Live Stream Course Review Exam #2

Question 1 of 100

A buyer goes to court and demands specific performance. If the court agrees, the seller would have to

pay liquidated damages.
pay for title insurance.
convey title as agreed.
return the good faith deposit.

Question 2 of 100

Which is true about a promissory note?

It is not required to be part of a mortgage loan transaction.
It is the borrower’s pledge of collateral for the property.
It shows the loan amount, the interest rate, the term and the payment amount.
It may be foreclosed if the borrower defaults.

Question 3 of 100

Which of the following is NOT correct?

Florida is a lien theory state.
The exculpatory clause removes personal liability.
A package mortgage includes personal property.
In an amortized mortgage, as the loan is paid down, the interest portion of each payment increases.

Question 4 of 100

A broker may prepare

deeds.
purchase money mortgages.
promissory notes.
sales contracts.

Question 5 of 100

Which would prevent the enforcement of a real estate contract?

a contract in writing
a contract with an unlawful purpose
a contract with a lawful purpose
a meeting of the minds

Question 6 of 100

Which is NOT necessary for a deed to be valid and to transfer title?

Witnesses.
Consideration for the amount of the market value.
Acceptance.
Signature by the grantor.

Question 7 of 100

An option contract for real property must be in writing

only if for a period longer than one year.
to avoid misunderstandings.
if other than valuable consideration is use.
always.

Question 8 of 100

Which is NOT true regarding FHA mortgages?

The mortgage insurance premium is paid to FHA in full at closing, and has a monthly premium thereafter.
FHA insures fixed rate, adjustable rate and shared appreciation mortgages.
FHA allows either the borrower or the seller of the property to pay the points on an FHA mortgage loan.
The secretary of the Department of Housing and Urban Development establishes interest rates for FHA mortgages.

Question 9 of 100

When a mortgagee allows a new mortgagor to take personal liability on a note, and releases the original mortgagor’s liability, this is known as

an exception to the mortgage.
a foreclosure of the mortgage.
a taking subject to the mortgage.
a novation.

Question 10 of 100

The main reference lines running north to south in the government survey method are

latitudes.
longitudes.
meridians.
base lines.

Question 11 of 100

Which is correct about a listing taken by a broker when the seller says AI want $100,000 from the sale. Anything you get above that amount you can keep as your commission.

It is a legal exclusive listing.
It is a legal net listing.
It is a violation of Florida law for the broker to accept this listing.
The broker may legally keep any of the sales price above $100,000, even if the property sells for $145,000.

Question 12 of 100

Which is NOT correct about property descriptions by monuments?

Description is imprecise.
Monuments may be moved.
Expensive equipment is necessary.
References may be destroyed.

Question 13 of 100

Which is NOT necessary to make a valid real estate contract?

Legal description.
In writing.
Earnest money.
Offer and acceptance.

Question 14 of 100

Which original instrument or statement would a buyer not receive at or after closing?

a deed
a mortgage
a closing statement
a title insurance policy

Question 15 of 100

Which is NOT required for a broker to claim a commission?

An employment agreement
Be the procuring cause
Have shown the property
Hold a current active license

Question 16 of 100

A mortgage subordination clause

prevents the transfer of the property’s title while the loan is in force.
allows a lender to make a full substitution of borrowers.
allows a later mortgage lender to have higher priority.
lets the lender call due the remaining mortgage balance if the borrower goes into default.

Question 17 of 100

When is the FHA mortgage insurance premium paid?

at closing, then monthly
monthly
just at closing
semiannually

Question 18 of 100

A broker gets an exclusive right of sale listing on a house for $50,000.00 for ninety days if he promises to advertise it every week. The owner will pay a 7% commission. The broker advertises the property as promised. Forty-five days later, during the listing period, the owner sells the house to an old friend for $45,000.00. Which applies?

The owner owes the broker $3,500.00.
The owner does not have to pay the broker a commission.
The owner owes the broker $3,150.00.
The owner owes the broker a customary commission.

