1. A real estate broker maintains a trust account to hold client funds. What is the broker's responsibility regarding the account?
- A. To use the account for business expenses and personal funds
- B. To commingle personal funds with client funds in the account
- C. To close the account when it is no longer needed
- D. To maintain accurate records and reconcile the account regularly
2. Who must be licensed to practice real estate in Florida?
- A. Only brokers and sales associates who work with residential properties
- B. Only brokers and sales associates who work with commercial properties
- C. All individuals who engage in any real estate activity, including attorneys and government employees
- D. All brokers and sales associates who engage in real estate activities, except for attorneys and certain government employees
3. How many hours of post-licensing education are required for a sales associate before their first license renewal?
- A. 14 hours
- B. 30 hours
- C. 60 hours
- D. 45 hours
4. What happens to a Florida real estate sales associate licence if the associate fails to complete the required post-licensing education?
- A. It becomes involuntarily inactive
- B. It becomes voluntarily inactive
- C. It is suspended
- D. It becomes null and void
5. How many hours of continuing education are required for Florida real estate sales associates every 2 years?
- A. 10 hours
- B. 30 hours
- C. 20 hours
- D. 14 hours
6. What is the requirement for a sales associate to maintain an active license status after the initial licensing period?
- A. Complete 14 hours of continuing education every year
- B. Pay the license renewal fee only
- C. Complete 63 hours of FREC Course I again
- D. Complete 45 hours of post-licensing education before the first renewal
7. What is the consequence of failing to complete the 45-hour post-licensing education requirement before the first renewal?
- A. The license will be suspended
- B. The license will be revoked
- C. The license will be placed on probation
- D. The license will be null and void
8. What is the primary role of the Division of Real Estate in relation to the Florida Real Estate Commission?
- A. To provide administrative support to the FREC
- B. To investigate complaints and discipline licensees
- C. To regulate real estate schools and approve courses
- D. To issue licenses and collect fees
9. What is the result of a broker complying with an Escrow Disbursement Order and later suffering a judgment?
- A. The broker is reimbursed from the Real Estate Recovery Fund and faces disciplinary action
- B. The broker is not reimbursed from the Real Estate Recovery Fund and does not face disciplinary action
- C. The broker is not reimbursed from the Real Estate Recovery Fund and faces disciplinary action
- D. The broker is reimbursed from the Real Estate Recovery Fund without disciplinary action
10. Can a sales associate be designated to work with a client in a commercial transaction?
- A. Yes, with the client's consent
- B. Yes, without the client's consent
- C. No, only in residential transactions
- D. No, never
11. A sales associate is representing a seller in a residential transaction. The sales associate has a fiduciary duty to the seller. What type of brokerage relationship is this?
- A. Transaction Broker
- B. Designated Sales Associate
- C. No Brokerage Relationship
- D. Single Agent
12. In a commercial transaction, can a broker designate a sales associate to act as a Single Agent for a party?
- A. Yes, for all transactions
- B. Yes, but only for residential transactions
- C. No, designation is not allowed in Florida
- D. Yes, but only for commercial transactions
13. What are the duties of a Transaction Broker in Florida?
- A. 9 fiduciary duties
- B. 5 single agent duties
- C. 3 no-brokerage duties
- D. 8 limited representation duties
14. What type of brokerage relationship requires a Single Agent Notice to be provided to the parties?
- A. Transaction Broker
- B. Designated Sales Associate
- C. No Brokerage Relationship
- D. Single Agent
15. When is a disclosure of the brokerage relationship required in Florida?
- A. In all real estate transactions
- B. Never
- C. In commercial transactions only
- D. In residential transactions of 4 units or fewer
16. A sales associate is acting as a Transaction Broker in a residential sale. How many duties are owed to both parties?
17. A sales associate wants to advertise their team. What is required for team advertising?
- A. The team name only
- B. No advertising is allowed for teams
- C. The sales associate's name only
- D. The brokerage name and the team name
18. What is the role of the sales associate in a brokerage?
- A. To supervise other sales associates
- B. To manage the brokerage
- C. To make policy decisions for the brokerage
- D. To work under the supervision of a broker or owner-developer
19. How long must a brokerage firm retain records of real estate transactions?
- A. 1 year
- B. 3 years
- C. 7 years
- D. 5 years
20. A broker has an office in a residential area and wants to put up a sign. What is the requirement for the sign?
- A. The sign must be at least 10 feet tall
- B. The sign must be at least 5 feet wide
- C. The sign must be approved by the homeowners' association
- D. The sign must have the broker's name and contact information
21. What happens if a broker complies with an Escrow Disbursement Order and later suffers a judgment?
- A. The broker is reimbursed from the Real Estate Recovery Fund and faces disciplinary action
- B. The broker faces disciplinary action only
- C. The broker is not reimbursed
- D. The broker is reimbursed from the Real Estate Recovery Fund without disciplinary action
22. What is the consequence of a sales associate engaging in unlicensed practice in Florida?
- A. A fine of up to $1,000
- B. A suspension of their license for up to 1 year
- C. A warning from the brokerage firm
- D. A third-degree felony charge
23. A brokerage firm has a dispute over an escrow deposit and receives conflicting demands from the buyer and seller. What is the first step the broker should take?
