PRACTICE EXAM B

(The answers to the following questions are that the bottom of the page.)

1. A purchase money mortgage is a mortgage that
1. Includes funds for household equipment
2. Is taken back by the seller to make the sale possible
3. Is given by the purchaser as part of the purchase price
4. Can never be a second or junior mortgage.

a. II and III
b. I and III
c. II and IV
d. All of the above

2. A planning commission is not normally reponsible for:

a. Property tax computation
b. Sign control
c. Site plan approval
d. Subdivision plat approval

3. The purpose of Florida's green belt laws is to:

a. Ensure that green areas are incorporation into city planning.
b. Protect the remaining natural areas.
c. Protect natural wildlife areas.
d. Protect farmers' interests.

4. The law that requires lenders to provide borrowers with a "good faith" estimate of the closing costs and the time of initial loan application is the:

a. Truth in Lending Law (T.I.L)
b. RESPA
c. Regulation Z
d. Fair Housing Act

5. The policy of nonintervention by the government with regard to city and state planning and economics is known as:

a. Escheat
b. Eminent domain
c. Urban planning
d. Laissez-faire

6. Density is a primary consideration in:

a. Residential zoning
b. Commercial zoning
c. All of the above
d. None of the above.

7. Which of the following is (are) correct?
I. the comprehensive plan should be strictly enforced
II Zoning can be used to implement the comprehensive plan

a. I only
b. II only
c. I and II
d. None of the above

8. Deed preparation and documentary stamps on the deed are customarily a:

a. Debit to the seller
b. Credit to the seller
c. Debit to the buyer
d. Debit to the seller, credit to the buyer

9. The value of a property with a capitalization rate of 10% is $100,000. If the capitalization rate is increase to 12%, the value of the property will:

a. Decrease
b. Increase
c. Remain the same
d. Depreciate more rapidly

10. The operating expenses for a property are $10,000, NOI is $36,000, and the income from the laundry machines is $3,500. The effective gross income for this property is:

a. $26,000
b. $39,500
c. $46,000
d. $49,500

11. The effective gross income for a property is $30,000, the operating expense is $10,000. If an investor seeks a 10% return on his money, what should he pay for the property?

a. $300,000
b. $200,000
c. $100,000
d. $500,000

12. A contract for the sale of real estate is:

a. An executed agreement.
b. An expected agreement.
c. An executory agreement.
d. An anticipatory agreement

13. The term "merchantable title" or (marketable title) means:
a. The title has no effects.
b. The seller can transfer title.
c. An abstract certified to date can be prepared.
d. The title appears to be reasonably free of unacceptable defects.

14. Which of the following terms is least related to the other three?

a. Vendor
b. Grantor
c. Lender
d. Seller

15. The increase in value from the combining of two or more adjoining tracts into one parcel under a common ownership is known as:

a. Assemblage
b. Plottage
c. Progression
d. Attachment

16. Police power controls which of the following?
I. City planning
II. Building codes
III. Zoning
IV. Deed restrictions

a. II only
b. II and III
c. I, II, and III
d. I, II, III and IV

17. The portion of the state law that requires that local governments provide public services before development can commence is the:

a. Level of service provision
b. Infrastructure provision
c. Concurrency provision
d. Comprehensive plan provision

18. Which of the following best describe regulating density of units per acre:

a. Residential zoning
b. Commercial zoning
c. Industrial zoning
d. Agricultural zoning

19. Broker A is marketing golf course properties and hires a chauffeur to give the prospects brochures and drive the propects through the property. Before delivering prospects to the broker's office, the chauffeur points out attractive features of ownership such as the clubhouse, etc.

a. The chauffeur has violated Florida Statue 475.
b. The broker has violated Florida Statue 475
c. No law has been broken
d. The broker and the chauffeur violated 475.

