)REAL ESTATE LICENSE EXAM QUESTIONSREAL ESTATE LICENSE EXAM QUESTIONS WITH ALL CORRECT ANSWERS

REAL ESTATE LICENSE EXAM QUESTIONS WITH ALL CORRECT ANSWERS 2 ways to calculate size (# acres) of tract - Answer-1. take 640 and divide by the denominator of each fraction in the legal description ex. the SW1/4, NE1/4, SE1/4, NW1/4 of a certain section contains how many acres? 640/4 = 160, 160/4 =40, 40/4 = 10, 10/4= 2.5 acres 2. multiply the denominators of each fraction together and divide by 640 4x4x4x4 = 256 640/256 = 2.5 acres generally longer description = smaller the # of acres in the parcel described 4 1/4s will always result in 2.5 acres 3 1/4s = 10 acre parcel if there is a legal description containing "and", calculate separately and add /.3 types of legal descriptions - Answer-(1) metes-and-bounds, (2) government survey system, and (3) lot and block description. /.A 25% service-disabled veteran, who is 75 years old, has been granted a homestead exemption on his $270,000 residence. How much is his total homestead exemption for *county* taxes? a. $25,500 b. $30,000 c. $55,000 d. totally tax exempt - Answer-$270k - $50k - $5k (at least 10% disabled veteran) c. $55,000 /.A 28.5-acre parcel of land in Orange County sells for $4,100 per acre. What is the documentary stamp tax on the deed? - Answer-4100 x 28.5 = 116,850 / 100 = 1,169 x .7 = 818.3 /.A borrower who is in default on a mortgage is allowed to prevent the lender from foreclosing on the property by paying the mortgagee the delinquent principal and interest, plus any expenses the mortgagee has incurred in attempting to collect the payments. This right is called a. novation b. a satisfaction of mortgage c. the equity of redemption d. an acceleration clause - Answer-c. the equity of redemption /.a broker has listed a seller property. the seller has disclosed to the broker that the ceramic tile is loose in the dining room, which is covered by an area rug (not visible). the broker has satisfied his legal obligation if he tells the buyer a. that the floor appears to be in good condition b. that the tile is loose c. that the buyer can order an inspection at his expense if he is concerned d. nothing unless asked - Answer-b. that the tile is loose /.A broker is preparing to open Sunnyside Realty as a sole proprietorship and is placing an order to have an entrance sign made. Which wording does NOT need to be included on the sign? a. sunnyside realty b. the brokers legal name c. licensed real estate broker d. 1000 sunset blvd - Answer-d. 1000 sunset blvd /.A broker lists a motel for $1,450,000. The listing contract specifies a 6.5% sale commission for the first $600,000 of selling price, 7% for the next $800,000, and 8% commission on all of the actual sale price exceeding $1.4 million. The broker has agreed to a 45-55 split if the property is sold by one of the broker's sales associates. The property is sold "in house." The broker pays the sales associate involved in the transaction 55% of the total commission. What is the sales associate's commission if the associate sells the motel for the listed price? - Answer-600k x 6.5% = 39k 800k x 7% = 56k 50k x 8% = 4k total = 99k x 55% = 54,450 /.a broker lists a property, a 7% commission is agreed to, and the listing is placed in the MLS. the sale commission is to be split as follows: 45% to listing broker and 55% to selling broker. a sales associate who works for the selling broker sells the property for 160k. the sales associates agreement with her employer calls for a 60% share to her of all commissions she brings to the company. how much is due the sales associate? - Answer-160k x 7% = 11,200 x 55% = 6,160 x 60% = 3,696 /.a broker receives conflicting demands concerning a roof inspection report. both the buyer and the seller claim the earnest money deposit. the broker must a. provide written notification to the FREC within 10 business days b. follow the written instructions of the brokers buyer or seller c. institute one of the statutory settlement procedures within 30 business days from the time the broker received conflicting demands d. request an escrow disbursement order from the DBPR - Answer-c. institute one of the statutory settlement procedures within 30 business days from the time the broker received conflicting demands NOTIFICATION TO FREC = 15 BUSINESS DAYS 15- FREC 30- SETTLEMENT PROCEDURES /.A broker's obligations to consumers with whom the brokerage firm has no brokerage relationship include the duty of a. full disclosure b. accounting for all funds c. loyalty