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Florida Real Estate Best Exam Revision
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? - Solution -a. 180 b. 30 c. d. 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? - Solution -a. 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? - Solution -a. 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?
- Solution -a. 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? - Solution -a. 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? - Solution -a. Fair Housing Act b. Federal Duplicate Law Condensation Act c. Federal Trade Commission Act d. Florida Deceptive and Unfair Trade Practices Act
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? - Solution -a. 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? - Solution -a. 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? - Solution -a. 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? - Solution -a. 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? - Solution -a. 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? - Solution -a. A complaint for eviction b. A writ of possession c. Evictus nuncus d. The lease
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? - Solution -a. 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? - Solution - 4 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? - Solution -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? - Solution -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? - Solution -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? - Solution -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? - Solution -a. Condemnation b. Eminent domain c. Foreclosure d. Inverse condemnation
Is it easier for a lender to foreclose on a property? - Solution -- 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 - Solution -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. Actual Notice - Solution -Parties have personal knowledge of the particular event General Warranty Deed - Solution -A 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 - Solution -identical to a general warranty deed except that the covenant against encumbrances applies only to the time that the grantor owned the property Quitclaim Deed - Solution -A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest. Bargain and Sale Deed - Solution -A 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 - Solution -Transfer of all rights under a contract to a third party. Assignor remains secondarily liability. Novation - Solution -Substituting a new obligation for an old one or substituting new parties to an existing obligation. Exclusive Right to Sell Listing - Solution -Under 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 - Solution -The 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 - Solution -non-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 - Solution -A 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 - Solution -A 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).
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 - Solution -C. 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 - Solution -A. 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?" - Solution -B. "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. - Solution -D. 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 - Solution -A. The commission and local legislative body, with input from the public What purpose does bulk zoning serve? A. It homogenizes the look of the area. B. It keeps similar races together. C. It provides increased density. D. It restricts building density. - Solution -D. It restricts building density. Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this? A. Aesthetic zoning B. Downzoning C. Incentive zoning D. Spot zoning - Solution -D. Spot Zoning
B. The last 10 C. The last five D. The last two - Solution -A. One of the previous two "The homestead exemption must have been in place for one of the two preceding years, and the benefit transferred is limited to $500,000." How does the Federal Housing Finance Agency affect mortgages? A. It acts as a watchdog and focuses specifically on educating consumers about mortgage loans. B. It controls how much money is available to banks. It also controls interest rates, which affect how much mortgages cost. C. It lends money to other financial institutions (not end-users), which makes more money available for mortgages and keeps down the costs of borrowing money. D. It sets limits for conforming loans and controls the amount of money that lower-income people can borrow. - Solution -D. It sets limits for conforming loans and controls the amount of money that lower-income people can borrow. "The FHFA sets limits for conforming loans and controls the amount of money that lower-income people can borrow, which helps prevent housing market-related financial crises." In what year was the Americans with Disabilities Act made law? A. 1950 B. 1978 C. 1988 D. 1990 - Solution -D. 1990 What is the most likely effect when the Fed sells securities on the open market?
A. Banks will have more money to lend. B. Interest rates will decrease. C. The economy may grow due to an increased money supply. D. The economy may slow down due to a decreased money supply. - Solution -D. The economy may slow down due to a decreased money supply. "When the Fed sells securities, it takes money out of the market. This decreases the supply of money in the market and potentially slows down the economy." Someone who's been given the authority to act on behalf of someone else is a(n) ______. A. Agent B. Client C. Mortgage lender D. Trustor - Solution -A. Agent "The term agent, though often used to refer to a real estate licensee, means someone who's been given the authority to act on someone else's behalf in some capacity." To comply with the statute of frauds, an option contract must be ______. A. In writing and signed by the optionee B. In writing and signed by the optionor C. In writing and signed by the optionor On file at the local courthouse - Solution -C. In writing and signed by the optionor To comply with the statute of frauds, an option contract must be in writing and signed by the optionor (seller).
Business assets are separated from personal assets, which are not part of the sale. Sirius Shepard decided to open a brokerage in Azkaban. He's trying to decide between registering the trade name Sirius Shepard Realty or Sirius Seasoned Sales Realty. Which of the following statements is true? If used, trade names may not be longer than the licensee's own name Only sole proprietors may use trade names Sirius can choose to register either of these trade names, but not both simultaneously. The actual name of the individual is not a trade name; therefore he can't register Sirius Shepard Realty. - Solution -The actual name of the individual is not a trade name; therefore he can't register Sirius Shepard Realty. "Sirius would only be able to register Sirius Seasoned Sales as a trade name and not Sirius Shepard Realty because his actual name is not considered a trade name." Before beginning development of a condominium building, what must the developer do? Create an estimated operating budget Create the condo association Record a declaration of condominium Record a declaration of intent - Solution -Record a declaration of condominium "The developer must record a declaration of condominium before beginning development. This is recorded in county records where the property will be located."
In Florida, which of the following scenarios is considered a violation of FTC advertising rules? Marcy just listed the Brown property with the following description: "2,000 square feet of living space for a total of 2,800, including two outbuildings and an unfinished garage." Sarah has just started her career as a solo agent and decides to try a new marketing campaign slogan: "Come let our team of hard-working agents find you the home of your dreams!" Shelia just closed on the Martin property yesterday. She's taken down all the signs and online listings for it. Virginia posted an MLS listing for the Kennedy property without her principal broker's approval. - Solution -Sarah has just started her career as a solo agent and decides to try a new marketing campaign slogan: "Come let our team of hard-working agents find you the home of your dreams!" "While it may seem innocent enough, claiming to be a part of a team when you aren't is misleading and deceptive advertising." Luke recently moved from a condominium to a cooperative. With a cooperative, his share of mortgage interest and real estate taxes will be ______. Considered as capital gains Deductible on his personal income tax returns Fully refundable to him Not deductible on his personal income tax returns - Solution - Deductible on his personal income tax returns
