to cover the $5,000. To whom will they make payments on the PMM? | The seller of the property |
| 170 Which of the following best describes the primary purpose of Fannie Mae? | To purchase residential real estate loans to maintain a uniform flow of funds in the mortgage market |
| 171 How is the state documentary stamp tax on a deed typically reflected on the Closing Disclosure? | Debit to the seller |
| 172 Who typically pays for closing expenses in a real estate transaction? | The buyer and seller, according to the terms of the contract |
| 173 What does the "highest and best use" of a parcel of land refer to? | The most effective utilization economically |
| 174 How is the capitalization rate (cap rate) calculated in real estate? | Divide the net operating income by the sales price |
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175
When using the comparison approach, if the subject property has three bedrooms and a comparable property has four bedrooms, and the appraiser has determined that an extra bedroom is worth $7,000, what adjustment should be made? |
Subtract $7,000 from the comparable property |
| 176 Under Florida Statute 475.612, how must real estate licensees refer to a comparative market analysis (CMA) they perform? | CMA (Comparative Market Analysis) |
| 177 How is the comparative sales approach similar to the Comparative Market Analysis (CMA)? | Both involve making adjustments to the comparable properties |
| 178 When appraising a typical 20-year-old home in a rural community that has not changed much in two decades, with which type of depreciation is the appraiser most likely concerned? | Physical depreciation |
| 179 What is leverage in real estate? | The system of using borrowed funds to finance the purchase of an asset |
| 180 What is the homestead tax exemption amount for Florida primary residences, and how is it applied? | $50,000 is subtracted from the assessed value to calculate taxable value |
| 181 One goal of the National Association of Realtors (NAR) is to: | Raise the professional and ethical standards of real estate licensees |
| 182 Karen’s sales specialty involves knowledge of regulated land use, environmental considerations, transportation, labor costs, and utility charges. Her field of specialty is: | Industrial |
| 183 Which of the following is generally NOT a responsibility of a property manager? | Representation of the tenant |
| 184 USA Bank contacted Aubrey, a sales associate with Blue Skies Realty, to do a Broker Price Opinion (BPO). The bank paid Aubrey directly for the BPO. This is: | llegal, since the sales associate violated Chapter 475, F.S. by receiving direct payment |
| 185 When must sales associates complete their post-licensing education course? | Before their first renewal of their license |
| 186 What must a sales associate do if they do not successfully complete the post-licensing course but want to remain in the real estate business? | Repeat the pre-licensure class and pass the end-of-course examination as well as the state licensure examination again |
| 187 Which Florida Statutes define the general legal practice and procedure for the Department of Business and Professional Regulation (DBPR) and the licensees of all professions, including real estate? | Chapter 475 and Chapter 455 |
| 188 Julie is employed by Sand Dollar Syndicators. She sells and leases only properties owned by Sand Dollar. Her earnings are based on her sale and lease activity. According to Florida law, is Julie exempt from licensing requirements? | No, she must comply with all licensing requirements |
| 189 Which Florida Statute gives the Florida Real Estate Commission (FREC) the authority to discipline Florida-licensed real estate professionals? | Chapter 455 |
| 190 If Doug, a real estate broker, believes that a rule or guideline significantly affecting him is not valid and should be changed, what can he do? | Petition the Florida Real Estate Commission (FREC) for an administrative determination |
| 191 A sales associate lists a home that would be ideal for a friend. The home is for sale because one of the owners died recently, and the sales associate knows the other owner will accept a significantly lower bid than the listed price. How should the licensee handle the situation? | The licensee should not tell his friend anything, but present any offer his friend wishes to make to the owner. |
| 192 A developer has a 75-acre subdivision with lots ready to sell, but the land is encumbered by a blanket mortgage. The broker does not inform the buyer that the lot can only be released from the blanket mortgage if he pays the lender $24,000 in cash. Which of these is a CORRECT statement? | Both the broker and the developer are in violation of Chapter 475, Florida Statutes. |
| 193 An owner is selling a small vacant lot free and clear for $15,000. He gives a broker an option to buy the lot at that price or find a purchaser. The broker pays $1,000 for the option. Before the option expires, the broker sells the property to a third person for $21,000. The broker advised the buyer during the negotiations that she was the optionee. Which of these is a TRUE statement? | The broker may keep the amount of money above and beyond the option purchase price, after paying the appropriate closing costs. |
| 194 A transaction broker is best described as: | One who provides limited representation in a brokerage transaction between buyer and seller. |
| 195 A broker has an exclusive-right-to-sell contract on a large home. The seller informed the broker that the skylight over the dining room sometimes leaks if there is heavy rain. The broker sells the unit to a buyer during a dry season and fails to mention the leaky skylight. The buyer resells the unit in one year and makes a profit. Could the broker face possible disciplinary action for failing to tell the buyer about the leaky skylight? | Yes, because the broker had the responsibility to inform the buyer of material defects in the property. |
| 196 A sales associate has a 20-acre parcel of land for sale and is aware there is a cloud on the title. When a purchaser is found, he fails to mention the cloud, hoping it will be cleared before closing. Which statement about the sales associate's action is CORRECT? | It is deemed fraudulent and dishonest dealing by trick or scheme. |
| 197 A broker can advertise listed property for sale without disclosing the name of the brokerage firm in the advertisement when which of the following applies? | Never, as all real estate advertisements must include the licensed name of the brokerage firm. |
| 198 Tom, a sales associate, works for both ABC Realty and XYZ Realty. This arrangement is: | In violation of the Florida Real Estate Licensure Law. |
| 199 Compensation to an unlicensed personal assistant must be paid by: | Salary |
| 200 Will is a licensed sales associate with Islands Realty. His broker is the only licensed broker in the firm. A month ago, the Florida Real Estate Commission suspended the broker's license for a period of six months due to dishonest dealings. Will's best course of action is to: | Immediately identify a new employer and request that the FREC register his license to that new employer. |
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