COMPASS 63 HOUR FINAL EXAM

Which of the following duties is owed by a transaction broker?

Full disclosure
Obedience
Undivided loyalty
Presenting all offers

One of the conditions an adverse possessor must meet in order to obtain legal title to a property is

openly possessing and claiming the property without the owner's consent.
occupying the property without an occupancy permit.
using the property intermittently and without permission over a period of years.
building a permanent structure on the property.

In Florida, unpaid property taxes become delinquent

January 1.
March 1.
April 1.
June 1.

A VA certificate of eligibility determines

whether an individual is a veteran.
the maximum loan amount an approved lender can give to veterans.
how much of a loan the VA will guarantee.
whether a lender is approved to issue VA-guaranteed loans.

A house sold for $350,000. The seller paid a brokerage commission of six percent, legal fees of $600, and had other closing costs of $3,000. What are the net proceeds from the sale?

$343,000.
$329,000.
$346,400.
$325,400.

Under federal fair housing laws, the owner of a ten-unit apartment building may legally

advertise that the property is not available to anyone requiring wheelchair access.
refuse to rent to aliens.
require families without children to pay the same security deposit that families with children must pay.
require tenants to move out when they become 62 years old.

Which of the following is an example of blockbusting?

An agent shows a minority home buyer properties located in a neighborhood where there are no other minority home owners.
An agent persuades a minority home buyer to avoid looking in a neighborhood where there are no minority home owners.
An agent persuades a family to put their house on the market because ethnic minority families are beginning to move into the neighborhood.
An agent persuades a minority home buyer to buy a property located in an area where most of the home owners belong to minority groups.

Mortgage financing is the practice of

buying and selling mortgages as an investment vehicle.
lending money to real estate investors to finance the purchase of mortgages.
using borrowed funds secured by a mortgage or trust deed to purchase real estate.
obtaining equitable title to real estate by buying promissory notes.

In what kind of easement is there a dominant tenement and a servient tenement?

An easement in gross.
A commercial easement.
A personal easement.
An easement appurtenant.

According to federal banking law, which of the following is a “federally related transaction” requiring a certified appraiser to perform the appraisal?

A real estate financial transaction which is regulated by a federal financial institution regulatory agency
An appraisal being performed on property belonging to the federal government
A real estate transaction for the U.S. government being handled by a licensed real estate broker
A real estate financial transaction that does not require a certified appraiser to perform the appraisal

A legal description of a property is one which

accurately locates and identifies the boundaries of the property and distinguishes it from all other properties.
accurately identifies the boundaries of the property and describes the location and dimensions of any improvements on the property.
is accepted by a licensed surveyor as suitable for inclusion in a survey of the property.
written by an attorney licensed to practice real estate law in the state in which the property is located.

Sales associate Tracy accepted an earnest money check on Wednesday, December 24th. Tracey must turn the check over to her broker by end of business on

the end of the same day the funds were received excluding weekends.
the end of the same day the funds were received including weekends.
the end of the next business day excluding weekends.
the end of the fifth business day following receipt of the funds.

Under the Equal Credit Opportunity Act, a lender, or a real estate agent who assists a seller in qualifying a potential buyer, may not

tell a rejected loan applicant the reasons for the rejection.
ask the buyer/borrower about his/her religion or national origin.
ask the buyer/borrower to explain gaps in his/her employment history.
use a credit report if the loan applicant disputes any information in the report.

Which of the following is included in surface rights?

Air rights.
Subsurface rights.
Water rights.
Mineral rights.

If a borrower obtains an interest-only loan of $75,000 at an annual interest rate of 8%, what is the monthly interest payment?

$720.
$625.
$42.
$500.

In what kind of estate does ownership revert to the grantor of the estate if usage fails to conform to a stated condition in the grant?

Fee simple absolute.
Life estate with reversion.
Life estate with condition subsequent.
Fee simple defeasible.

All broker licensees are required to complete ________ of post-license education.

30 hours
two 20-hour courses
60 hours
45 hours

A contract that conveys an interest in real estate must

contain a legal description of the property.
be written on a form approved by the state bar association..
be either nuncupative or holographic.
be recorded within three days to be enforceable.

Sales involving a(n) _______________ require a disclosure statement to the buyer that the buyer should not execute the contract until he or she has read the disclosure summary.

CDD
HOA
Condominium
Timeshare

What is a loan-to-value ratio?