Question 19 of 100

The purpose of the constitutional homestead is

to allow only husband and wife to own property.
to prohibit a homestead from being foreclosed by the mortgage company.
to exempt execution.
to be sure the spouse gets at least 30% of the net distributable estate.

Question 20 of 100

Which is a unilateral contract?

contract for the sale of land
contract for deed
open listing contract
exclusive right of sale contract

Question 21 of 100

A written contract with terms and conditions stated is

multi-lateral.
implied.
parol.
expressed.

Question 22 of 100

Which affects the validity of a deed?

Failure to record
Failure to sign
Failure to acknowledge
Failure to have three witnesses

Question 23 of 100

A broker sells property subject to a contingency specifying return of deposit and cancellation of the contract if marketable title cannot be delivered by the closing date. At closing the owner cannot provide a clear title and the buyer’s $10,000 deposit is returned in full. Which is most correct?

The buyers can sue the owners for a clear title.
The owner should sue to retain the deposit.
The broker should sue the buyers for his commission.
There has been a rescission of the contract.

Question 24 of 100

Which is NOT correct about exclusive right of sale listings?

The listing should be in writing in order to be enforceable.
Payment of a commission is required even if the property is sold by the seller.
The listing should be signed by the seller.
The listing may have an indefinite time for expiration.

Question 25 of 100

A description of property using prominent physical features is called a description by

lot and block.
monuments.
topographical characteristics.
government survey.

Question 26 of 100

Which sources of finance have the least amount of government regulation?

real estate investment trusts
private individuals
savings associations
insurance companies

Question 27 of 100

The use of natural or other Amonuments in land surveying is

used to describe more rectangular land than any other method.
not a legal way of measuring.
outdated but still in many deeds (surveyors now place concrete and steel monuments).
more exact because of the type of instruments used.

Question 28 of 100

Acceptance of a sales contract is accomplished when

the sales associate signs the sales contract.
the offeree signs the sales contract.
the offeror signs the sales contract.
the broker signs the sales contract.

Question 29 of 100

Mortgage financing is being arranged for a small manufacturing plant. Various items of equipment which are in use and necessary for the operation of the plant are included in the mortgage. How will the equipment be treated in the financing transaction?

The equipment must be secured as additional collateral.
The equipment cannot be covered by the mortgage.
The equipment is automatically covered by the mortgage.
The equipment will be included if a package mortgage is used.

Question 30 of 100

John gives Lisa power of attorney to sign a listing on John’s house. Lisa enters into a listing contract with Broker Arthur for 8 months. Which is correct?

Brokers may not accept listings which are not signed directly by the seller.
The broker is authorized to accept any full-price offers.
This is a valid listing contract between seller and broker.
This is not a valid listing.

Question 31 of 100

A sales associate may record a sales contract only when

he hears the owner is planning to accept another offer.
he hears the owner is about to take out a new mortgage.
the purchaser demands it in order to protect her interests.
the owner authorizes it.

Question 32 of 100

What right gives the government the power to enforce zoning regulations?

escheat
police power
eminent domain
condemnation

Question 33 of 100

What is the opposite of north 10 degrees east?

north 10 degrees west
south 10 degrees east
south 10 degrees north
south 10 degrees west

Question 34 of 100

A broker has an open listing and shows a prospect the property two months later. The owner, twelve months later, sells the property to the same prospect. Which applies?

The owner will have to pay the broker a commission as the broker was the first one to show the property to the prospect.
There is no evidence that the broker was the procuring cause of the sale; therefore, the owner does not have to pay a commission.
There has been a violation of Chapter 475.
This is an oral, open listing and the owner is not liable for a commission on this type of listing.

Question 35 of 100

What clause in the mortgage allows the lender to accelerate the loan if the property is sold?

Prepayment clause
Subordination
Seisin
Due on sale

Question 36 of 100

A package mortgage includes

personal property.
multiple lenders.
multiple borrowers.
more than one parcel of real estate.

Question 37 of 100

Concerning listing agreements, a licensee must

close the property sale in order to be paid.
agree to obey any instructions given by the seller, including refusal to disclose defects.
make sure that the agreement renews automatically.
give the seller a copy of the agreement within 24 hours.

