C. Loan Estimate Note: The Loan Estimate provides buyers with the costs they are likely to pay at settlement and is closely related to the actual costs at closing on the closing disclosure. Which document provides an estimate of the costs a buyer is likely to pay at settlement before the closing? A. Abstract of title D. Real Estate Professional Practice Act Note: The Real Estate Professional Practice Act was created by the Florida legislature to establish the legal rights and responsibilities of real estate licensees. Chapter 475 of the Florida statutes, called the ______, sets forth the law regarding real estate brokers, sales associates, and real estate schools. A. Administrative Code B. It will reduce the amount of land that can be used or developed. Appraiser Kali determines that the value of a piece of land with an endangered species present is less than it would be without the presence of that species. What's the likely explanation for that? A. It will cost a considerable amount of money to move the endangered species. A. 10 acres Note: A section in the rectangular survey system is 640 acres. Looking at the NE 1/4 of the section narrows the size to 160 acres (640 ÷ 4). The NW 1/4 of that area is 40 acres (160 ÷ 4). The SE 1/4 of that are is 10 acres (40 ÷ 4). How large is this area of a rectangular survey: The SE 1/4 of the NW 1/4 of the NE 1/4 of Section 6 in a township? A. 10 acres B. Capital gain or capital loss What would an investor get after subtracting the adjusted basis from an investment property's sales price? A. Appreciation of depreciation B. Business assets are separated from personal assets. Note: Business assets are separated from personal assets, which are not part of the sale. In the sale of a business, which generally involves 12 steps, something happens with the assets early in the process. What is it? A. Business assets and personal assets are combined. C. Leasehold Andrea, a commercial developer, is planning to build an apartment complex on a lot in Miami and is using the land, pledged to the lender as an estate for years, as collateral for the loan. What type of mortgage is this? A. Fee
Simple A. A Federal Home Loan Bank Cheryl is getting her mortgage through her small-town credit union, called Mid-State Meadows Credit Union. Mid-State recently needed extra funding. Which of these agencies most likely provided that funding? A. A Federal Home Loan Bank D. Sherlock Holmes Real Estate Brokerage Note: A broker price opinion is usually performed by a hired real estate sales associate or broker when a financial institution believes the expense of ordering an appraisal would be unnecessary and time-consuming. The Loanly Officers Bank of Florida wants to determine the approximate selling price of a property in Gainesville. Where would they go to achieve their goal? A. I-Drive By Appraisal Services B. Nothing Note: Under TILA, ads that mention general financing terms, such as "low down payment" or "easy financing," do not require additional disclosure. If Bo had gotten more specific (e.g., "10-year loan with 0% down") he would need to include more information. Bo's real estate ad states: "Custom homes for sale with scenic mountain views. Easy financing and low down payments." What else must be included in the ad in order for it to comply with TILA? A. A full disclosure, including the APR and other loan terms C. Three Note: Development and construction have three phases that each project goes through; land acquisition, subdividing and development. There are ______ phases of development and construction that each project goes through. A. Five A. Deed of trust Note: Three parties are involved when a deed of trust is used: the lender (beneficiary), the borrower (trustor), and a neutral third party (trustee). The trustee holds the title on loans when a deed of trust is used. A trustee is holding title to Cassandra's house until the loan is paid in full. Which type of security instrument was used? A. Deed of trust C. Certified residential appraiser Note: This is the scope of a certified residential appraiser. This level of appraiser must have 2,500 hours of appraisal experience. These individuals may appraise residential property only, and only of one to four units, without regard to transaction value or complexity. A. Appraiser Trainee D. Real Estate Professional Practice Act Chapter 475 of the Florida statutes sets forth the law regarding real estate brokers, sales associates, and real estate schools. What is this law called? A. Administrative Code B. The seller isn't obligated to proactively disclose property defects or get a home inspection. Note: In caveat emptor states, while sellers can't lie outright or actively conceal a problem—and must honestly answer prospective buyers' questions when asked—they aren't obligated to point out the home's flaws or defects to buyers. Caveat emptor could best be described as which of the following? A. The seller is liable for providing a complete and accurate picture of the condition of the property. D. The seller will defend against all claims against the property's title. Note: With a general warranty deed, the seller will defend against all claims on title; with a special warranty deed, the seller warrants only those claims that stem from when he owned the property. Which of these guarantees is offered by a general warranty deed but not a special warranty deed? A. The property is free of debt or other claims taken on by the grantor during the ownership period. C. $4,000 Note: To find the tax amount, multiply the assessed value by the tax rate ($160,000 x 0.025). Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes? A. $160 A. Buyer has inspection, buyer makes offer, seller accepts offer Note: If the seller won't accept an offer with an inspection contingency, a buyer could have a professional inspection done before submitting the offer and waive the inspection contingency if the buyer still wanted to make an offer. If a seller asks a buyer to waive the inspection contingency, how could the transaction process transpire and still protect the buyer? A. Buyer has inspection, buyer makes offer, seller accepts offer B. It prevents families from being displaced under certain conditions. Note: The Florida Homestead Law prevents families from being displaced. If the homestead is titled in the name of only one spouse and that spouse dies, the surviving spouse receives a life estate to the property. Any children receive a remainder estate. Which of the following is true about the Florida Homestead Law? A. It allows families to stay in homes which have been foreclosed upon if there are children present. D. Offer and acceptance Note: The signatures of the parties guarantees that they all understand and agree to the terms of the contract. Offer and acceptance is also known as mutual acceptance. Which element of a valid contract is established by getting the signatures of all parties? A. Competent parties D. The seller will defend against all claims against the property's title. Note: With a general warranty deed, the seller will defend against all claims on title; with a special warranty deed, the seller warrants only those claims that stem from when he owned the property. Which of these guarantees is offered by a general warranty deed but not a special warranty deed? A. The property is free of debt or other claims taken on by the grantor during the
ownership period. A. $1,000 and one year in jail Note: A first-degree misdemeanor—such as failing to provide accurate rental information for a fee—has a maximum penalty of $1,000 per violation and up to one year in jail. What is the maximum penalty for a first-degree misdemeanor in Florida? A. $1,000 and one year in jail C. Purchase money mortgage Note: A purchase money mortgage is the term for seller financing that's typically used to bridge the gap between the home's list price and the institutional loan, though it can also be used to finance the entire purchase price. The Hendersons don't have enough money to make the full 20% down payment their institutional lender requires. To close the sale, the seller is willing to finance a loan for the amount between the home's list price and what the institutional lender is willing to loan. What's this type of financing called? A. Equity mortgage B. $147,000 Note: This question asks you to find the value of a house based on the GRM of 147. The value of the home that rents for $820 monthly isn't relevant to your calculation, which is 147 x $1,000 = $147,000. Remember that GRM is just an estimate of value. The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM? A. $120,540 C. Incentive zoning Note: Incentive zoning occurs when a municipality allows a property owner to proceed with an otherwise-prohibited type of construction in return for improvements that will benefit the community. The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this? A. Aesthetic zoning A. One of the previous two Note: The homestead exemption must have been in place for one of the two preceding years, and the benefit transferred is limited to $500,000. Homeowners may transfer the SOH benefit to a subsequent home. In order to do this, their homestead exemption must have been in place on their current home for _________________ preceding years. A. One of the previous two A. Any ad or business practice that causes or is likely to cause injury Note: Any ad or business practice that causes or is likely to cause injury is considered an unfair ad, according to the FTC's Unfairness Policy Statement. What does the Federal Trade Commission consider to be an unfair ad? A. Any ad or business practice that causes or is likely to cause injury D. A material fact would cause a reasonable person to either act or not act, if that fact were known. Note: A material fact would cause a reasonable person to not take an action that would otherwise be taken, or take an action that would otherwise not be taken. Which of the following statements is true of a material fact in Florida? A. A material fact is known only to real estate licensees. B. Quasi-judicial Note: The FREC's quasi-judicial responsibilities include the power to grant or deny license applications, determine license law violations, and impose penalties. Beatrice just had her license application denied by the commission. Which branch of the commission denied her application? A. Executive B. $1,152 Note: The maximum house payment is the lesser of the amounts calculated using both ratios. DTI: $4,200 x .36 = $1,512. $1,512 - $360 = $1,152. Housing ratio: $4,200 x .28 = $1,176. Phoebe's maximum payment is $1,152. Phoebe's gross monthly income is $4,200, and she has $360 in monthly non-housing debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment she can afford? A. $1,075
C. Site plan Note: The planning commission has final authority over three things: subdivision plat approval, site plans, and sign control. A planning commission has final authority over which of these options? A. Community goals B. "That's a great way to meet our objectives." Note: Your response should be, "That's a great way to meet our objectives." Bulk zoning can apply to both residential and commercial zones, and it doesn't increase density. 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. Moratorium Note: A temporary halt on new building is a moratorium. Builders weren't allowed to develop new properties in Cityville for six months. This is likely because the city had enacted a ______. A. Condemnation D. Through setbacks Note: One of the ways that bulk zoning achieves its objectives is through setbacks. Maximum building heights and clearance from other buildings help control building density, which is the aim of bulk zoning. What's one of the ways that bulk zoning achieves its objectives? A. Through architectural style requirements A. The commission and local legislative body, with input from the public. Note: It takes a village to create a comprehensive plan. Based on background studies, the planning commission puts forth a recommendation to the local government and citizens to approve or amend. 