Final Exam MDC Realtor Study Guide
Test.
Insulation is rated by its ability to resist - CORRECT ANSWER heat flow
A man successfully negotiated (and was paid for) the sale of a Federal Communications Commission
license for a television station. He is NOT a licensed real estate broker or sales associate. The man -
CORRECT ANSWER has not violated F.S. 475.
Which statement is TRUE regarding the monthly payments on a 30-year, fully amortized loan? -
CORRECT ANSWER Initially, interest is the larger portion of the payment.
Which element is NOT essential in a valid real estate sale contract? - CORRECT ANSWER An earnest
money deposit
The DBPR may issue which penalty for an initial offense of a minor violation by a licensee? - CORRECT
ANSWER Notice of noncompliance
A title theory state is one in which a mortgage - CORRECT ANSWER transfers title to the lender or escrow
agent until the loan is paid.
A broker's license was involuntary inactive for two years and one month. To operate again as an active
licensee, the broker must complete - CORRECT ANSWER FREC Course I and pass the sales associate's
licensing exam.
Your seller owns a home appraised at $52,500. She still owes $32,760 on the first mortgage and $4,200
on a second mortgage. Your sales commission will be $3,640. What is your seller's equity in the home? -
CORRECT ANSWER $15,540
The answer is $15,540. The solution is: $52,500 appraised value - $32,760 first mortgage - $4,200 second
mortgage = $15,540 equity.
,A licensed real estate broker has a buyer who is interested in investing in income-producing property.
The broker finds a property producing net income of $1,750 per month. The buyer informs the broker
that she will buy the property if she can get it for a price that will return 14 percent per year on her
investment. If the desired 14 percent rate of return is regarded as a 14 percent capitalization rate, what
will the buyer be willing to pay for the property? - CORRECT ANSWER $150,000
The answer is $150,000. The solution is: $1,750 monthly net income × 12 months = $21,000 NOI;
$21,000 ÷ .14 cap rate = $150,000 target price.
A licensee makes a statement that is material to the transaction as if it were a fact when the licensee
does NOT know if the statement is TRUE or FALSE, and the buyer relies on the statement. As a result of
the statement made by the licensee, the buyer suffers damages. This situation constitutes - CORRECT
ANSWER fraud.
The purchase price of a business minus the value of the tangible assets of that business equals the
intangible assets of the business, referred to as - CORRECT ANSWER Goodwill.
Business brokers appraise businesses using appraisal methods similar to real estate appraisal EXCEPT for
the additional technique of - CORRECT ANSWER liquidation analysis.
The Florida Real Estate Commission must notify which agency when it takes disciplinary action against
any of the agency's licensees? - CORRECT ANSWER Division of Florida Condominiums, Timeshares, and
Mobile Homes
A licensed real estate broker has been hired by a lender to appraise a home for a buyer who has made
application for an FHA loan. Which statement is TRUE regarding this situation? - CORRECT ANSWER The
broker is required to be a state-certified appraiser to perform this appraisal assignment.
The only broker for a firm had her license revoked. What action, if any, will be taken against the sales
associates' licenses registered under the broker? - CORRECT ANSWER The licenses will be placed in
involuntary inactive status.
Essential elements of a deed do NOT include - CORRECT ANSWER signature of a competent grantee.
, The answer is SIGNATURE OF A COMPETENT GRANTEE. A competent grantor (not grantee) must sign the
deed.
A real estate brokerage company is a transaction broker for a buyer. The buyer wants to purchase a new
home so the sales associate takes him to three model centers listed by three competing real estate
companies. The sales associate must give the no brokerage relationship notice to - CORRECT ANSWER
The answer is NO ONE.
Effective July 1, 2008, real estate licensees are no longer required to give customers the transaction
broker notice. Licensees are also not required to give a disclosure notice at model centers.
A broker who changes business address must notify the Commission of the address change within how
many days? - CORRECT ANSWER 10
What would be the total required taxes for the loans on a $47,500 tract that sold with $10,000 cash
down, a new second mortgage of $15,500, and an assumed mortgage of $22,000 that was previously
recorded? - CORRECT ANSWER The answer is $162.25.
The solution is: Doc stamps on new note: $15,500 ÷ $100 increments × $.35 rate = $54.25; Doc stamps
on assumed note: $22,000 ÷ $100 increments × $.35 rate = $77.00; Intangible tax on new mortgage:
$15,500 × $.002 = $31.00; $54.25 + $77.00 + $31.00 = $162.25 taxes for the mortgage loans.
Which estate includes the right of survivorship? - CORRECT ANSWER Joint tenancy
A property closes on April 8, with the day of closing charged to the seller. The annual property taxes are
$1,486. Which entry will appear on the closing statement for the property taxes? - CORRECT ANSWER
Debit to seller and credit to buyer in the amount of $398.98
The answer is DEBIT TO SELLER AND CREDIT TO BUYER IN THE AMOUNT OF $398.98. Taxes are paid in
arrears. Therefore, calculate number of days seller is responsible for paying: January (31) + February (28)
+ March (31) + April (8) = 98 days. $1,486 ÷ 365 days × 98 days = $398.98 seller owes, so debit seller and
credit buyer.
