4.
Mark bought a house in an old neighborhood and remodeled it with high-end materials. He even hired a home decorator to give the last touches to it. The house looked beautiful, and Mark was pleased with it. However, a year later his employer offered him a better job in a distant location, and Mark decided to sell the house before relocating. After all, he would make good money on the sale because all the improvements he did to the house, and he will be able to buy in his new location instead of renting. Mark hired realtor Trevor who came by the house and prepared a Comparative Market Analysis for Mark. The results of the report were very disappointing for him because the house has not acquired enough equity to make the profit he imagined. This is an example of:
a. External Obsolencence
b. Overimprovement
c. Market Conditions
d. Physical Obsolencence
An overimprovement occurs when an owner invests more money than what is reasonably expected to recapture. External obsolescence is any loss in value due to changes in the neighborhood or area where the house is located, for example, an active Railtrack, a new speedway and anything that can make the location less desirable by prospective buyers. External obsolescence is incurable because it is out of the control of the property owner. Physical obsolescence is directly related to the condition of the property such as wear and tear, structural issues, defective air conditioning, old roof.
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7.
The four essential elements of a valid contract are:
a. The contractual capacity of the parties, Earnest money, Legal purpose, Consideration.
b. Legal purpose, Consideration, Offer and acceptance, Notarization.
c. Offer and acceptance, Consideration, Acknowledgment, Contractual capacity of the parties.
d. Consideration, Offer and acceptance, Contractual capacity of the parties, Legal purpose.
For a real estate contract to be legally sufficient in Florida, the parties must be of contractual legal capacity, meaning that they are not mentally disabled and are of legal age to contract. Also, there must be consideration, which means the benefits each party bargains for. There should also be offer and acceptance; both parties need to agree on the terms of the contract voluntarily. The contract also should have a legal purpose, avoiding any illegal provision on it like establishing payments of commissions to parties who are not licensed. There is no legal need to acknowledge or notarize a real estate contract, nor to have earnest money or acknowledgment.
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8.
Peter rents an office in a class A building in FL. He pays a monthly amount of $2,500 on an annual lease. The monthly payment includes the use of internet, electricity and cleaning. Peter has a:
a. Net lease
b. Percentage lease
c. All inclusive Lease
d. Gross Lease
In a gross lease in Florida, the tenant (lessee) pays a fixed amount that can include the payment for utilities and other related services while the landlord (lessor) pays for insurance, taxes, maintenance, and utilities. The net lease also is known as "triple net," on the contrary, makes the tenant responsible for expenses of maintenance, utilities, taxes, and insurance. The percentage lease stipulates that the tenant will pay rent based on the gross sales received from his business in the leased property. There is no all-inclusive lease.
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13.
Joshua's father is a real estate investor in Florida. He purchases vacant lots and constructs single-family homes. He has three houses finished that he needs to sell. In the summer, Joshua, who just graduated from high school, was looking for something to do that could bring him some income to save for a car he wanted to buy. The father asked Joshua to help him sell the houses and promised that he would pay him $1,000 for each house sold. Joshua accepted and spent the whole summer doing open houses and trying to find qualified buyers for the houses but without success. At the end of the summer, the houses were still on the market. Under the provisions of Florida Statute 475 this:
a. Is permissible because there's an exception that allows relatives to sell property as long as the compensation does not exceed $1,000.
b. is a violation of the statute because only a real estate licensee can provide real estate services and receive compensation for it.
c. is a violation of the statute, although only the father violated it because he was the one offering to pay a commision.
d. is not a violation. Neither Joshua nor his father violated the statute because the houses were not sold and therefore no commission was paid.
This scenario is a violation of the Florida real estate law because only a real estate licensee can provide real estate services and receive compensation for it. It is a violation of Chapter 475 to provide real estate services to others for compensation of any type if the person providing such services does not hold a current and active real estate license at the time, unless specifically exempted by the law. It is a third-degree felony with a penalty of not more than $5,000 and/or up to five years in jail per offense. There is no exception for relatives or compensation under $1,000. Even though no commission was paid, both father and son violated the statute with their agreement.
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16.