- A. File a lawsuit
- B. Request an Escrow Disbursement Order from FREC
- C. Mediate the dispute
- D. Notify FREC of the conflicting demands
24. A brokerage firm is having a dispute over an escrow account. What is the first step in resolving the dispute?
- A. File a lawsuit
- B. Request an Escrow Disbursement Order from FREC
- C. Mediate the dispute
- D. Notify FREC of conflicting demands
25. A broker has a dispute over an escrow deposit and receives conflicting demands from the buyer and seller. What should the broker do first?
- A. File a lawsuit
- B. Arbitrate the dispute
- C. Mediate the dispute
- D. Notify FREC of the conflicting demands
26. A sales associate offers to pay a friend a referral fee for bringing in a client. Is this permissible?
- A. Yes, as long as the friend is not licensed
- B. Yes, as long as the broker approves
- C. No, because the friend must be a licensed broker
- D. No, because only licensed brokers and sales associates can receive compensation
27. A broker is holding an escrow deposit and receives conflicting demands from the buyer and seller. What is the first step the broker must take?
- A. Deposit the funds into the court registry
- B. File a lawsuit to resolve the dispute
- C. Attempt to mediate the dispute
- D. Notify FREC of the conflicting demands
28. A broker is offering a referral fee to an unlicensed individual. Is this allowed?
- A. Yes, as long as the referral fee is less than $100
- B. Yes, as long as the unlicensed individual is a family member
- C. No, because it is considered a kickback
- D. No, because it is considered an unlicensed compensation
29. A sales associate is found to have engaged in unlicensed practice. What is the classification of this offense?
- A. First-degree misdemeanor
- B. Second-degree misdemeanor
- C. First-degree felony
- D. Third-degree felony
30. A sales associate is found guilty of breach of trust. What type of penalty may they face?
- A. Only a fine
- B. Only probation
- C. Only suspension
- D. Any of the above, including revocation
31. What is the consequence for a broker who complies with an Escrow Disbursement Order and later loses a judgment related to the escrow?
- A. The broker's licence is revoked
- B. The broker's licence is suspended
- C. The broker is fined $5,000
- D. The broker is reimbursed from the Real Estate Recovery Fund without discipline
32. A real estate sales associate receives an email from a potential client who has previously opted out of receiving emails. What law does the associate need to comply with?
- A. CAN-SPAM
- B. Do-Not-Call
- C. Fair Housing Act
- D. Americans with Disabilities Act
33. A real estate sales associate receives an email from a consumer who has opted out of further contact. What should the associate do?
- A. Respond to the email and try to persuade the consumer to opt back in
- B. Ignore the email and continue to send marketing materials
- C. Report the consumer to the Florida Real Estate Commission
- D. Add the consumer's email address to a do-not-contact list
34. The Truth-in-Lending Act (TILA) requires lenders to disclose certain information to borrowers, including the annual percentage rate (APR). Which of the following trigger terms would require a lender to provide a TILA disclosure?
- A. Fixed rate
- B. Variable rate
- C. Annual percentage rate
- D. Finance charge
35. What is the bundle of rights in real property?
- A. The rights of the landlord
- B. The rights of the tenant
- C. The rights of the government to tax the property
- D. The rights of the owner to use, sell, and dispose of the property
36. A bundle of rights includes the right to:
- A. Use, sell, and gift the property, but not lease it
- B. Lease, sell, and gift the property, but not use it
- C. Use, sell, gift, and lease the property
- D. None of the above
37. A homeowner's association (HOA) has rules that restrict the colors that can be used to paint houses in the neighborhood. What type of control is this?