Question 38 of 100

A real estate contract must be

on the approved form.
signed by the broker.
written.
all of the above.

Question 39 of 100

A promissory note creates which of the following?

a secured mortgage
a personal obligation
a specific lien
a general lien

Question 40 of 100

An option contract for real property without consideration is

not an option.
voidable by the optionor.
voidable by the optionee.
valid and binding.

Question 41 of 100

A contract is executory when it is

not yet signed
not yet performed.
not yet acknowledged
signed by one but not accepted by one.

Question 42 of 100

When a party lists his property on an exclusive listing contract, which is correct?

He reserves the right to sell the property himself and lists with only one broker.
He will pay a commission to the broker no matter who sells the property.
He may list with more than one broker.
He gives the broker the right to sign contracts for him.

Question 43 of 100

If a buyer defaults on a sales contract, the seller may

sue for performance.
keep the buyer’s good faith deposit.
split the deposit with the broker.
any of the above

Question 44 of 100

Which is NOT an essential element of a real estate contract?

consideration
offer and acceptance
in writing and signed
witnessed

Question 45 of 100

The Guaranteed Loan Program is sponsored by

VA
the state government.
FHA Section 235.
FHA Section 207.

Question 46 of 100

What clause in a mortgage allows the mortgagor to call the entire balance due and payable?

financing
acceleration
take-out
release

Question 47 of 100

Liens for taxes and assessments have priority over private liens

with the exception of mechanics liens.
except what private liens have already been accrued. with exception of mortgages.
except for income tax liens.
without exception.

Question 48 of 100

A city levies a special assessment for paving in a neighborhood at a rate of $1.25 per square foot for each lot. One of the lots had dimensions of 21 yards wide by 95 feet deep. How much would the lot owner have to pay?

$118.75
$1,995.00
$5,985.00
$7,481.25

Question 49 of 100

The clause in a deed that shows the type of estate being conveyed is the

tenendum clause.
premises clause.
granting clause.
habendum clause.

Question 50 of 100

In which case, with regard to an abstract of title, may the attorney be found liable for an erroneous opinion?

the marital status of the grantor was misrepresented
the attorney guarantees the authenticity of the instruments
the grantor was insane
an unrecorded instrument outstanding is subsequently recorded

Question 51 of 100

Which NOT correct concerning VA loans?

Because of the VA guarantee, the loan to value ratio may be higher than an FHA loan.
No down payment is required.
Any eligible veteran may apply for the benefit.
A VA loan is never assumable, even for another veteran.

Question 52 of 100

A rescission of a contract is

a ratification.
an end to the contract, and a return to the status quo.
an amendment to the terms of the contract.
an escrow agreement.

Question 53 of 100

Which is a government insurance company?

FHA
Fannie Mae
The Department of Veteran’s Affairs
Ginnie Mae

Question 54 of 100

An amortized mortgage where the payment gradually increases is known as

a variable-rate mortgage.
a graduated payment mortgage.
a conventional mortgage.
an open-end mortgage.

Question 55 of 100

What is the name of the settlement statement used in a RESPA closing?

Loan Estimate.
Truth-in-Lending.
Closing Disclosure.
HUD-1 Settlement Statement.

Question 56 of 100

If you are not to be disturbed with claims upon your title, you would want a

warrant of seisin.
warrant of quiet enjoyment.
warrant of further assurance.
warrant forever.

Question 57 of 100

What requires a real estate sales contract to be in writing?

the statute of limitations
the statute of frauds
the Florida Association of REALTORS
the Florida real estate license law

Question 58 of 100

FHA section 245 is a program allowing

subsidized interest payments
residential loans exceeding four units.
periodic adjustment of the interest rate.
gradual increase of payment.

Question 59 of 100

In order to find the calculated rate on an adjustable rate mortgage, one would

deduct the principal from the interest payments.
add the principal and interest and multiply by 12.
add the margin to the index.
deduct the index from the margin.

Question 60 of 100

An offer may be terminated EXCEPT by

notice revoking the offer after consideration is given.
expiration of a reasonable or specified time period.
presenting the offer on a timely basis.
death or insanity of either party.

