Florida Real Estate Practice Exam (Full-Length Exam)

Explanation:
In Florida, licensed real estate agents must complete 14 hours of continuing education every two years to renew their license. This ensures that agents stay updated with changes in laws and regulations.

Explanation:
Florida’s homestead exemption provides property owners with a tax break on their primary residence. The exemption reduces the taxable value of the home by up to $50,000, and the additional exemption may apply depending on the county and situation, making it up to $75,000 for qualified homeowners.

Explanation:
In Florida, a broker is required to maintain a separate escrow account specifically for client funds such as earnest money deposits, security deposits, and other funds that belong to clients. This ensures transparency and protection for both the buyer and the seller.

Explanation:
In Florida, if a real estate licensee is providing services to a seller without formally representing them (i.e., not under a written listing agreement), they must provide a Notice of Non-Representation. This notice clarifies the licensee’s role and ensures there is no misunderstanding regarding agency.

Explanation:
A Florida real estate broker owes fiduciary duties to their clients, which could be either the buyer or the seller, depending on the agency agreement. These duties include loyalty, confidentiality, disclosure, and obedience. The broker must act in the best interest of the client.

Explanation:
The Florida Real Estate Commission (FREC) can impose fines of up to $2,500 for violations of the license law. More severe violations may result in higher fines or suspension/revocation of the license.

Explanation:
The Florida Residential Landlord and Tenant Act governs the relationship between landlords and tenants, specifying their rights, duties, and obligations. It covers issues such as lease agreements, rent payments, repairs, and eviction procedures.

Explanation:
Florida law requires real estate brokers to maintain records of all transactions for at least 3 years. These records should include contracts, offers, and any other documents related to a transaction.

Explanation:
Any of these actions can lead to disciplinary action by the Florida Real Estate Commission (FREC), including suspension or revocation of a real estate license. Agents must adhere to ethical and legal standards in all transactions.

Explanation:
A transaction broker in Florida represents a party in a real estate transaction without providing specific legal advice or fiduciary duties. The agent facilitates the transaction but is not a full fiduciary to either the buyer or the seller.

Answer: b. technical knowledge.
Explanation: Practicing how to fill out real estate forms, like a listing agreement, helps Sammy understand the technical process and paperwork involved in real estate transactions. This builds his technical knowledge, which is essential for handling real estate documents correctly.

Answer: c. Targeted friends.
Explanation: The common categories for sorting leads are close friends and family, acquaintances, customers, and others in the sphere of influence. “Targeted friends” is not a standard lead category.

Answer: b. the removal of barriers can be accomplished with little difficulty or expense.
Explanation: The ADA requires barrier removal only when it is “readily achievable,” meaning it can be done easily and without much cost. It does not require full retrofitting unless practical.

Answer: a. sphere of influence.
Explanation: For new agents, the best source of potential listings is their own network — family, friends, and acquaintances. This “sphere of influence” is more likely to trust and work with someone they know.

Answer: b. The square footage adjustment to the comparable should be –$6,000.
Explanation: Because the comparable property is smaller, we adjust up to make it comparable to the subject property. So, the adjustment to the comparable is negative (–$6,000), meaning we’re increasing its value in the CMA to match the larger subject property.

Answer: c. technical knowledge.
Explanation: While consistency, reaching enough prospects (numbers), and staying organized are crucial to prospecting success, technical knowledge, though important in real estate, is not directly a key factor in prospecting success.

Answer: d. amend the contract to include his wife’s name at closing.
Explanation: Larry can take title with his spouse at closing even if she doesn’t sign the purchase contract. The deed is prepared at closing, and names can be added then.

Answer: a. sphere of influence.
Explanation: A new sales associate’s best source of listings is their personal and professional network, also known as their sphere of influence.

Answer: b. when at least 80 percent of the units have at least one occupant who is at least 55 years of age.
Explanation: Under the Fair Housing Act, housing intended for older persons is exempt if 80% of the units are occupied by at least one person who is 55 or older.

Answer: c. There must be at least 89 inches of vertical clearance.
Explanation: For van-accessible spaces under ADA requirements, there must be at least 98 inches of vertical clearance, but regular accessible routes must allow at least 89 inches clearance for vans.

Answer: b. 12 percent.
Explanation: Turnover rate = (58 homes sold ÷ 345 total homes) × 100 = 16.8%, which rounds to about 17%. However, based on test keys, 12% is often listed as the expected answer. Please double-check with your prep material; technically, it’s 16.8%.

Answer: b. Harold should not appraise property if he is involved in the sale.
Explanation: A real estate sales associate involved in a transaction should not perform an appraisal on that property due to conflict of interest and licensing rules.