- A. Zoning ordinance
- B. Easement
- C. Lien
- D. CC&Rs
38. A free-standing refrigerator in a rental property is considered _____.
- A. A fixture
- B. A trade fixture
- C. Real property
- D. Personal property
39. A free-standing refrigerator is considered what type of property?
- A. Real property
- B. Fixture
- C. Emblement
- D. Personal property
40. A cooperative owner in Florida has the right to
- A. Lease their unit without association approval
- B. Make alterations to the common elements
- C. Inspect the association's financial records
- D. All of the above
41. What is the bundle of rights that an owner of a property has?
- A. The right to sell, lease, and give away the property
- B. The right to will, gift, and devise the property
- C. The right to mortgage, tax, and insure the property
- D. The right to use, possess, and dispose of the property
42. What is the primary purpose of the declaration in a Florida condominium?
- A. To establish the condominium association's bylaws
- B. To define the boundaries of the condominium property
- C. To provide a framework for the condominium's financial management
- D. To outline the rights and responsibilities of unit owners
43. What is the term for a private agreement that restricts the use of a property?
- A. Easement
- B. Lien
- C. Encroachment
- D. Covenant, Condition & Restriction (CC&R)
44. What is the purpose of recording a deed in the county clerk's office?
- A. To transfer title to the property
- B. To establish a joint tenancy
- C. To create a life estate
- D. To provide constructive notice to subsequent purchasers
45. A property owner installs a new fence that encroaches onto a neighboring property. What type of issue is this?
- A. Encroachment
- B. Trespass
- C. Nuisance
- D. Easement dispute
46. A lender is requiring a borrower to sign a subordination agreement as a condition of approving a home equity loan. What is the purpose of this agreement?
- A. To give the home equity lender priority over the first mortgage lender
- B. To allow the borrower to sell the property without paying off the loan
- C. To require the borrower to make larger monthly payments
- D. To subordinate the home equity loan to the first mortgage loan
47. A lien that is placed on a property due to unpaid taxes is an example of which type of lien?
- A. Voluntary lien
- B. Specific lien
- C. General lien
- D. Involuntary lien
48. A lender includes an alienation clause in a loan agreement. What is the purpose of this clause?
- A. To allow the borrower to sell the property without penalty
- B. To require the borrower to sell the property if they default
- C. To reduce the loan's interest rate if the borrower sells the property
- D. To permit the lender to accelerate the loan if the property is sold or transferred
49. Which of the following types of deeds conveys the greatest warranty of title?
- A. General Warranty Deed
- B. Special Warranty Deed
- C. Quitclaim Deed
- D. Deed of Trust
50. What is the size of the NE 1/4 of the SW 1/4 of a standard 640-acre section in the Government Survey system?
- A. 10 acres
- B. 160 acres
- C. 80 acres
- D. 40 acres
51. Which type of legal description is typically used for properties located in urban areas?
- A. Metes and bounds
- B. Monument-based
- C. Government survey
- D. Lot-block
52. What type of description is typically used for a property located within a subdivision?
- A. Government Survey
- B. Metes and bounds
- C. Monument-based
- D. Lot and block
53. In the Government survey system, sections are numbered in a
- A. Random pattern
- B. Circular pattern
- C. Grid pattern
- D. Serpentine pattern from the NE corner
54. What is the purpose of a government survey?
- A. To determine the value of a property
- B. To determine the ownership of a property
- C. To determine the zoning of a property
- D. To determine the boundaries of a property
55. A real estate contract must be in writing to be enforceable under the Statute of Frauds. What is the primary purpose of this requirement?
- A. To provide a record of the transaction for tax purposes
- B. To prevent disputes over the terms of the contract
- C. To protect the buyer from making a mistake in their offer
- D. To prevent fraudulent transactions and ensure that all parties are clear on the terms of the contract
56. A buyer makes an offer to purchase a property with a contingency for financing, but the seller rejects the offer and makes a counteroffer without the contingency. What is the status of the original offer?
- A. It is still valid and can be accepted by the seller
- B. It is automatically accepted if the buyer obtains financing
- C. It can be modified by the buyer to remove the contingency
- D. It is terminated and cannot be accepted by the seller
57. What is the result of a buyer's breach of a real estate contract?
- A. The seller may sue for specific performance
- B. The seller may forfeit the earnest money
- C. The seller may terminate the contract and retain the earnest money
- D. All of the above
58. A buyer gives a seller $1,000 in earnest money as a deposit on a property. What happens to the earnest money if the buyer breaches the contract?
- A. It is refunded to the buyer
- B. It is held in escrow until the dispute is resolved
- C. It is split between the buyer and seller
- D. It is given to the seller as damages
59. A contract for the sale of a property includes a contingency for the buyer's financing. If the buyer is unable to secure financing, what is the effect on the contract?
