Florida Real Estate Exam Questions & Answers Correct 100%(RATED A)

Samuel wants to do a 1031 exchange. He sold his investment property and has identified the property he'd like to buy next. Within how many days must he close on this property in order for it to qualify as part of the exchange? - ANSWERSa. 180 b. 30 c.45 d.60 a. He has 45 days to identify a property he would like to purchase and 180 days to close on it, from time of sale. In which form of co-ownership is a person's ownership inheritable? - ANSWERSa. Joint tenancy b. Tenancy by the entirety c. Tenancy in common d. Tenancy in severalty c. Tenancy in common allows for a persons share to be inheritable, it does not automatically pass forth to the rest of the owners like in joint tenancy (this is called the right of survivorship). How long do prospective tenants have to request a refund after purchasing a rental list? - ANSWERSa. 10 days b. 15 days c. 30 days d. 360 days C. 30 days.... tenants have up to 30 days to request a 75% refund if they do not purchase a rental Which method best describes the foreclosure process in Florida? - ANSWERSa. Caveat emptor b. Judicial c. Lis pendens d. Non-judicial b. The state of florida offers a judicial foreclosure process A judicial foreclosure is known as a lien theory process. Basically, the homeowner has legal title to the property... Unlike title theory, where as the owner has equitable title Which of the following statements about the Florida property tax disclosure is NOT true? - ANSWERSa. It can be included in the sales contract itself. b. It cautions buyers not to rely on the current year's tax to predict what they'll have to pay. c. It gives buyers a rough estimate of the property tax they'll pay in the coming year. d. It must be provided to sellers when they sign their agency agreement. c. This disclosure doesn't provide any estimates of future property tax amounts. Which act simplifies, clarifies, and modernizes consumer protection laws and makes them more consistent with federal trade laws? - ANSWERSa. Fair Housing Act b. Federal Duplicate Law Condensation Act c. Federal Trade Commission Act d. Florida Deceptive and Unfair Trade Practices Act d. The Florida Deceptive and Unfair Trade Practices Act is the act that simplifies, clarifies, and modernizes consumer protection laws and makes them more consistent with federal trade laws. To comply with the statute of frauds, an option contract must be ______. - ANSWERSa. In writing and signed by the optionee b. In writing and signed by the optionor c. In writing and witnessed by an attorney d. On file at the local courthouse b. To comply with the statute of frauds, an option contract must be in writing and signed by the optionor (seller). A cooperative is a(n) _____. - ANSWERSa. limited partnership b. LLC c. not-for-profit corporation d. sole proprietorship c. A cooperative is a joint venture with its shareholders, formed for their benefit and governed by them. It's a not-for-profit corporation. Compared with condominiums, the monthly fees for a cooperative owner are typically ______. - ANSWERSa. Higher b. Much less c. Slightly less d. The same a. Monthly fees for cooperatives are generally higher because they include taxes, mortgage payments, and fees for maintaining common areas and facilities. For all intents and purposes, subagents are agents of the _______. - ANSWERSa. Buyer b. Seller c. The buyer's broker d. The listing broker b. Although a subagent may bring an unrepresented buyer to the transaction, the subagent is an agent of the seller. Can a new licensee specialize in the sale of farm and ranch property? - ANSWERSa. Not until the licensee has at least five years of experience in agricultural real estate b. Not until the licensee passes additional courses in agricultural real estate c. Yes, a new licensee can specialize in agricultural real estate d. Yes, as long as the new licensee has a degree in agriculture c. Specialization doesn't require additional coursework or credentials. The licensee must be competent in any specialization, however. Jacqueline is a licensee working with a property near a Superfund site. Which of these statements is true? - ANSWERSa. A portion of the sale price must go to the EPA to fund clean-up of the site. b. She must disclose potential health threats to anyone in the area when showing the property. c. She must disclose the existence of an environmental hazard in the area. d. The property can't be sold until the site is removed from the NPL. c. A property with a known Superfund site in the vicinity requires disclosure, as this is a material fact. Curtis wants to do a 1031 exchange. He just closed on his property. How many days does he have to identify a new property? - ANSWERSa. 180 b. 30 c. 45 d. 60 c. Investors who want to use the 1031 tax-deferred exchange must identify the new property within 45 days of closing and must close on that property within 180 days from the date of sale of the first property. Which option describes a real property tax lien? - ANSWERSa. General and involuntary b. General and voluntary c. Specific and involuntary d. Specific and voluntary c. A buyer representation agreement establishes an agency relationship between which parties? - ANSWERSa. Buyer and broker b. Buyer and salesperson c. Seller and broker d. Seller and salesperson a. You may hear a buyer representation agreement called the buyer/broker agreement. This is a contract between the buyer and the broker. Remember, all real estate activities are conducted under the broker's license. What must be filed for the eviction process to begin after a landlord has waited three days and serves a tenant a notice to pay or vacate the premises? - ANSWERSa. A complaint for eviction b. A writ of possession c. Evictus nuncus d. The lease a. The eviction process is handled by the court, and it begins when a landlord files a complaint for eviction with the county court. Which of the following could an investor who sells an apartment house buy using a 1031 exchange? - ANSWERSa. Duplex, office building, or warehouse b. Duplex only c. Office building only d. Warehouse or office building only a. Any of these would be allowed with a 1031 exchange. Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this? - ANSWERSa. Easement by prescription b. Easement in gross c. Express easement d. Visible easement a. Easements by prescription are created through continuous, exclusive, and long-term use of another's property without actual permission. Robin has great credit and was able to secure a loan for her ocean-side dream home. Her 30-year, fixed-rate loan is for an amount that's above conventional loan limits. What type of loan does Robin have? - ANSWERSa. A conforming Freddie Mac loan b. A government loan c. An FHA loan d. A non-conforming loan d. Loans that are outside of Freddie Mac and Fannie Mae guidelines, such as jumbo loans, are non-conforming loans. Which one of the following performs ministerial duties, such as recordkeeping, for the FREC? - ANSWERSa. DBPR b. DCPA c. DHR d. DRE d. The DRE is responsible for ministerial duties on behalf of the FREC. How long are the terms of the members of the FREC? - ANSWERS4 years 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? - ANSWERSa. 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? - ANSWERSa. 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? - ANSWERSa. 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? - ANSWERSa. 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? - ANSWERSa. 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? - ANSWERSa. 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? - ANSWERS-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? - ANSWERS- 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 - ANSWERSRecordation 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. Actual Notice - ANSWERSParties have personal knowledge of the particular event General Warranty Deed - ANSWERSA deed in which the grantor fully warrants good, clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed. Special Warranty Deed - ANSWERSidentical to a general warranty deed except that the covenant against encumbrances applies only to the time that the grantor owned the property Quitclaim Deed - ANSWERSA deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest. Bargain and Sale Deed - ANSWERSA deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion Assignment of Contract - ANSWERSTransfer of all rights under a contract to a third party. Assignor remains secondarily liability. Novation - ANSWERSSubstituting a new obligation for an old one or substituting new parties to an existing obligation. Exclusive Right to Sell Listing - ANSWERSUnder this listing arrangement, the broker employed is entitled to a commission no matter who sells the property during the listing period. (Even the Seller) Exclusive Agency Listing - ANSWERSThe owner employs only one broker but retains the right to personally sell the property, and thereby not pay a commission. However, if any other real estate company sells the property, the listing broker is still entitled to the commission stipulated. Open listing agreement - ANSWERSnon-exclusive listing agreement given by a seller to as many brokers as he or she chooses; broker only entitled to commission if he is the procuring cause of the sale Net Listing Agreement - ANSWERSA contract between a seller of real estate and a real estate broker in which the broker is paid as a commission the amount the sale price exceeds the price set by the seller. Option Contract - ANSWERSA contract under which the offeror cannot revoke the offer for a stipulated time period (because the offeree has given consideration for the offer to remain open). An option contract gives the potential buyer, who is known as the optionee, the right to purchase the property of the seller, or optionor, as some time in the future Energy Efficiency brochure - ANSWERSRequires buyers to receive a brochure before or at the time of executing the sales contract, about the option of receiving an energy efficiency rating on the property being purchased Property Tax Disclosure - ANSWERSbuyers should not rely on the sellers current property taxes as the amount of property taxes the buyers may be obliged to pay in the year subsequent to purchase. a change in ownership or property improvements triggers reassessments of the property that could result in higher property taxes form-based planning - ANSWERSCity planning where experts of different fields work together Traditional based planning - ANSWERSSpecialists from different areas of expertise work separately and focus on designing "their" areas What is the difference between a variance and a special use permit? A. A special use permit is permanent, whereas a variance is temporary. B. A special use permit requires a show of hardship; a variance doesn't. C. A variance is permanent, whereas a special use permit is temporary. D. A variance requires a show of hardship; a special use permit doesn't. - ANSWERSD. A variance requires a show of hardship; a special use permit doesn't What is a comprehensive plan? A. A blueprint for new construction projects B. A detailed plan that supplements a master plan and its implementation C. A long-term master plan for the development of a city or county D. A map of all of the zones in a district - ANSWERSC. A long-term master plan for the development of a city or county FAR, or floor area ratio, includes ________. A. All of the habitable structures on a lot B. All structures, including habitable structures and parking structures, but not parking lots C. None of the habitable structures on a lot D. The area within parking lots or parking structures - ANSWERSA. All of the habitable structures on a lot You're on a planning board that's discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response? A. "That applies to commercial areas only." B. "That's a great way to meet our objectives." C. "That's crazy. We're trying to reduce density, not increase it." D. "That will work for residential areas, but what about commercial?" - ANSWERSB. "That's a great way to meet our objectives." What's the next step in the adoption process for a comprehensive plan once the background studies have been performed? A. Developers bid on areas they would like to develop. B. Residents vote on the plan. C. The plan is reviewed at a public hearing by the local legislative body. D. The plan is reviewed at a public hearing by the planning commission. - ANSWERSD. The plan is reviewed at a public hearing by the planning commission. Who or what entity determines the final results of the comprehensive plan? A. The commission and local legislative body, with input from the public B. The governor C. The planning commission D. The public - ANSWERSA. The commission and local legislative body, with input from the public