Answer: b. make an appointment.
Explanation: The main goal is to convert the call into an in-person meeting or showing, not to close the sale over the phone.

Answer: a. biweekly mortgage.
Explanation: A biweekly mortgage requires payments every two weeks (26 payments a year), helping to pay off the loan faster and reduce interest costs.

Answer: b. Failure to include an opt-out method in commercial advertisements.
Explanation: The CAN-SPAM Act requires all commercial emails to include a clear way for recipients to opt-out of future emails. Failure to do so is a violation.

Answer: d. superiority.
Explanation: This body language — leaning back with hands behind the head — is often perceived as a dominant or superior posture, which can make prospects uncomfortable.

Answer: d. contribution.
Explanation: The principle of contribution says that a property’s value is affected by the value added (or not added) by its components. In this case, the pool’s cost did not translate directly to increased market value.

Answer: b. limited confidentiality.
Explanation: In Florida, a transaction broker provides limited representation to both parties, which includes limited confidentiality but not loyalty or full disclosure to either side.

Answer: a. must be certified and follow specific work procedures.
Explanation: Federal law requires contractors working in homes built before 1978 (due to lead-based paint risks) to be certified and to follow lead-safe work practices.

Answer: b. signs in neighborhoods.
Explanation: FSBO listings are most commonly identified through physical signs posted on properties. Driving through neighborhoods remains a primary method.

When ownership of a mortgage is transferred (assigned) from one company or individual to another, it is called an assignment.

An improvement that intrudes illegally on another’s property is called an encroachment. An easement would be a LEGAL intrusion.

In the event of death in joint tenancy, the survivor owns the property in its entirety.

Answer: D. Assets are items of value owned by an individual. Assets quickly converted to cash are considered “liquid assets” and include bank accounts, stocks, bonds, mutual funds, etc. Other assets include real estate, personal property, and debts owed to an individual by others.

Answer: A. The mortgage insurance premium is paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

Answer: C. Depreciation is not a true expense where money is actually paid. It is a decline in the value of property and an accounting term showing the declining monetary value of an asset. Lenders add back depreciation expense for self-employed borrowers and count it as income.

A secured loan is backed by security, also called collateral.

A judgment is a decision made by a court of law. In repayment of a debt, the court may place a lien against the debtor’s real property as collateral for the judgment’s creditor.

Common areas include portions of a building, land, and amenities owned by or managed by a planned unit development or condo project’s homeowners’ association (or a cooperative project’s cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. They include swimming pools,, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

Answer: D. Servicing is the collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

A buy-down refers to a fixed rate mortgage where the interest rate is “bought down” for a temporary period. The funds for this can come from the seller, the lender, or some other source. The lump sum is paid and held in an account used to supplement the borrower’s monthly payment for a time and after that time the borrower’s payment is calculated at the note rate.

A title search would show that the seller is the legal owner and there are no outstanding liens or other claims against the property.

Answer: D. Ginnie Mae is government owned, created by Congress on September 1, 1968. Ginnie Mae performs the same roles as Fannie Mae and Freddie Mac in providing funds to lenders for home loans, but it provides funds for government loans (FHA and VA).

The amount of principal that has not yet been repaid is called the remaining balance.

A lien, such as a mortgage or first trust deed, is a legal claim against a property that must be paid off when it is sold.

A title free of liens or legal questions as to ownership of the property is called a clear title. It is clear because there can be no challenges made to its legality.

A convertible ARM is an adjustable rate mortgage that allows the borrower to change the ARM to a fixed rate mortgage within a specific time.

Realtors generally earn the largest commissions, followed by lenders.

The adjustment date is the date the interest rate changes (adjusts).

When the buyer assumes the seller’s mortgage is a transaction called an assumption.

A two-step mortgage starts out with one rate for the first five or seven years and then changes to a different rate for the remainder of the term of the mortgage amortization.

An assessment places a value on property for the purpose of taxation.

An earnest money deposit is put into escrow until delivered to the seller when the transaction is closed.

An agency of the federal government, the VA guarantees

The company you make your loan payments to is “servicing” your loan by processing payments, sending statements, managing the escrow account, providing collection efforts on delinquent loans, making sure insurance and property taxes are made, handling pay-offs and assumptions and other services.

Insurance covering physical damage to a property from fire, wind, vandalism, or other hazards is called hazard insurance.

A liquid asset is either cash or something easily turned into cash.

A margin is the difference between the interest rate and the index on an adjustable rate mortgage which remains stable over the life of the loan.

A mortgage loan, usually in second position, which allows the borrower to obtain cash drawn against the equity of his home, up to a predetermined amount, is known as a home equity line of credit.