FLORIDA REAL ESTATE EXAM TEST QUESTIONS
AND CORRECT ANSWERS LATEST UPDATE 2025-
2026|GRADE A+
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? - Answer-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? - Answer-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? - Answer-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? - Answer-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? - Answer-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? - Answer-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? - Answer--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? - Answer-- 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 - Answer-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.
AND CORRECT ANSWERS LATEST UPDATE 2025-
2026|GRADE A+
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? - Answer-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? - Answer-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? - Answer-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? - Answer-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? - Answer-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? - Answer-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? - Answer--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? - Answer-- 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 - Answer-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.