Linda Mae is hired by a landlord to rent his property in Florida. She lists the property and advertises it in social media. Immediately she receives a call from a prospective tenant. They are a family of four, from Argentina and want to establish their new residence in the area. Linda Mae makes an appointment and shows the property to the family the next day in the morning. They fall in love with the property and offer to provide their deposit and all their documentation that same day to secure the rent. Linda Mae calls her landlord to give him the good news. The landlord asks about the tenants, and when he finds out that they are Hispanic, he refuses to accept them. As much as Linda Mae tries to persuade him, he refuses to accept those tenants. What should Linda Mae do now?
a. Linda Mae should tell the landlord that his position is discriminatory and violates the Florida Fair Housing Act, therefore if he is not willing to reconsider his position she is withdrawing from the listing.
b. Linda Mae should tell the tenants that the Landlord does not rent to Hispanic families and that she will look for another property for them.
c. Linda Mae should tell the tenants that the landlord withdrew the property from the market because it needs some unexpected repair.
d. Linda Mae should tell the landlord that he must rent to the applicant's to avoid a law suit.
The Florida Fair Housing Act prohibits discriminatory acts based on race, sex, disability, nationality, religion, color, or familial status. Real Estate licensees must ensure there is equal access to housing. Any charge of discrimination is considered valid by HUD unless there is evidence that can refute such charge. In a case of discrimination in which a licensee is involved, the burden of proof is placed on the broker to prove his/her innocence to HUD. Also, the Florida Real Estate Commission might initiate disciplinary proceedings against the licensee.
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17.
A homestead property is located outside the city limits in Pasco County, FL. The assessment value of the property is $190,000.00. The city tax rate is 7.8 mills, the county tax rate is 9.8 mills, and the school board's rate is 5.7 mills. The owner is an army veteran with 10% disability as a result of his service in Iraq. He is also a widower and has qualified and received homestead tax exemption. How much does the owner have to pay for property taxes?
a. $1,318.10
b. $ 766.65
c. $1,088.10
d. $2,183.15
To calculate the property taxes, you take the following steps: 1. You should remember that the school board only recognizes the base exemption of $25,000.00. City and County, on the contrary, recognize the entitlement of the owner to an additional $25,000 exemption when the property's assessed value is greater than $75,000.00. 2. Figure out Taxable Value for School Taxes $190,000 assessed value - $25,000 base homestead exemption - $5,000 additional exemption for service disability - $500 widower exemption = $ 159,500.00 taxable value for school taxes. 3. Figure out Taxable Value for County Taxes $190,000 assessed value - $50,000 homestead exemption - $5,000 additional exemption for service disability - $5,000 widower exemption = $130,000 taxable value for county taxes. 4. Figure out Tax Due $ 159, 500.00 x .0057 = $ 909.15 school taxes $ 130,000.00 x .0098 = $ 1,274.00 county taxes City taxes do not apply because the property is out of city limits. $909.15 + $1,274.00 = $2,183.15
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19.
Marlon is a listing agent that just took a listing that calls for a graduated sales commission structure. The commission is 4% for the first $400,000 of the sale price. 5.5% on the next $100,000 and 7% of the amount over $500,000. What is the total commission if the property sells for $575,000?
a. $21,500.00
b. $23,500.00
c. $25,750.00
d. $26,750.00
Calculate the answer as follows: $400,000 x 4% = $16,000 $100,000 x 5.5% = $5,500.00 $75,000 x 7% = $5,250.00 $16,000 + $5,500 + $5,250.00 = $26,750.00
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20.
Real estate licensees provide specialized services to others for compensation. They market their expert information and knowledge in three meaningful areas:
a. Property transfer, maintenance companies, and insurance companies.
b. Property transfer, market conditions, and how to market real estate and businesses.
c. Market conditions, schools in the area, and the population in the area.
d. How to market real estate and businesses, knowledge of termites and mold.
A competent real estate licensee must know the legal steps and requirements to transfer property and of the conditions that can invalidate a real estate contract. They also need to know the changes in market conditions for sales and leases, the changes in the zoning laws and the building moratoriums. Finally, they need to know the most effective ways to market each of the listings they procure. To be an expert, a licensee does not need to know maintenance or insurance companies, nor be knowledgable on schools and populations of the area; this information would be helpful to the clients but is not determinant to the experience of the agent. An agent should never provide information about mold or termites other than recommending the buyers to seek an inspection to avoid conflicts of interest or misrepresentations.
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