20. Broker Bob has owned and operated ABC Realty, Inc. for a number of years and decides to expand into the market across the bay. He obtains another charter from the Secretary of State and incorporates Orange Realty with his wife as a director of the new corporation. Because his wife is not a licensee, Broker Bob becomes the qualifying broker and registers his wife with the F.R.E.C. for identification. Under these circumstances Broker Bob:

a.Can have only one principal office
b.Can operate only as Orange Realty or as ABC Realty, Inc. because a broker may not have two trade names
c. Has violated Florida Statutes by naming his wife as director for
Orange Realty.
d. Does not have to fully disclose to clients his separate interests in two real estate brokerage companies

21. Certain elements must first be found in a real estate sale contract involving a single family residence for it to be valid. Although the following elements are recommended, which one is not an absolute necessity.

a.Description of the land
b.Type of deed
c.Names of the parties
d.Sales price

22. Jones agreed to build a house and sell it to Smith in 180 days. Smith agreed to pay the negotiated price within 45 days after completion. The contract, before completion of the house may be referred to as:

a.An executory contract
b.An implied contract
c.A voidable contract
d.An executed contract

23. A sales agreement must contain which of the following?

a.Mortgage loan
b.Offer and acceptance
c.Date of the offer
d.Legal description of the property

24. In an option the optionee is:

a.The legal owner of record.
b.The prospective purchaser.
c.The assignor.
d.The assignee.

25.The withdrawal of an offer before acceptance is called:

a. Reversion
b. Recision
c. Rejection
d. Revocation

26. Acceptance of a sales contract is accomplished when:

a. The salesperson signs the sales contract.
b. The offeree signs the sales contract and the communicates the acceptance to the offeror.
c. The offeror signs the sales contract.
d. The broker signs the sales contract

27.A broker receives a $100.00 advance fee. How much of it must the broker immediately deposit?

a.$100.00
b.$75.00
c.$50.00
d.$25.00

28. If there are only three salespeople in an office, a policy manual is:

a.Of little use
b.Required by F.R.E.C.
c.A good practice to have in an office
of any size.
d. Required in offices with 5 or more
salespeople

29. Broker Brown has a temporary office in a development.Sales agents hand out sales brochures and info at the site. Which applies?

a.Broker Brown must have office license.
b. A branch office license is not required since only sales material are distributed and no transactions are concluded at the site.
c. When a salesperson is representing a broker, the place of business is a branch off.
d. Does not require branch office but must
be registered with F.R.E.C.

30.Two days before a closing is scheduled, a broker discovers that his license has just expired. What should the seller do?

a. Pay the broker his commission at closing.
b. Place the commission in escrow until the broker gets his license in order.
c. Refuse to pay the broker his commission
d. Report the broker to F.R.E.C.

31. Both the seller and buyer in a commercial transaction are represented by the same brokerage firm.

a.This is a dual agency violated F.S.475.
b. This is legal, provided both buyer and seller have received transaction notices
c. This is legal provided the broker has designated a salesperson for the buyer and one for the seller.
d. This is legal if the buyer or seller allow broker to change to a No Representation Broker.

32. Smith deeds property to Johnson for the period of Wilsonâ€Ts life. The property is to revert back to Smith at Wilsonâ€Ts death. What type of estate does Johnson have?

a.Life estate
b.Remainder estate
c.Fee simple estate
d.Estate for years.

33. A life estate involves
I. The interest of a remainderman
II. The proceeds from a life insurance policy
III. The interest in property held by a person as long as he lives.
IV. A fee simple estate

a. I and IV
b. II and III
c. III only
d. None of the above

34. A licensed real estate salesperson may do which of the following?

a.Employ other real estate people.
b.Hang the license in their own home, zoning permitting.
c. Buy property for his or her own account.
d. Open a trust account separate from the employing broker.

35. The buyer purchased a two bedroom condominium. He now holds:

a. A freehold interest in his unit.
b. A propriety lease.
c. A reversionary interest.
d. A leasehold estate.

ANSWERS