d. limited confidentiality - Answer-b. accounting for all funds /.A builder purchases a residential lot for $42,000 and constructs a new house at a cost of $178,000. The builder later sells the property for $187,000. What is the builder's percentage of loss on the sale? - Answer-42k + 178k = 220k 187k - 220k = -33k 33k / 220k = 15% /.a building is valued at $150k when NOI is capitalized at a rate of 8%. NOI is 40% of effective gross income. EGI is - Answer-NOI / cap rate = value NOI / 8% = 150k NOI = 12k EGI x 40% = 12k 30,000 /.a business has a 5 year variable lease for a suite in an office park. the first year of the lease calls for rent of $21.50/sf based on a beginning index of 189. the index increases to 195 at the beginning of the second year. what is the new rental rate? - Answer-195/189 = 1.032 x 21.5 = $22.18 /.A buyer agrees to purchase a property with an existing mortgage lien. In which situation is the new buyer the only party responsible for the debt? a. assumption of an existing mortgage b. estoppel c. assumption with novation d. subject to the mortgage - Answer-c. assumption with novation /.a buyer has agreed to pay the state taxes associated with a new second mortgage loan of 31k. what is the total cost? - Answer-31k x .002 = 62 31k / $100 = 310 x $.35 = 108.5 62 + 108.5 = 170.5 /.a buyer is purchasing a house with a closing scheduled for april 22. annual property taxes are 2,652. sale contract states that the day of closing belongs to the buyer. calculate the property tax proration using the 365 day method - Answer-2,652 / 365 = 7.2 (daily rate) jan 31 + feb 28 + march 31 + april 22 = 112 x 7.2 = 806.4 credit buyer 806.4, debit seller 806.4 /.A case in which the interest paid for borrowed funds is less than the overall rate of return to an investor is an example of a. LTV ratio b. positive leverage c. negative leverage d. yield - Answer-b. positive leverage /.A check is a square with each side measuring a. 1 mile b. 6 miles c. 24 miles d. 36 miles - Answer-c. 24 miles /.A closing is scheduled for next week. The broker would like the closing agent to prepare a check payable to the sales associate for the associate's share of the commission. which statement is TRUE? a. the closing agent is required by law to make the check payable to the brokerage company b. the broker may telephone the closing agent with instructions on how to disperse the escrow funds due the sales associate c. the broker may enter into a written blanket authorization with the closing agent to always make the sales associates' commission payable to the associate d. the broker must give specific written instructions to the closing agent regarding the exact amount of commission due the sales associate for next week's closing - Answer-d. the broker must give specific written instructions to the closing agent regarding the exact amount of commission due the sales associate for next week's closing /.a commercial bank sold a group of 2k mortgages directly to fannie mae. this is an example of a. primary market activity b. secondary market activity c. loan correspondence d. intermediation - Answer-b. secondary market activity /.a commercial property has a PGI of 40k. v&c losses are 5% of PGI. additional op exp total 12,920. the property has a first mortgage requiring payments of 1,070.75 per month. using a cap rate of 12%, which amount is an accurate estimate of the property value? - Answer-NOI / cap rate = value NOI= 40k - 2,000 - 12,920 = 25,080 / 12% = 209,000 209,000 /.A concise summary of all income and expenses of a business for a stated period of time is the A. balance sheet B. income statement C. cash flow statement D. asset sheet - Answer-B. income statement /.A condo unit buyer has how long to cancel the purchase contract after signing an agreement with a developer? a. 3 days b. 10 days c. 15 days d. 20 days - Answer-c. 15 days /.a constitutional homestead is owned by a man who is head of a family consisting of himself, his wife, and 3 kids. man dies unexpectedly. after his death, a. the widow owns the homestead in fee simple b. by operation of law, the widow owns a life estate in the homestead, and the kids are vested remaindermen c. the homestead will be distributed according to FL's probate law d. the homestead will descend to the mans heirs as specified in his will - Answer-b. by operation of law, the widow owns a life estate in the homestead, and the kids are vested remaindermen /.a contract forms when - Answer-**buyer has filled out form with their offer criteria**; both parties have reached an agreement on price, terms, and conditions (an offer is in place) 2 ways to calculate size (# acres) of tract - Answer-1. take 640 and divide by the denominator of each fraction in the legal description ex. the SW1/4, NE1/4, SE1/4, NW1/4 of a certain section contains how many acres? 