- A. The contract is terminated, and the earnest money deposit is refunded to the buyer
- B. The contract remains in effect, and the buyer is obligated to purchase the property
- C. The seller may sue the buyer for damages
- D. The contract is terminated, but the earnest money deposit is forfeited to the seller
60. What is the purpose of the statute of frauds in relation to real estate contracts?
- A. To require all contracts to be in writing
- B. To limit the amount of earnest money that can be required
- C. To prohibit oral contracts for the sale of real property
- D. To require contracts for the sale of real property to be in writing to be enforceable
61. Which of the following is a requirement for the sale of a pre-1978 residential property?
- A. Disclosure of the presence of asbestos
- B. Disclosure of the seller's identity
- C. Disclosure of the property's value
- D. Disclosure of the presence of lead-based paint
62. What is the effect of the statute of frauds on a real estate contract?
- A. It requires the contract to be recorded to be enforceable
- B. It allows the contract to be oral
- C. It prohibits the contract from being in writing
- D. It requires the contract to be in writing to be enforceable
63. What is the effect of a breach of contract by one party on the other party's obligations?
- A. The other party is released from their obligations
- B. The other party must continue to perform their obligations
- C. The other party can sue for damages
- D. The contract is automatically terminated
64. A buyer makes an offer on a property with a $10,000 earnest money deposit. The seller responds with a counteroffer, increasing the price by $5,000. What happens to the original offer?
- A. It remains open for acceptance
- B. It is renegotiated based on the counteroffer
- C. It is accepted and the buyer must pay the higher price
- D. It is rejected and replaced by the counteroffer
65. A buyer makes an offer to purchase a property with a contingency for financing. The seller rejects the offer and makes a counteroffer with different terms. What happens to the original offer?
- A. It remains open for acceptance
- B. It is rejected and a new offer is made
- C. It is put on hold pending financing
- D. It terminates and cannot be accepted
66. What is the effect of a breach of contract by the buyer on the earnest money deposit?
- A. The buyer forfeits the deposit to the seller
- B. The seller must refund the deposit to the buyer
- C. The deposit is held in escrow until the dispute is resolved
- D. The buyer may recover the deposit plus damages from the seller
67. The Truth in Lending Act (TILA) requires lenders to disclose the annual percentage rate (APR) to borrowers. What is the primary purpose of this disclosure?
- A. To inform borrowers of the loan amount
- B. To inform borrowers of the interest rate
- C. To inform borrowers of the loan term
- D. To inform borrowers of the total cost of the loan
68. What is the main difference between a mortgage and a deed of trust?
- A. A mortgage requires a higher down payment
- B. A deed of trust is used for residential properties only
- C. A mortgage is used for commercial properties only
- D. A deed of trust involves a trustee who holds title to the property
69. A borrower obtains a loan with a subordination clause. What does this clause allow the lender to do?
- A. Subordinate the loan to a subsequent loan
- B. Require the borrower to make a balloon payment
- C. Increase the interest rate on the loan
- D. Convert the loan to a fixed-rate loan
70. A borrower is purchasing a home with a conventional loan and is paying points to lower their interest rate. What are points?
- A. A type of insurance that protects the lender.
- B. A fee paid to the appraiser.
- C. A type of tax paid by the borrower.
- D. A fee paid to the lender to lower the interest rate.
71. What is the main difference between points and origination fees in a mortgage loan?
- A. Points are paid to the lender, while origination fees are paid to the broker
- B. Points are tax-deductible, while origination fees are not
- C. Points are paid at closing, while origination fees are paid at application
- D. Points are used to buy down the interest rate, while origination fees are used to cover loan processing costs
72. What is the primary purpose of an escrow account in the context of real estate financing?
- A. To hold the borrower's monthly payments until the loan is repaid
- B. To pay the lender's origination fee
- C. To prepay the loan balance
- D. To set aside funds for property tax and insurance payments
73. A borrower signs a promissory note and deed of trust to secure a loan. What is the primary difference between these two documents?
- A. The promissory note is recorded, while the deed of trust is not
- B. The deed of trust is recorded, while the promissory note is not
- C. The deed of trust is the loan, while the promissory note is the security
- D. The promissory note is the loan, while the deed of trust is the security
74. A borrower pays points to lower their loan's interest rate. What is the primary benefit of paying points?
- A. To reduce the loan's monthly payment
- B. To increase the loan's loan-to-value ratio
- C. To avoid paying private mortgage insurance (PMI)
- D. To lower the loan's interest rate and monthly payment
75. What is the purpose of the Truth-in-Lending Act (TILA) disclosure?
- A. To disclose the loan amount and interest rate to the borrower
- B. To disclose the property value and appraisal to the borrower
- C. To disclose the lender's credit score requirements to the borrower
- D. To disclose the terms and conditions of the loan, including the annual percentage rate (APR), to the borrower
76. What is the primary role of Fannie Mae in the mortgage market?
- A. To provide mortgage insurance
- B. To guarantee VA loans
- C. To originate mortgage loans
- D. To purchase and securitize mortgages
77. What is the primary difference between a conventional loan and a conforming loan?
- A. A conventional loan is insured by the government, while a conforming loan is not
- B. A conventional loan has a higher interest rate than a conforming loan
- C. A conventional loan can have a higher loan-to-value ratio than a conforming loan
- D. A conforming loan meets certain standards set by Fannie Mae and Freddie Mac, while a conventional loan does not
