Extend Set of FREC Exam
| Term/Front | Definition/Back |
|---|---|
| 1 When a sales associate is in the process of changing from one employer to another, his or her license: | Ceases to be in force until the license is registered with the new employer. |
| 2 Susan pays a broker $100 for a list of available rental properties. She is unable to find anything suitable and requests a full refund within 30 days of purchasing the list. The broker sends her $50. Is the broker subject to disciplinary action? | Yes, because the broker is required to provide a full refund if requested within 30 days. |
| 3 Choose the statement that is INCORRECT regarding the placement of an escrow deposit with a title company or with an attorney: | The broker is not required to keep track of the deposit once it is placed with a title company or attorney. |
| 4 Which of the following is TRUE about this statement? | The seller's broker must give notification no later than 15 business days of the verification. |
| 5 A buyer purchases a home through a broker, and the buyer's $20,000 binder deposit is in the broker's escrow account. The buyer tells the broker that she wants her escrow money to be placed in an interest-bearing account. What can the broker do? | The broker can transfer the funds after all parties have agreed, in writing, as to who will receive the interest in the event of either a closing or default. |
| 6 Williams, Johnson, and Ortez are the only licensed brokers in Bay Lake. They meet and agree to set their commission rates at 7.5% or more. Do they have a legal agreement? | No, because it violates the Anti-Trust Laws of the United States. |
| 7 Which is NOT an acceptable place for a broker to deposit escrow funds? | Any licensed real estate attorney in any state. |
| 8 George is looking for rental space and pays a fee to a broker for a list providing rental information. George never finds a suitable rental. As long as he makes a timely demand, George is entitled to a refund of how much of the fee? | 75% |
| 9 Choose the INCORRECT statement regarding a broker's escrow account: | Binder deposit and personal or brokerage funds up to $6,000 may be kept in the escrow account. |
| 10 Choose the statement that is TRUE regarding kickbacks and rebates: | If a broker is to receive a kickback or rebate, all parties involved must have been advised prior to the time of the placement of the kickback or rebate. |
| 11 When listing a seller's home, the broker tells the seller that Florida law requires her to charge a 7% commission. Which statement is CORRECT? | The broker has committed an illegal act, because commissions are not set by law. |
| 12 How many business days does a broker have to notify the FREC, in writing, of conflicting demands or of a good faith doubt? | 15 business days |
| 13 A licensed broker was found guilty of culpable negligence in a real estate sale. The broker made full restitution to the affected party. The Florida Real Estate Commission may: | Suspend the individual's license. |
| 14 Aaron has remodeled an older home and decides to rent it out. He receives the first month's rent and a security deposit. There are three ways he can handle the security deposit. Which is NOT one of them? | Keep the money in a personal account for convenience as long as it is clearly labeled for security deposits. |
| 15 Everything that is permanently attached or connected to land is: | A fixture. |
| 16 When a homestead is owned by a husband and wife as tenants-by-the-entireties, a contract for sale can only be enforced if: | Both the husband and the wife sign the contract. |
| 17 Buyers in a Homeowners Association (HOA) receive a disclosure summary. Two of the items included are: | The existence of restrictive covenants and whether there are any assessments imposed by the association. |
| 18 The best description of a tenancy in common is: | Fee ownership by two or more people concurrently, with no right of survivorship. |
| 19 When determining whether an object is a fixture, the legal tests do NOT include: | The size of the item. |
| 20 Joe and Judy have riparian rights because their property is on: | A river or stream. |
| 21 In Florida, if a homestead is in only one spouse's name, or if it is co-owned by a married couple, then: | Both spouses must sign the real estate sales contract. |
| 22 Of the following, which is not a statutory deed? | Guardian's deed |
| 23 What type of deed legally conveys a minor's property after authorization by the court? | Guardian's deed |
| 24 For the past 25 years, the Hills have been accessing their property by crossing a neighbor's land. Technically, the Hills may have obtained an easement on their neighbor's property by: | Prescription |
| 25 When using the Government Survey System, the initial primary north-south reference line is called the: | Principal meridian |
| 26 In a metes and bounds legal description, the direction "N 10 degrees E." would be exactly opposite from the direction:S | S 10 degrees W |
| 27 A seller employs a broker under an open-listing contract. The broker finds a qualified buyer but has a heart attack and is hospitalized for several weeks. Meanwhile, the seller completes a sale to a buyer who saw the listing and uses only the buyer's attorney at the closing. The broker is in a strong position to claim a commission in this case because: | The broker was the one who initially found the buyer for the seller |
| 28 Which of the following elements is not necessary to make a real estate contract valid? | Recording |
