Florida Real Estate Broker's Exam Prep with complete verified solutions.

Which statement is TRUE concerning radon? Two homes next door to each other may have very different levels of radon. Hazel's brokerage firm has an annual expense budget of $162,000 that includes her own salary. She wants to make $20,000 profit. If she has seven sales associates, what must each sales associate generate in company dollars for Hazel to achieve her goal? The answer is $26,000. Required revenue is $182,000. ($20,000 + $162,000). Each sales associate must bring in at least $26,000 in gross revenue ($182,000 ÷ 7) A business appraiser, when valuing assets of a going concern should use market value. What mortgage right allows a borrower to prevent a foreclosure by paying the entire balance due to the lender? Equity of redemption Jack and Jill form a general partnership real estate brokerage entity. Jill has an active broker license, but Jack does not. Jill is killed in a car accident. Which statement is TRUE regarding this situation? A new active broker must fill the vacancy within 14 calendar days and register with the DBPR. Which individual is required to hold a Florida real estate license? An individual who negotiates long-term lease agreements for commercial property A licensed Florida real estate broker decides to move to Quebec, Canada. What must the broker do regarding his license? Notify the Commission of his nonresident status within 60 days of the change in residency A home is sold for $398,000. The buyers gave their broker a $10,000 good-faith deposit. The buyers will finance the purchase with a new 75% loan-to-value mortgage loan. Closing date is July 3, with the day of closing charged to the buyer. Property taxes are $8,412 and homeowners association dues are $125 monthly and were paid in advance. Prorations should be made using the 365-day method. The sellers will pay the 7% brokerage fee, the documentary stamp tax on the deed, and title insurance of $2,200. The buyers will pay the appropriate state taxes on the note and mortgage, $66 in recording fees, and $475 in survey costs. Based on this information, answer the following question about how the transaction will be shown on the Closing Disclosure. Where are the totals of the buyers' and the sellers' expenses shown? Pages 2 and 3 The expenses are itemized on Page 2; they are totaled on Page 3. An owner has a capital gain of $147,000 on the sale of her home. She has owned the property for three years. The sale price was $325,000. Costs of the sale were $5,000, qualified fix-up costs were $1,000, and moving costs were $4,000. How much must she pay in capital gains taxes on this sale if her normal tax rate is 20%? The answer is $0. Income tax rules allow a single filer to exclude tax on up to $250,000 of the gain from the sale of the filer's principal residence. The Federal Housing Administration (FHA) program that insures condominium mortgage loans is a Section The answer is 234(c). The 203(b) program is for single-family residences or duplexes; the 235 loan is defunct; the FHA 245 loan is called a growing equity loan. A developer owns an office building that is encumbered by a mortgage. He leases 10,000 square feet to a tenant for 10 years at a very attractive rate. Six months later, the bank forecloses on the mortgage and ends up as the property owner. What is the status of the tenant's lease? The answer is the bank may terminate the tenant's lease. If a tenant leases property that has a superior mortgage lien, the lender may foreclose the lease rights. Tenants who believe they have valid long-term leases at very low rates could become month-to-month tenants after the foreclosure sale. Which is FALSE about adjustable-rate mortgages? The answer is it is unpopular because it has negative amortization of the principal. Fannie Mae will not purchase loans with negative amortization. Negative amortization occurred in loans years ago when the amount of the payment was frozen, but the interest rate could fluctuate freely. What is the formula to calculate the equity dividend rate? The answer is before-tax cash flow divided by the owner's equity. The equity dividend rate is used most frequently in the investor's initial analysis. The cost approach is MOST applicable to which appraisal assignment? The answer is 1-year-old duplex in an area of mixed use. The cost approach is most appropriate when the site value is well substantiated, the improvements are new or nearly new and represent the highest and best use of the site, and the improvements do not suffer from substantial depreciation. This approach is also used for special purpose properties, such as hospitals, community colleges, fire stations, and libraries. The sales comparison approach is best for the residential home. The income approach is best for the bread company and the gasoline station. The reproduction cost new of a structure is $215,000 and the land value is $30,000. The structure is 9 years old and has an effective age of 7 years. Assuming a total economic life of 60 years, calculate the accrued depreciation using the age-life method. (Round to the nearest dollar.) The answer is $25,083. $215,000 reproduction cost new divided by 60 years total economic life = $3583.3333 annual depreciation × 7 years effective age = $25,083 A title insurance company offers to pay a real estate sales associate $50 for each Real Estate Settlement Procedures Act (RESPA) closing she refers to the company. This is The answer is prohibited under RESPA. No person may give or accept anything of value (kickback) for referrals of settlement service business associated with a federally related mortgage loan. Neither may a person give or accept any part of a charge for services that are not performed. An administrative complaint was filed against a broker. The probable-cause panel found reasonable grounds for prosecution. The broker has received a formal complaint. He disagrees with the violations alleged in the formal complaint. The broker The answer is is entitled to have the case heard by an administrative law judge in a formal hearing. When an administrative complaint is mailed to a licensee, the licensee also receives an Election of Rights form. If the licensee disputes the allegations of fact, the licensee, can list the allegations in dispute and request a formal hearing. A home is sold for $398,000. The buyers gave their broker a $10,000 good-faith deposit. The buyers will finance the purchase with a new 75% loan-to-value mortgage loan. Closing date is July 3, with the day of closing charged to the buyer. Property taxes are $8,412 and homeowners association dues are $125 monthly and were paid in advance. Prorations should be made using the 365-day method. The sellers will pay the 7% brokerage fee, the documentary stamp tax on the deed, and title insurance of $2,200. The buyers will pay the appropriate state taxes on the note and mortgage, $66 in recording fees, and $475 in survey costs. Based on this information, answer the following question about how the transaction will be shown on the Closing Disclosure. What are the documentary stamp taxes and intangible taxes on the deed and the mortgage? The answer is debit seller $2,786, debit buyer $1,641.75; page 2. Seller pays doc stamps on deed: 3980 units × .70 = $2,786.00. Buyer pays doc stamps on note and intangible taxes on mortgage. Step 1: calculate amount of mortgage. $398,000 × .75 = $298,500. Step 2: calculate doc stamps on note. 2,985 units × .35 = $1,044.75. Step 3: calculate intangible taxes on mortgage. $298,500 × .002 = $597.00. Step 4: add buyers costs together $1,641.75.