The percentage of a lender's portfolio that is composed of mortgage loans.
The ratio of borrowed principal plus total interest to the appraised value of the collateral property.
The ratio of a lender's return on a mortgage loan to the value of the collateral property.
The fraction of the appraised value of the property offered as collateral which the lender is willing to lend.

Which of the following is not required for a real estate office in Florida?

Registration with the Florida Department of State
At least one enclosed room
Signage at entrance
Compliance with laws regarding accessibility for the disabled

If a complainant withdraws a filed complaint, which of the following actions may happen?

The FREC may investigate the complaint anyway.
The DBPR may investigate the complaint anyway.
The complaint is automatically dismissed and closed.
The complainant may be fined for filing and then withdrawing the complaint.

In which relationship is a licensee prohibited from assisting both the buyer and the seller in the same transaction?

Single agent
Transaction broker
Nonrepresentation
Dual agency

All nonresidents applying for a license in Florida

must be from a state that has a mutual recognition agreement with Florida.
are exempt from completing prelicense education in Florida.
must be licensed in their resident state.
must pass the Florida state licensure exam.

A court might grant an easement by prescription if

a municipality needs to dig a trench across an owner's property to install a sewer line to a neighboring property, and the owner refuses permission.
a property owner sells the front half of a lot and wants to continue using the driveway to reach the rear of the lot.
an intruder has been using an owner's property for three years with the owner's knowledge but without permission.
a property owner wants to prevent the owner of an adjoining property from building a second-story addition that blocks the sunlight to his rose garden.

The act that required federally-related appraisals to be conducted by a certified appraiser is known as

the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
the Uniform Standards of Professional Appraisal Practice Act (USPAPA).
the Appraisal Foundation Authorization and Reform Act (AFAR).
the Federal Institution for Regulation and Enforcement of Appraisal Act (FIREAA).

What is the difference between a variance and a nonconforming use?

A variance, once granted, is unconditional and permanent.
A variance is granted by the zoning board if the owner has a justifiable reason.
A nonconforming use is allowed if the owner requests it in advance of building.
A nonconforming use violates current zoning, but a variance does not.

Which of the following is prohibited?

A brokerage setting a standard commission rate for all transactions handled by that brokerage
A sales associate suing the employing broker for nonpayment of commission
A broker paying an unlicensed person to perform maintenance work on rental properties
Sharing a commission with a party to the transaction without disclosure to all involved parties

If a corporation fails to meet its financial obligations on one of its condominium building, creditors and mortgagees may foreclose on _______.

the entire property.
the individual units in question.
the particular floor of the unit in question.
nothing

How long is an initial application for licensure valid?

60 days from the date it was received by the DBPR
90 days from the date it was received by the DBPR
1 year from the date it was received by the DBPR
2 years from the date it was received by the DBPR

Among a landlord’s primary obligations in a lease is

insuring the tenant against loss of personal property.
providing required building support and services.
guaranteeing that a fair rent is being charged.
insuring the property for the value of the leasehold.

The agency relationship is defined by

the Realtor® Code of Ethics.
the laws of agency.
the law of real estate contracts.
the agreement between a principal and an agent.

What is the function of a note in a mortgage or trust deed financing arrangement?

It is evidence of the lender's interest in the collateral property.
It is evidence of ownership of the mortgage or trust deed.
It contains the borrower's promise to maintain the value of the property given as collateral for a loan.
It is evidence of the borrower's debt to the lender.

Which of the following is true of a contract for deed transaction?

At the end of the contract period, the vendee receives equitable title, provided all required periodic payments have been made.
The vendee has no right to possess or occupy the property during the contract period.
At the end of the contract period, the vendor conveys legal title, provided the vendee has fulfilled all obligations.
The vendor may cancel the contract at any time before the final payment has been received.

If a joint tenant sells his or her interest to an outside party,

the new owner becomes a joint tenant.
the new owner is a tenant in common.
the joint tenancy terminates and all owners become tenants in common.
the joint tenancy terminates and the owners must create a new joint tenancy to include the new owner.

How much documentary stamp tax will be owed on the note when an individual finances the purchase of a $400,000 single-family home in Miami with a cash down payment of $20,000?

$8,000
760
$1,330
$2,400

The agent and principal may terminate the agency relationship by mutual consent

at any time.
at any time until the agent has begun to perform the obligations of the agreement.
only if the written agreement provides for cancellation.
only if the principal and agent have a contract.