Question 61 of 100

The deed used to transfer title of a minor’s property is a

personal representative’s deed.
committee’s deed.
guardian’s deed.
quitclaim deed.

Question 62 of 100

In Florida, how many witnesses are required to sign a contract for real property?

4
2, if the property is homestead
1
none

Question 63 of 100

Which is correct about net listings?

The sales associate is guaranteed a net amount of commission.
The broker is guaranteed a net amount of commission.
The seller always gets less than the net required in the listing.
The broker’s commission may not exceed a customary commission.

Question 64 of 100

If a seller signed a listing by which the broker is entitled to any amount over the maximum amount stipulated by the seller, the listing is known as

an exclusive listing.
a secret profit.
a net listing.
an overage.

Question 65 of 100

The type of loan where payments are not sufficient to pay off is due in a final single payment is known as a

reverse annuity mortgage.
wraparound mortgage.
variable mortgage.
term mortgage.

Question 66 of 100

The statutory period of continuous possession for adverse possession purposes is

six mouths plus l day.
4 years.
7 years.
3 years.

Question 67 of 100

The statute of frauds concerns

fraud in general.
fraud under Chapter 475.
the enforceability of real estate contracts.
the validity of FREC rules.

Question 68 of 100

An option contract is described by some authorities as unilateral because it

binds only the optionor.
binds only the optioned.
is not a valid contract.
lowers the price of the land.

Question 69 of 100

A meeting of the minds refers to

offer and consideration.
offer and acceptance.
signed and witnessed.
witnessed and notarized.

Question 70 of 100

Which is NOT correct?

A contract that calls for the transfer of real property has 5 essential elements, other contracts have only four essential elements.
A violation of the statute of frauds is not a violation by a licensee of Chapter 475.
A contract could be expressed and executory, but not executory and executed.
If an offer meets all terms and conditions of a listing, the seller must sell.

Question 71 of 100

Albert agrees to sell, and Bill agrees to buy his property, but does not give a deposit. Which is NOT correct?

The promises to buy and sell are adequate consideration.
This is not binding as there is no consideration.
This agreement must be in writing to be enforceable.
The parties are both bound.

Question 72 of 100

A real estate option contract must

be written.
have valuable consideration.
contain specified terms.
all of the above.

Question 73 of 100

Parol contracts are

written.
oral only.
partially oral and written.
executory.

Question 74 of 100

An option contract that has expired can be exercised

for 10 days.
at any time.
for a reasonable period of time.
not at all.

Question 75 of 100

How many acres are in the NW 1/4 of the SW 1/4 of the NW 1/4 of the NE 1/4 and the S 1/2 of the N 1/2 of the SW 1/4?

2 1/2
10
64
42 1/2

Question 76 of 100

Title is

the evidence of right which a person has to the possession of property.
a legal instrument which transfers an estate of freehold from one party to another.
any instrument which creates or declares legal rights.
a piece of paper.

Question 77 of 100

A listing agreement requires the broker to “effect a sale”. When is the commission due?

When the buyer signs the contract.
When the seller signs the contract.
When both parties have agreed to the transaction and signed the contract.
When the transaction is closed.

Question 78 of 100

Equity of redemption allows

a specified allowable time before the loan can be accelerated.
a specified allowable time before foreclosure proceedings can be initiated.
a time until default.
a time until the loan can be paid off before the property is foreclosed.

Question 79 of 100

The call is “North 90 degrees east”. This line would run

north and south.
north by northeast.
north by east.
east and west.

Question 80 of 100

The substitution of one debtor for another debtor is called

novation.
subordination.
defeasance.
equity of redemption.

Question 81 of 100

A purchase money mortgage is a loan by the

bank.
buyer.
junior lien holder.
seller.

Question 82 of 100

Mrs. Smith sold her house to Mr. Jones “subject to” the existing mortgage. Several years later Mr. Jones is unable to make his mortgage payments due to unemployment. Which of the following is correct?