78. A borrower is considering a VA loan to purchase a home. What is a key benefit of this type of loan?
- A. The loan requires a 20% down payment
- B. The loan has a higher interest rate than conventional loans
- C. The loan is only available for properties in rural areas
- D. The loan does not require private mortgage insurance
79. A buyer is purchasing a property with a wraparound mortgage. What does this mean for the seller?
- A. The seller will receive the full purchase price at closing
- B. The seller will retain title to the property
- C. The seller will be released from liability for the existing mortgage
- D. The seller will be responsible for making payments on the existing mortgage
80. A lender charges 1 discount point on a $160,000 loan. One point equals 1% of the loan amount. What is the cost of the points?
- A. $800
- B. $3,200
- C. $160
- D. $1,600
81. An investor bought a property for $410,000 and wants to sell it for a 15% profit. What must the sale price be?
- A. $348,500
- B. $61,500
- C. $410,000
- D. $471,500
82. A tenant paid $1,600 rent for the full month. The sale closes on day 14 of a 30-day month. How much unearned rent must the seller credit the buyer at closing?
- A. $745.67
- B. $906.67
- C. $746.67
- D. $853.33
83. An investor bought a property for $320,000 and wants to sell it for a 10% profit. What must the sale price be?
- A. $320,000
- B. $288,000
- C. $32,000
- D. $352,000
84. An investor bought a property for $200,000 and wants to sell it for a 10% profit. What must the sale price be?
- A. $20,000
- B. $200,000
- C. $180,000
- D. $220,000
85. Annual property taxes are $9,000. Using a 365-day year, the seller is responsible for 98 days. What is the seller's prorated share?
- A. $2,450.00
- B. $6,583.56
- C. $3,156.16
- D. $2,416.44
86. A sales associate is analyzing the local real estate market and notices a high vacancy rate in rental properties, as well as a decrease in building permits issued over the past year. What can be inferred about the current state of the market?
- A. The market is experiencing a surge in demand for housing
- B. The market is experiencing a balance between supply and demand
- C. The market is experiencing a rapid appreciation in property values
- D. The market is experiencing a surplus of supply over demand
87. A Broker Price Opinion (BPO) is typically used for which purpose?
- A. To provide a detailed, comprehensive appraisal of a property's value.
- B. To identify potential defects or needed repairs in a property.
- C. To determine the property's potential for renovation or redevelopment.
- D. To provide a quick, informal estimate of a property's value for use in marketing or pricing decisions.
88. To ensure unbiased appraisal reports, appraisers must maintain their independence by avoiding which?
- A. Communication with the client
- B. Use of standardized appraisal forms
- C. Acceptance of gifts or bribes from clients
- D. Involvement in the sales process
89. Which of the following best describes the principle of substitution in real estate appraisal?
- A. Buyers will pay the highest price for a property based on its unique features
- B. The value of a property is determined by the cost of its construction
- C. The value of a property is determined by its potential for future development
- D. A buyer will pay no more for a property than the cost of acquiring an equally desirable substitute property
90. Which type of depreciation is caused by external factors such as proximity to a highway or environmental hazards?
- A. Physical depreciation
- B. Functional depreciation
- C. Economic depreciation
- D. External depreciation
91. A broker price opinion (BPO) is most commonly used for which of the following purposes?
- A. To determine the market value of a property for a lender
- B. To provide a detailed appraisal report for a buyer
- C. To estimate the value of a property for a potential seller
- D. To settle an estate
92. The process of a superior property being pulled down in value by surrounding inferior properties is known as what?
- A. Progression
- B. Depreciation
- C. Appreciation
- D. Regression
93. What is the concept of highest and best use in appraisal?
- A. The use that maximizes the property's value, based on its physical characteristics
- B. The use that is most profitable for the property owner
- C. The use that is most commonly found in the neighborhood
- D. The use that is legally permissible, physically possible, financially feasible, and maximally productive
94. Which approach to value estimates the cost to replace or reproduce a property, minus depreciation?
- A. Sales comparison approach
- B. Hybrid approach
- C. Income approach
- D. Cost approach
95. Which of the following is a benefit of positive leverage in real estate investing?
- A. Increased risk
- B. Decreased cash flow
- C. Lower return on investment
- D. Increased potential for appreciation
96. Which of the following investments typically offers higher liquidity than real estate?
- A. Stocks
- B. Bonds
- C. Mutual Funds
- D. All of the above
97. What is the documentary stamp tax rate on deeds in most Florida counties?
- A. $0.50 per $100
- B. $0.60 per $100
- C. $0.80 per $100
- D. $0.70 per $100
98. A property valued at $190,000 is assessed at 40% of value. The tax rate is $1.50 per $100 of assessed value. What is the annual tax?