640/4 = 160, 160/4 =40, 40/4 = 10, 10/4= 2.5 acres 2. multiply the denominators of each fraction together and divide by 640 4x4x4x4 = 256 640/256 = 2.5 acres generally longer description = smaller the # of acres in the parcel described 4 1/4s will always result in 2.5 acres 3 1/4s = 10 acre parcel if there is a legal description containing "and", calculate separately and add /.3 types of legal descriptions - Answer-(1) metes-and-bounds, (2) government survey system, and (3) lot and block description. /.A 25% service-disabled veteran, who is 75 years old, has been granted a homestead exemption on his $270,000 residence. How much is his total homestead exemption for *county* taxes? a. $25,500 b. $30,000 c. $55,000 d. totally tax exempt - Answer-$270k - $50k - $5k (at least 10% disabled veteran) c. $55,000 /.A 28.5-acre parcel of land in Orange County sells for $4,100 per acre. What is the documentary stamp tax on the deed? - Answer-4100 x 28.5 = 116,850 / 100 = 1,169 x .7 = 818.3 /.A borrower who is in default on a mortgage is allowed to prevent the lender from foreclosing on the property by paying the mortgagee the delinquent principal and interest, plus any expenses the mortgagee has incurred in attempting to collect the payments. This right is called a. novation b. a satisfaction of mortgage c. the equity of redemption d. an acceleration clause - Answer-c. the equity of redemption /.a broker has listed a seller property. the seller has disclosed to the broker that the ceramic tile is loose in the dining room, which is covered by an area rug (not visible). the broker has satisfied his legal obligation if he tells the buyer a. that the floor appears to be in good condition b. that the tile is loose c. that the buyer can order an inspection at his expense if he is concerned d. nothing unless asked - Answer-b. that the tile is loose /.A broker is preparing to open Sunnyside Realty as a sole proprietorship and is placing an order to have an entrance sign made. Which wording does NOT need to be included on the sign? a. sunnyside realty b. the brokers legal name c. licensed real estate broker d. 1000 sunset blvd - Answer-d. 1000 sunset blvd /.A broker lists a motel for $1,450,000. The listing contract specifies a 6.5% sale commission for the first $600,000 of selling price, 7% for the next $800,000, and 8% commission on all of the actual sale price exceeding $1.4 million. The broker has agreed to a 45-55 split if the property is sold by one of the broker's sales associates. The property is sold "in house." The broker pays the sales associate involved in the transaction 55% of the total commission. What is the sales associate's commission if the associate sells the motel for the listed price? - Answer-600k x 6.5% = 39k 800k x 7% = 56k 50k x 8% = 4k total = 99k x 55% = 54,450 /.a broker lists a property, a 7% commission is agreed to, and the listing is placed in the MLS. the sale commission is to be split as follows: 45% to listing broker and 55% to selling broker. a sales associate who works for the selling broker sells the property for 160k. the sales associates agreement with her employer calls for a 60% share to her of all commissions she brings to the company. how much is due the sales associate? - Answer-160k x 7% = 11,200 x 55% = 6,160 x 60% = 3,696 /.a broker receives conflicting demands concerning a roof inspection report. both the buyer and the seller claim the earnest money deposit. the broker must a. provide written notification to the FREC within 10 business days b. follow the written instructions of the brokers buyer or seller c. institute one of the statutory settlement procedures within 30 business days from the time the broker received conflicting demands d. request an escrow disbursement order from the DBPR - Answer-c. institute one of the statutory settlement procedures within 30 business days from the time the broker received conflicting demands NOTIFICATION TO FREC = 15 BUSINESS DAYS 15- FREC 30- SETTLEMENT PROCEDURES /.A broker's obligations to consumers with whom the brokerage firm has no brokerage relationship include the duty of a. full disclosure b. accounting for all funds c. loyalty d. limited confidentiality - Answer-b. accounting for all funds /.A builder