Mrs. Smith has no liability on the mortgage loan.
Mrs. Smith can sue Mr. Jones if he defaults on the mortgage.
Mrs. Smith is liable if Mr. Jones defaults and a deficiency exists after the foreclosure.
Mr. Jones is liable for any deficiency that may exist after foreclosure of the mortgage.

Question 83 of 100

When evaluating the borrower’s attitude and willingness to pay a debt, the lender considers the borrower’s

credit rating.
assets.
income.
all of the above

Question 84 of 100

A contract for sale using a street address for the property description is

not valid under the Statute of Frauds.
valid, but only if the contract is witnessed and notarized.
a violation of Chapter 475, F.S.
valid, but may result in disputes as to precise boundaries of the subject property.

Question 85 of 100

A mortgaged property is sold, and the buyer assumes and agrees to pay the mortgage debt. This is not a novation. Which is correct?

The lender can recover any deficiency from both the buyer and the seller.
The buyer is the only one liable under the mortgage.
The seller is the only one liable under the mortgage.
Neither party is liable under the mortgage.

Question 86 of 100

The term “subject to the mortgage” written in a deed accomplishes the following

it acknowledges the debt.
it does NOT relieve the buyer of liability.
it relieves the seller of liability.
the buyer must pay intangible taxes on the mortgage.

Question 87 of 100

A contract is

a form denoting written instruments and acknowledgments.
an offer and acceptance.
an agreement to find a purchaser for a particular property.
a meeting of the minds creating enforceable rights.

Question 88 of 100

Which is a correct statement?

The statute of limitations on a parol contract is 5 years.
If a listing or a sale does not close, the broker is entitled to a commission.
A binder deposit is not an essential element of a real estate contract.
Revocation is a mutual agreement to cancel the contract.

Question 89 of 100

Which is correct about a listing?

A listing may be self-renewing.
A listing need not have an expiration date.
The law requires that it be an exclusive right of sale listing.
The seller must receive a copy of the agreement within 24 hours.

Question 90 of 100

The legal description Lot 5, Block A, Wildflower Subdivision is description by

monuments method.
metes and bounds method.
government survey method.
lot and block method.

Question 91 of 100

Which would not be considered as income in a mortgage loan application?

a gift.
salary.
dividends.
interest.

Question 92 of 100

Construction loan proceeds are disbursed

at the beginning of the project.
in drafts during the project as needed by the builder.
in draws after specified stages of construction have been completed.
only after the project is complete.

Question 93 of 100

Which is a parol contract?

Under seal
Verbal
Notarized
Written

Question 94 of 100

A mortgage that covers more than one parcel of property is a

package mortgage.
participation mortgage.
blanket mortgage.
wraparound mortgage.

Question 95 of 100

An African-American couple expresses interest in a house located in a predominantly African-American area of the city. The sales associate may legally conclude that they

like the style of the house.
want to live in a predominantly African-American neighborhood.
don’t want to live in a predominantly white neighborhood.
would be happier working with an African-American sales associate.

Question 96 of 100

Janice is a broker and has lunch with her friend, Bertha. While at lunch, Janice introduces Bertha to Karen, another friend. Bertha tells Karen she wants to buy a house, and Karen says hers is for sale. Bertha buys Karen's house. Janice wants a commission. Which is correct?

Janice gets a commission because she was responsible for the meeting.
Janice gets nothing since she had no listing.
Janice gets a commission since the listing is implied.
Janice gets nothing since all listings must be expressed.

Question 97 of 100

The broker’s commission is best protected when the broker takes

a net listing.
an exclusive agency listing.
an exclusive right of sale listing.
an open listing.

Question 98 of 100

Which states the interest rate, loan amount, and payment schedule?

the note
the mortgage
the assignment
the deed

Question 99 of 100

The clause in a mortgage that requires the principal balance of the loan to be paid upon the sale of the property, preventing a buyer’s assumption, is known as a

satisfaction clause.
due on sale clause.
prepayment clause.
repayment clause.

Question 100 of 100

Which is correct concerning Federal Housing Administration loans?

FHA guarantees the loan.
FHA interest rates are fixed by the mortgagor.
There is no limit on the loan amount.
There is a limit on the loan amount.

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