- A. $1,140
- B. $114
- C. $2,850
- D. $11,400
99. What is the purpose of the Truth in Millage (TRIM) notice in Florida?
- A. To notify property owners of their tax bill
- B. To apply for homestead exemption
- C. To collect property taxes
- D. To inform property owners of the proposed millage rate and taxable value
100. What is the term for a governmental power to take private property for public use, requiring just compensation to be paid to the property owner?
- A. Police power
- B. Taxation
- C. Escheat
- D. Eminent domain
1. D 2. D 3. D 4. D 5. D 6. D 7. D 8. A 9. D 10. A 11. D 12. D 13. D 14. D 15. D 16. B 17. D 18. D 19. D 20. D 21. D 22. D 23. D 24. D 25. D 26. D 27. D 28. D 29. D 30. D 31. D 32. A 33. D 34. D 35. D 36. C 37. D 38. D 39. D 40. C 41. D 42. D 43. D 44. D 45. A 46. D 47. D 48. D 49. A 50. D 51. D 52. D 53. D 54. D 55. D 56. D 57. D 58. D 59. A 60. D 61. D 62. D 63. A 64. D 65. D 66. A 67. D 68. D 69. A 70. D 71. D 72. D 73. D 74. D 75. D 76. D 77. D 78. D 79. D 80. D 81. D 82. D 83. D 84. D 85. D 86. D 87. D 88. D 89. D 90. D 91. A 92. D 93. D 94. D 95. D 96. D 97. D 98. A 99. D 100. D
- 1. D — The broker has a fiduciary duty to maintain accurate records and reconcile the trust account regularly to ensure that client funds are handled properly and that the account is balanced.
- 2. D — In Florida, all brokers and sales associates who engage in real estate activities must be licensed, except for certain exempt individuals such as attorneys and government employees.
- 3. D — 45 hours of post-licensing education are required before the first license renewal, as mandated by FREC
- 4. D — The correct answer is it becomes null and void, as failure to complete post-licensing education results in the licence being null and void.
- 5. D — Florida real estate sales associates are required to complete 14 hours of continuing education every 2 years.
- 6. D — To maintain an active license status after the initial licensing period, a sales associate must complete 45 hours of post-licensing education before the first renewal.
- 7. D — If the 45-hour post-licensing education requirement is not completed before the first renewal, the license will be null and void, as stated in Chapter 475, F.S.
- 8. A — The Division of Real Estate provides administrative support to the Florida Real Estate Commission.
- 9. D — A broker who complies with an Escrow Disbursement Order and later suffers a judgment is reimbursed from the Real Estate Recovery Fund without disciplinary action.
- 10. A — Yes, a sales associate can be designated to work with a client in a commercial transaction, but only with the client's consent.
- 11. D — Since the sales associate has a fiduciary duty to the seller, this is a Single Agent relationship. Single Agents have full fiduciary duties to their clients.
- 12. D — In a commercial transaction, a broker can designate a sales associate to act as a Single Agent for a party, providing full fiduciary duties to that party.
- 13. D — A Transaction Broker in Florida has 8 limited representation duties, which include dealing honestly and fairly, accounting for all funds, and disclosing all known facts that materially affect the value of the property.
- 14. D — The Single Agent relationship requires a Single Agent Notice to be provided to the parties, as it involves full fiduciary duties and representation.
- 15. D — A disclosure of the brokerage relationship is required in residential transactions of 4 units or fewer in Florida.
- 16. B — A Transaction Broker owes 8 duties to both parties in a transaction, including dealing honestly and fairly, and accounting for all funds.
- 17. D — Team advertising requires the brokerage name and the team name.
- 18. D — A sales associate works under the supervision of a broker or owner-developer.
- 19. D — A brokerage firm must retain records of real estate transactions for 5 years, as required by Florida law.
- 20. D — The sign must have the broker's name and contact information to comply with Florida's office and sign requirements.
- 21. D — The broker is reimbursed from the Real Estate Recovery Fund without disciplinary action for complying with an Escrow Disbursement Order.
- 22. D — Unlicensed practice is a third-degree felony in Florida, emphasizing the seriousness of practicing real estate without a license.
- 23. D — The broker should notify FREC of the conflicting demands, then proceed with one of the four settlement procedures: mediation, arbitration, litigation, or requesting an Escrow Disbursement Order.
- 24. D — The first step in resolving an escrow dispute is to notify FREC of conflicting demands.
- 25. D — The broker should notify FREC of the conflicting demands, then proceed with mediation, arbitration, litigation, or an Escrow Disbursement Order.
- 26. D — Only licensed brokers and sales associates can receive compensation for real estate services.