What is the purpose of the Florida Community Planning Act?

To promote the beneficial impact that strong urban centers have on local and state economies
To ensure that public services, such as water and transportation, are in place prior to capital improvements
To prevent sprawl and congestion
To have local governments concentrate on community land use and growth while state government focused on state resources and facilities.

Which of the following is true of an amortizing loan?

The amount of annual interest paid is the same for every year of the loan term.
Part of each periodic payment is applied to repayment of the loan balance in advance and part is applied to payment of interest in arrears.
Except for any points that may be paid, the interest on the loan balance is usually paid in advance.
The interest rate is reduced each year to maintain equal payments even though the outstanding loan balance is smaller.

If a lender discovers that an applicant for a mortgage loan has borrowed the down payment from a relative and has to repay that loan, the lender is likely to

refuse the application.
adjust the applicant's debt ratio calculation and lower the loan amount.
increase the loan amount to enable the borrower to pay off the loan to the relative.
require the borrower to make payments to an escrow account for repayment of the relative's loan.

FREC members serve __________ terms.

2-year
4-year
6-year
8-year

A sign at the entrance to a brokerage office

must include the names of all sales and broker associates working from that office.
must include all names of teams practicing in that office.
does not need to include the broker’s trade name.
must be easily seen and read by anyone entering the office.

The best comparable property for use in the sales comparison approach is the one that

is located closest to the subject property.
requires the fewest and smallest adjustments.
sold most recently.
was built according to the same plan as the subject and at about the same time.

What is the relationship between master planning and zoning ordinances?

The compilation of zoning ordinances is the master plan.
A master plan eliminates the need for zoning ordinances.
Master planning is a state-level function; zoning is limited to the county level.
Zoning ordinances are a primary means of keeping land use in line with the master plan.

Which of the following items are paid in arrears?

Taxes and insurance
Rents and interest
Taxes and interest
Rents and insurance

If a licensee changes his residential address, what must he do?

Notify his broker of the change
Notify the DBPR within 10 days
Notify the FREC within 30 days of the change
No action is required.

Escrow account records must be kept for

no more than 3 years.
at least 2 years.
at least 5 years.
7 years.

A tenant in common can

sell, encumber or transfer his or her interest to an outside party without the consent of the other tenants in common.
use his or her interest in the estate to encumber the entire estate.
sell, encumber or transfer his or her interest only to the other tenants in common.
sell, encumber or transfer his or her interest only with the consent of all the other tenants in common.

The borrower in a mortgage loan transaction is known as the

mortgagee.
mortgagor.
lienor.
trustee.

What kind of interest does the buyer own after a real estate sale contract is signed by the principal parties?

Legal title.
Lienholder interest.
Remainder interest.
Equitable title.

Which of the following situations illustrates the principle of contribution?

A homebuyer makes a down payment of 20% instead of the 10% the lender requires.
A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.
The appraised value of a house goes up by $20,000 over a two-year period because of the prices recently paid for other houses in the neighborhood.
Because of a decline in mortgage interest rates, a homeowner in a certain market is able to list her house at a higher price.

If a tenant occupies a leased property without the consent of the landlord after a lease expires, the type of estate that results is called

an estate at sufferance.
a holdover estate.
an adverse leasehold.
a hostile leasehold.

During the period between the signing of the sale contract and the closing date,

the seller may continue to accept offers on the property.
the seller may not occupy or use the property.
buyer and seller are expected to remove any contingencies that are stated in the contract.
buyer and seller continue to negotiate the selling price if either party is dissatisfied.

A property buyer gave sales associate Tracy an earnest money check on Tuesday, December 23rd. The check must be deposited into the broker’s escrow account by the end of business on

Friday, December 26.
Wednesday, December 24.
Monday, December 29.
Tuesday, December 30.

The fair housing law that first protected people against discrimination in housing based on race was the

Civil Rights Act of 1866.
Civil Rights Act of 1968.
Executive Order 11063 of 1962.
Title VIII amendment to the Fair Housing Act.

When a joint tenant dies, what happens to the tenant’s interest in the estate?

It passes to the decedent's heirs, who become joint tenants.
It passes as a tenancy in common to the decedent's heirs.
The joint tenancy terminates and becomes a tenancy in common with the decedent's heirs and the surviving tenants as co-owners.
It passes to the surviving joint tenants.

Which of the following statements is true in regard to Florida’s Save Our Homes (SOH) amendment?