| 29 A buyer made an offer to purchase a horse ranch near Ocala. The buyer died before learning that the offer was accepted. Which of these statements correctly describes the contract's validity? | he buyer's death terminated the offer by operation of law before the contract arose. |
| 30 A notification contained in property tax disclosures is that: | The seller's property tax amount might not be the amount the buyer may be obligated to pay next year. |
| 31 Competent parties Williams and Moore signed a contract for the sale of Moore's lakeside home. Williams paid $5,000 in earnest money, closing costs were determined, and the closing was set for July 1. On June 15, Moore declared the contract invalid and refused to sell. Moore cannot do this without being subject to legal action because: | Moore had entered into a valid contract and asserted no basis for declaring it invalid. |
| 32 Romano agrees to list his home with Jones, a broker, for $90,000. Romano agrees that Jones can keep any money in excess of the $90,000 listing price. This agreement is: | A net listing |
| 33 In order to be enforceable, a real estate sales contract must be: | Written |
| 34 A buyer signs an agreement with a broker to find a home for his family. This buyer-broker agreement is: | An employment contract with the buyer |
| 35 When legal contracts use the term "consideration," they refer to: | An act, promise, or monetary compensation given in exchange for something |
| 36 Which of these is an INCORRECT statement about the ethical and legal constraints on the activities of Florida real estate brokers? | A broker should withhold facts that materially affect the value of the property and are not readily observable to the buyer. |
| 37 Each discount point paid on a monthly amortized 25-year mortgage held to maturity raises the effective interest rate on a loan by approximately: | 1/8% |
| 38 As a general rule of thumb, each discount point paid to the lender will increase the lender's yield (return) by approximately: | 1/8 of 1% |
| 39 If this clause is present in a mortgage, the lender has the power to declare the entire unpaid mortgage amount due and payable. The lender may foreclose if the mortgagor does not pay. This clause is known as the: | Acceleration clause |
| 40 The statement that BEST describes the lien theory of mortgage is that: | The borrower holds title and remains in possession unless the lender exercises the right to foreclose. |
| 41 When a lender analyzes a mortgagee's ability to repay a loan, it is called: | Qualifying the buyer |
| 42 A mortgage whose interest rate increases or decreases periodically according to an economic index agreed upon in advance is a(n): | Adjustable-rate mortgage |
| 43 The _______________________ determines monetary policy in the U.S. by controlling the availability of money. | Federal Reserve System |
| 44 Choose the statement that is NOT TRUE about FHA loans. | The borrower must have a minimum credit score of 700. |
| 45 If a balloon payment is due on the date your loan matures, what kind of loan do you have? | Partially amortized mortgage |
| 46 Choose the law that requires that lenders disclose the annual percentage rate (APR) to borrowers. | Truth in Lending Act |
| 47 Who typically provides a Purchase Money Mortgage (PMM)? | The seller |
| 48 The purpose of the FHA insurance fund is to reimburse | Private lenders when an FHA-insured mortgage loan is determined to be uncollectible |
| 49 The secondary mortgage market's purpose is to | Provide a market for buying and selling existing mortgages |
| 50 Which items on a Closing Disclosure are typically paid by the buyer? | Recording of the deed and the buyer's attorney fee. |
| 51 The method used to compute adjustments for insurance and taxes on a Closing Disclosure is called: | Proration. |
| 52 Choose from the following list the one that is a characteristic of real estate: | Immobility. |
| 53 Regarding the appraisal of real property, which statement is incorrect? | When reconciling the indicated values obtained from the three approaches to value, the appraiser multiplies all three values. |
| 54 When real estate appraisers and other licensees perform appraisals in Florida, state law requires that they conform to the: | Uniform Standards of Professional Appraisal Practice. |
| 55 When a property loses value because of poor architectural designs and standards or outdated amenities, the loss is best known as: | Functional obsolescence. |
| 56 Sales associates normally formulate a Comparative Market Analysis (CMA) to help buyers and sellers make informed decisions on: | pricing a property. |
| 57 In estimating the market value of commercial properties, which type of appraisal is primarily utilized? | Income approach. |
| 58 Which housing expenses are tax deductible with respect to ownership of a primary residence? | Mortgage interest and property taxes. |
| 59 Properties in Florida with an assessed value of $50,000 or less that qualify for a homestead exemption are entitled to what amount of exemption? | The base $25,000 exemption. |
| 60 Jim owns a commercial, income-producing property. Which of the following expenses is NOT deductible on Jim's Federal Income Tax return? | Depreciation on the land |
| 61 _____________________ regulate the construction, alteration, and maintenance of structures in municipalities. | Building codes |
| 62 A homeowner wants to construct a lanai with a small swimming pool on the back of his home. The current distance between the home and the rear property line is 25 feet. If the lanai is built, the distance will be reduced to 5 feet. Local zoning requires a minimum 10-foot setback. What must the homeowner do to proceed legally? | Obtain a zoning variance |
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