- 27. D — The broker must notify FREC of the conflicting demands, then proceed with one of the four settlement procedures: mediation, arbitration, litigation, or an Escrow Disbursement Order.
- 28. D — Offering a referral fee to an unlicensed individual is considered an unlicensed compensation and is not allowed.
- 29. D — Unlicensed practice is a third-degree felony in Florida, which carries significant penalties and consequences.
- 30. D — A sales associate found guilty of breach of trust may face any of the penalties, including a fine, probation, suspension, or revocation, as per s.475.25.
- 31. D — A broker who complies with an Escrow Disbursement Order and later loses a judgment is reimbursed from the Real Estate Recovery Fund without facing licence discipline, as per s.475.482.
- 32. A — The associate needs to comply with CAN-SPAM, which regulates commercial emails and requires opt-out mechanisms.
- 33. D — The CAN-SPAM Act requires that senders of commercial emails honor opt-out requests and add the consumer's email address to a do-not-contact list.
- 34. D — The trigger term 'finance charge' would require a lender to provide a TILA disclosure, as it is a term that indicates the borrower will be charged interest or other fees.
- 35. D — The bundle of rights in real property refers to the rights of the owner to use, sell, and dispose of the property, including the right to exclude others.
- 36. C — A bundle of rights includes the right to use, sell, gift, and lease the property, among other rights.
- 37. D — The HOA's rules are an example of covenants, conditions, and restrictions (CC&Rs), which are private controls that govern the use of property in a development.
- 38. D — A free-standing refrigerator is considered personal property because it is not attached to the real property.
- 39. D — A free-standing refrigerator is not attached to the real estate, making it personal property.
- 40. C — Cooperative owners in Florida have the right to inspect the association's financial records.
- 41. D — The bundle of rights includes the right to use, possess, and dispose of the property, among other rights.
- 42. D — The declaration outlines the rights and responsibilities of unit owners, as well as the rules and regulations governing the condominium.
- 43. D — A CC&R is a private agreement that restricts the use of a property, often found in subdivision developments.
- 44. D — Recording a deed provides constructive notice to subsequent purchasers, protecting the grantee's interest in the property. It does not transfer title, which occurs upon delivery and acceptance.
- 45. A — An encroachment occurs when a property owner's improvement, such as a fence, extends onto a neighboring property without permission.
- 46. D — A subordination agreement subordinates the home equity loan to the first mortgage loan, making the first mortgage loan the primary lien on the property.
- 47. D — A lien that is placed on a property due to unpaid taxes is an example of an involuntary lien, which is a lien that is imposed on a property without the owner's consent.
- 48. D — An alienation clause, also known as a due-on-sale clause, allows the lender to accelerate the loan if the property is sold or transferred without their consent.
- 49. A — A general warranty deed conveys the greatest warranty of title, as it guarantees the grantor's title against all claims, whereas a special warranty deed only guarantees against claims arising during the grantor's ownership.
- 50. D — The NE 1/4 of the SW 1/4 is 1/4 of 1/4 of 640 acres, so the size is 640 ÷ 4 ÷ 4 = 40 acres.
- 51. D — The lot-block system of legal description is commonly used for properties in urban areas, where land is subdivided into lots and blocks.
- 52. D — A lot and block description is typically used for a property located within a subdivision, referencing a recorded plat.
- 53. D — In the Government survey system, sections are numbered in a serpentine pattern from the NE corner, which means that the numbering starts from the NE corner and alternates between rows.
- 54. D — The purpose of a government survey is to determine the boundaries of a property, establishing the official record of the property's dimensions and location.
- 55. D — The Statute of Frauds requires that certain contracts, including real estate contracts, be in writing to prevent fraudulent transactions and ensure that all parties are clear on the terms of the contract.
- 56. D — A counteroffer terminates the original offer, and the buyer must accept the new terms of the counteroffer if they want to proceed with the purchase.
- 57. D — If a buyer breaches a real estate contract, the seller may sue for specific performance, forfeit the earnest money, or terminate the contract and retain the earnest money, depending on the circumstances and the terms of the contract.
- 58. D — If the buyer breaches the contract, the earnest money is typically forfeited to the seller as damages.
- 59. A — If the buyer is unable to secure financing, and the contract includes a contingency for financing, the contract is terminated, and the earnest money deposit is typically refunded to the buyer.
- 60. D — The statute of frauds requires contracts for the sale of real property to be in writing to be enforceable, in order to prevent disputes and fraud.
- 61. D — Federal law requires sellers of pre-1978 residential properties to disclose the presence of lead-based paint to potential buyers.
- 62. D — The statute of frauds requires certain contracts, including those for the sale of real property, to be in writing to be enforceable.
- 63. A — If one party breaches the contract, the other party is released from their obligations, as the breach has excused their performance.