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. When the term of the listing agreement exceeds one year Note: A listing agreement with a term that exceeds one year falls into the category of contract types that are covered by the statute of frauds and must be in writing to be enforceable. When does the listing agreement between you and a seller client need to be in writing to be enforceable? A. Always D. Record the deed in his name Note: Recording provides constructive notice of Jericho's purchase. Failure to record makes it possible for others to record interests in the future. Title insurance protects Jericho from claims from the past, but the title search limits that concern. Cheng is selling his property to Jericho. What's the best method Jericho can use to ensure his interest in the property? A. Ensure that Cheng signs the deed. D. Sherry promises to give Brent a ride home from work, and then doesn't show up. Note: A promise is a unilateral contract if there's no reciprocal promise. Breaching a contract in which one party performs isn't a unilateral contract. Which of these situations represents a unilateral contract? A. Cain sells Trenton his bike. D. Offer and acceptance Note: The signatures of the parties guarantees that they all understand and agree to the terms of the contract. Offer and acceptance is also known as mutual acceptance. Which element of a valid contract is established by getting the signatures of all parties? A. Competent parties D. Sales contracts Note: In Florida, licensed sales associates and licensees have the authority to prepare sales contracts, along with option contracts, listing agreements, buyer representation agreements, and leases with a term of less than one year. In Florida, sales associates have legal authority to prepare ______________. A. Any type of legal document related to real estate D. One party has met most but not all of the terms specified in the contract, and may be required to pay damages for the terms not met. Note: Substantial performance of a contract occurs when one party has met most, but not all, of the terms specified in the contract and may be required to pay damages for the terms not met. When does substantial performance of a contract occur? A. Both parties fully meet the contract's terms. D. Two: borrower and lender Note: A mortgage involves two parties: the borrower and the lender. A trustee is only used with a deed of trust. How many parties does a mortgage involve? A. Five: borrower, lender, trustee, trustor, and beneficiary C. The lender can get a deficiency judgment against the seller. Note: If the buyer doesn't make the payments, the lender can sell the house. If the proceeds aren't enough to pay off what's owed, the lender can get a deficiency judgment against the seller. Which of the following is a risk that the seller assumes when agreeing to a sale subject to a mortgage? A. If the seller's lender learns of the arrangement, the seller will have to pay a fine. D. They may be voluntary or involuntary. Note: Special assessments may be voluntary or involuntary, and like ad valorem taxes, they become liens against the property on which they are imposed. Which of the following is true about special assessments? A. They are always involuntary. D. $500,000 Note: The SOH benefit transferred is limited to $500,000. What is the maximum amount of SOH protections which can be transferred to a new home? A.
$10,000 B. Amortized over the life of the loan Note: Closing costs are added to the cost basis, are sometimes deductible in the year paid, and are often amortized over the life of the loan. Which one of the following could apply to closing costs for an investment property? A. Amortized over 17 years C. Property owners may petition the VAB without first meeting with the county property appraiser. Note: Property owners have several options for protesting the county appraiser's assessment (an informal meeting with the appraiser, submitting a petition to the VAB, and filing a lawsuit.) None of these options must be done before the options - property owners may choose to engage in some or all of these protest options. Which of the following is true regarding the tax protest procedure in Florida? A. Property owners have no option but to seek relief through the courts. A. 120 days Note: The buyer has 120 days to use the funds, according to the guidelines of the first-time homebuyer program. Homebuyers who withdraw individual retirement account (IRA) funds under the first-time homebuyer program must use those funds within how long to acquire, build, or improve a residence, or to contribute toward closing costs? A. 120 days B. 15% Note: Capital gains from property sales are taxed at a lower rate than other taxes. For the 33% income tax bracket, the taxable amount is 15%. Capital gains taxes are owed when a property is sold. What percentage is used to calculate capital gains taxes when a person is in the 33% tax bracket? A. 10% C. Portfolio Note: This is portfolio income, as classified by the IRS. Which one of the following is income that comes from investments, which includes capital gains, interest, and dividends? A. Active C. $50,000 Note: Homeowners can exempt $25,000 from school taxes and $50,000 from non-school taxes. In Florida, what is the amount of the homestead exemption available for non-school taxes? A. $25,000 C. Loan origination fee Note: The loan origination fee is deductible for homeowners. Mariel is buying a home and is looking forward to the tax deductions. She may deduct which of the following costs? A. Closing costs A. Xavier is guilty of commingling and conversion. Note: Because Xavier's balance fell below the amount required to cover the earnest money check, he's guilty of both commingling and conversion, even though he replaced the funds. Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue? A. Xavier is guilty of commingling and conversion. B. Jeannie's ad says the roof is new when it is really almost 10 years old. Note: Intentional misrepresentation is considered fraud, and Jeannie was less than truthful about the condition of the roof. Which of these scenarios would be considered fraud? A. Frank notes that his listing is in a city-approved urban renewal district. A. If the broker had complied with an EDO and a judgment were found against them. Note: Brokers who have had a judgment against them may file a claim if they acted according to an escrow disbursement order, and may be awarded up to $50,000 without having any penalties placed on them. When may brokers make a claim against the Florida Real Estate Recovery fund? A. If the broker had complied with an EDO and a judgment were found against them. D. $500 and 60 days in jail Note: Second-degree misdemeanors have a maximum penalty of $500 per violation and up to 60 days in jail. What is the maximum criminal penalty for a violation of a Florida statute that's considered a second-degree misdemeanor? A. $1,000 and one year in jail A. $1,000 and one year in jail Note: A first-degree misdemeanor—such as failing to provide accurate rental information for a fee—has a maximum penalty of $1,000 per violation and up to one year in jail. What is the maximum penalty for a first-degree misdemeanor in Florida? A. $1,000 and one year in jail C. An individual who voluntarily relinquishes his license in lieu of a trial can never reapply. Note: If you've given up your license so you didn't have to have a hearing, you can never reapply. Marcus is the subject of a disciplinary complaint and, in lieu of a hearing, he decides to give up his license. Which of the following statements is true? A. An individual must wait at least five years to reapply. A. All real property and personal property Note: All real property and personal property owned by an individual are affected by a general lien. What type of individual's property is affected by a general lien? A. All real property and personal property D. The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin. Note: The Fair Housing Act of 1968 made race, color, national origin, and religion protected classes and prohibits housing and housing financing discrimination. The ECOA prohibits discrimination based on any protected class. Which of these statements accurately describes finance- and housing-related legislation? A. As a stipulation of the Housing and Community Development Act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days. C. The seller/owner's net profits from the transaction Note: The act allows brokers to place a lien on the net profits from commercial transactions, not the property itself. The Commercial Real Estate Sales Lien Act allows brokers to place a lien on ______ in order to collect unpaid commission. A. The buyer's personal property D. Barbie owns two-thirds, and Midge owns one-third. Note: Joint tenancy includes the right of survivorship, so Ken's interest will pass to the other tenants. But because Midge bought in later than the others, she isn't considered a joint tenant. Ken's share will therefore pass entirely to Barbie. Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided? A. Barbie and
Midge each own 50%. B. No one may be registered under more than one trade name. Note: In Florida, no individual, partnership, or corporation may be registered under more than one trade name. Florida broker Harry is currently using the trade name Lupin Lookout Realty as his brokerage trade name. He wants to also use the trade name Dumbledore's Dealings Realty. Why would the Division of Real Estate have denied his application? A. Harry must pay a substantial fee for using a second trade name. B. Financial Note: Daniela has less income as a result of losing two tenants, and her expenses have increased. This is an example of financial risk, which refers to the ability of an investment to cover operating expenses through operations, borrowing, and equity. Daniella's rental property is barely covering her expenses. Two of her six tenants have moved out, and she has had to upgrade the building's heating and air conditioning systems. This is an example of which type of risk at work? A. Business C. Price Note: Price is the actual amount that a buyer pays for a property. It may be the same as the market value, or it may not. Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted? A. Appraisal C. Mete Note: Metes (measures) are the direction and distance of a line forming the boundary of the property. When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "north for 314 feet" represent? A. A benchmark C. Population size Note: General data is related to the area where the property is located, not the property itself. Which of the following is a piece of general data an appraiser may gather? A. Improvements made to a property B. Within the next business day of receipt Note: Escrow funds must be delivered to the broker/employer by the end of the next business day after receipt. By when must sales associates and broker associates deliver escrow funds to their broker/employer? A. Within the business day of receipt C. Plat map Note: The plat map is a detailed map of the given land, including streets, access roads, and measurements between features. A surveyor created a lot and block survey for a new residential development. The first thing she did when she surveyed the new neighborhood was to reference a metes and bounds land description. From there, she divided the land into numbered lots and blocks. This output is known as a _______. A. Benchmark C. Single agent Note: The only role that allows a person to act as a fiduciary in Florida is the role of a single agent. If Alison has agreed in writing to represent the fiduciary interests of Bruce, who is ready to buy his first home, she has agreed to act as a _______. A. General agent A. $1,064 Note: Calculate the debt and housing ratios that buyers need to meet both lending ratios. While Gunther qualifies for a payment of $1,368 under the total DTI, he only qualifies for $1,064 under the housing ratio ($3,800 x 28%). Gunther's gross monthly income is $3,800, and he has no monthly debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment Gunther can afford? A. $1,064 C. Increases Note: Supply and price move in opposite directions, so price increases when supply decreases. When there is less to go around, prices increase. This is the same thing as saying demand exceeds supply. As supply decreases, what happens to price? A. Decreases |
Which of these statements accurately describes finance and housing related legislation Quizlet
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