purchases a residential lot for $42,000 and constructs a new house at a cost of $178,000. The builder later sells the property for $187,000. What is the builder's percentage of loss on the sale? - Answer-42k + 178k = 220k 187k - 220k = -33k 33k / 220k = 15% /.a building is valued at $150k when NOI is capitalized at a rate of 8%. NOI is 40% of effective gross income. EGI is - Answer-NOI / cap rate = value NOI / 8% = 150k NOI = 12k EGI x 40% = 12k 30,000 /.a business has a 5 year variable lease for a suite in an office park. the first year of the lease calls for rent of $21.50/sf based on a beginning index of 189. the index increases to 195 at the beginning of the second year. what is the new rental rate? - Answer-195/189 = 1.032 x 21.5 = $22.18 /.A buyer agrees to purchase a property with an existing mortgage lien. In which situation is the new buyer the only party responsible for the debt? a. assumption of an existing mortgage b. estoppel c. assumption with novation d. subject to the mortgage - Answer-c. assumption with novation /.a buyer has agreed to pay the state taxes associated with a new second mortgage loan of 31k. what is the total cost? - Answer-31k x .002 = 62 31k / $100 = 310 x $.35 = 108.5 62 + 108.5 = 170.5 /.a buyer is purchasing a house with a closing scheduled for april 22. annual property taxes are 2,652. sale contract states that the day of closing belongs to the buyer. calculate the property tax proration using the 365 day method - Answer-2,652 / 365 = 7.2 (daily rate) jan 31 + feb 28 + march 31 + april 22 = 112 x 7.2 = 806.4 credit buyer 806.4, debit seller 806.4 /.A case in which the interest paid for borrowed funds is less than the overall rate of return to an investor is an example of a. LTV ratio b. positive leverage c. negative leverage d. yield - Answer-b. positive leverage /.A check is a square with each side measuring a. 1 mile b. 6 miles c. 24 miles d. 36 miles - Answer-c. 24 miles /.A closing is scheduled for next week. The broker would like the closing agent to prepare a check payable to the sales associate for the associate's share of the commission. which statement is TRUE? a. the closing agent is required by law to make the check payable to the brokerage company b. the broker may telephone the closing agent with instructions on how to disperse the escrow funds due the sales associate c. the broker may enter into a written blanket authorization with the closing agent to always make the sales associates' commission payable to the associate d. the broker must give specific written instructions to the closing agent regarding the exact amount of commission due the sales associate for next week's closing - Answer-d. the broker must give specific written instructions to the closing agent regarding the exact amount of commission due the sales associate for next week's closing /.a commercial bank sold a group of 2k mortgages directly to fannie mae. this is an example of a. primary market activity b. secondary market activity c. loan correspondence d. intermediation - Answer-b. secondary market activity /.a commercial property has a PGI of 40k. v&c losses are 5% of PGI. additional op exp total 12,920. the property has a first mortgage requiring payments of 1,070.75 per month. using a cap rate of 12%, which amount is an accurate estimate of the property value? - Answer-NOI / cap rate = value NOI= 40k - 2,000 - 12,920 = 25,080 / 12% = 209,000 209,000 /.A concise summary of all income and expenses of a business for a stated period of time is the A. balance sheet B. income statement C. cash flow statement D. asset sheet - Answer-B. income statement /.A condo unit buyer has how long to cancel the purchase contract after signing an agreement with a developer? a. 3 days b. 10 days c. 15 days d. 20 days - Answer-c. 15 days /.a constitutional homestead is owned by a man who is head of a family consisting of himself, his wife, and 3 kids. man dies unexpectedly. after his death, a. the widow owns the homestead in fee simple b. by operation of law, the widow owns a life estate in the homestead, and the kids are vested remaindermen c. the homestead will be distributed according to FL's probate law d. the homestead will descend to the mans heirs as specified in his will - Answer-b. by operation of law, the widow owns a life estate in the homestead, and the kids are vested remaindermen /.a contract forms when - Answer-**buyer has filled out form with their offer criteria**; both parties have reached an agreement on price, terms, and conditions (an offer is in place)