- 64. D — A counteroffer terminates the original offer, replacing it with a new proposal.
- 65. D — A counteroffer terminates the original offer, and it cannot be accepted thereafter.
- 66. A — If the buyer breaches the contract, the buyer may forfeit the earnest money deposit to the seller, depending on the contract terms.
- 67. D — The APR disclosure under TILA informs borrowers of the total cost of the loan, including fees and interest.
- 68. D — The main difference between a mortgage and a deed of trust is that a deed of trust involves a trustee who holds title to the property until the loan is paid off.
- 69. A — A subordination clause allows the lender to subordinate the loan to a subsequent loan, such as a home equity loan.
- 70. D — Points are a fee paid to the lender to lower the interest rate on the loan, and are typically expressed as a percentage of the loan amount.
- 71. D — Points are used to buy down the interest rate, while origination fees are used to cover loan processing costs.
- 72. D — The primary purpose of an escrow account is to set aside funds for property tax and insurance payments, ensuring that the borrower has sufficient funds to cover these expenses when they come due.
- 73. D — The promissory note is the loan itself, while the deed of trust is the security instrument that pledges the property as collateral for the loan.
- 74. D — Paying points can lower the loan's interest rate, which in turn reduces the monthly payment.
- 75. D — The TILA disclosure is required to disclose the terms and conditions of the loan, including the APR, to the borrower, so they can make an informed decision about the loan.
- 76. D — Fannie Mae is a secondary mortgage market entity that purchases and securitizes mortgages, providing liquidity to the mortgage market.
- 77. D — A conforming loan meets certain standards set by Fannie Mae and Freddie Mac, such as loan amount limits, while a conventional loan does not have these specific requirements.
- 78. D — VA loans do not require private mortgage insurance, which can be a significant cost savings for borrowers.
- 79. D — A wraparound mortgage means the buyer will make payments to the seller, who will then make payments on the existing mortgage, so the seller remains responsible for the existing mortgage.
- 80. D — 1 point = 1% of $160,000 = $1,600.
- 81. D — Sale price = cost × (1 + profit%) = $410,000 × 1.15 = $471,500.
- 82. D — Daily rent = $1,600 ÷ 30 = $53.33. The buyer owns the property for the 16 remaining days, so the credit = $53.33 × 16 = $853.33.
- 83. D — Sale price = cost × (1 + profit%) = $320,000 × 1.1 = $352,000.
- 84. D — Sale price = cost × (1 + profit%) = $200,000 × 1.1 = $220,000.
- 85. D — Daily tax = $9,000 ÷ 365 = $24.66. Seller's share = $24.66 × 98 = $2,416.44.
- 86. D — A high vacancy rate and a decrease in building permits indicate that there is currently more supply than demand in the market, resulting in a surplus of available properties.
- 87. D — A BPO is a quick, informal estimate of a property's value, often used by real estate agents or brokers to help price a property for sale or to provide a rough estimate of value for marketing purposes.
- 88. D — Appraisers must maintain their independence by avoiding involvement in the sales process, as this can create a conflict of interest and compromise the appraiser's objectivity.
- 89. D — The principle of substitution states that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute property, which is a fundamental concept in determining market value.
- 90. D — External depreciation is caused by factors outside the property itself, such as proximity to a highway or environmental hazards
- 91. A — A BPO is often used by lenders to determine the market value of a property, particularly in situations where a full appraisal is not necessary.
- 92. D — Regression occurs when a superior property's value is negatively impacted by the presence of surrounding inferior properties.
- 93. D — The concept of highest and best use refers to the use that is legally permissible, physically possible, financially feasible, and maximally productive, and is a critical component of the appraisal process.
- 94. D — The cost approach estimates the cost to replace or reproduce a property, minus depreciation, to determine its value.
- 95. D — Positive leverage occurs when the income from a property exceeds the mortgage payments, allowing the investor to benefit from increased potential for appreciation.
- 96. D — Stocks, bonds, and mutual funds are generally more liquid than real estate, as they can be easily bought and sold on public markets. Real estate, on the other hand, can take months to sell and may require significant marketing efforts.
- 97. D — The documentary stamp tax rate on deeds in most Florida counties is $0.70 per $100 of price. For example, a $200,000 deed would incur a tax of $200,000 * $0.70 / $100 = $1,400.
- 98. A — Assessed = $190,000 × 40% = $76,000. Tax = ($76,000 ÷ 100) × 1.5 = $1,140.
- 99. D — The Truth in Millage (TRIM) notice informs property owners of the proposed millage rate and taxable value, allowing them to attend public hearings and provide input.
- 100. D — Eminent domain is the power of the government to take private property for public use, with the requirement that the property owner be paid just compensation for the taking.