The SOH amendment provides a $25,000 tax exemption for homes valued over $35,000.
The SOH amendment allows homeowners to transfer a $500,000 savings benefit to a new homestead property.
The SOH amendment savings benefit is capped at $250,000.
The SOH amendment provides a 25% assessment cap to non-homestead properties.

If an applicant for a broker license has been licensed as a Florida sales associate during the preceding 5 years,

the applicant must complete the sales associate post-license course prior to applying for the broker license.
the applicant is not required to complete the broker prelicense education.
the applicant is not required to take the state license exam.
the applicant’s broker license fee is waived.

Blind advertising occurs when

the entrance sign is located on the interior entrance to the brokerage office.
the brokerage address is not included in an advertisement.
the broker’s licensed name is not included in an advertisement.
the broker’s nickname is not included on a yard sign.

The Federal Reserve’s Regulation Z applies to which loans?

All loans.
All loans secured by real estate.
All loans secured by a residence.
All loans over $25,000.

When a sales associate license is first issued, it is on inactive status. How does the sales associate activate the license?

Complete post-education education
Register under an employing broker
Select the active status when renewing the license
Licenses are issued on active status.

Which of the following statements properly describes the central concept of the sales comparison approach?

Find the median price of recently sold comparable properties and add or subtract dollar amounts in the subject property to account for competitive differences.
Make dollar adjustments to the sale prices of comparable properties to account for competitive differences with the subject.
Find at least three comparable properties that are currently for sale and make dollar adjustments to the listing prices to account for competitive differences with the subject.
Apply an appreciation factor to the price at which the subject property most recently sold and make dollar adjustments to account for competitive differences with comparable properties currently for sale.

If demand is increasing, what would be the likely effect on real estate prices in an area where the municipality has declared a moratorium on new construction?

Prices would level off.
Prices would continue to follow the trend that preceded the moratorium.
Prices would fall.
Prices would rise.

By definition, personal property

includes real property.
is any property that is not real property.
is any property owned by an individual.
is real property that is not attached to real estate.

The practice of redlining is specifically prohibited by

The Home Mortgage Disclosure Act.
The Real Estate Settlement Procedures Act.
The Civil Rights Act of 1866.
The Americans with Disabilities Act.

When are the special fees for funding the Recovery Fund suspended?

When the balance of the Fund reaches $150,000.
When the balance of the Fund reaches $500,000
When the balance of the Fund reaches $1 million
Never

Which of the following statements properly describes the methodology of the cost approach to appraisal?

Apply a depreciation factor to the reported actual cost of acquiring and improving the subject property.
Estimate the cost of building the improvements on the subject property.
Estimate the land value and add to this the actual cost of the improvements adjusted for competitive differences with similar properties.
Add the estimated land value and cost of improvements and subtract the accrued depreciation of the improvements.

If escrow funds are placed in an interest-bearing account, to whom must the interest be disbursed?

The seller
The buyer
The holder of the account
To whomever all parties agree on

An implied contract may be deemed to exist if

the parties do not disavow an express contract that has expired.
the parties act is if there is a contract.
an offering party does not receive written notice that the offer has been rejected.
the parties promise to perform their part of the agreement if the other party.

A licensee may complete a 28-hour education course to reactivate a license that has been on involuntary inactive status for

less than 1 year.
1 to 2 years.
more than 2 years.
up to 5 years.

The real estate industry is regulated by federal, state and local laws, as well as by

its own professional codes of ethics.
the local Chamber of Commerce.
the Consumer Protection Agency.
the Better Business Bureau.

When the Probable Cause Panel finds there is no probable cause, what happens next?

The Panel issues a notice of noncompliance.
The DBPR overrides the Panel’s finding and further investigates the complaint.
The Panel may issue a letter of guidance.
The secretary of the DBPR may issue a summary suspension.

Which of these statements is true regarding opinions of title?

Real estate licensees are qualified to offer an opinion of title.
Licensees may include an attorney’s opinion of title in providing information to a buyer.
Licensees may offer their own opinion of title subject to having consulted with their attorney.
Licensees are prohibited from advising buyers to consult with an attorney to obtain an opinion of title.

If there are conflicting demands for escrow funds, this has to be reported to FREC within _____.

7 business days.
15 calendar days.
7 calendar days.
15 business days.

Among the duties of a broker who is acting as a transaction broker, is Copy

preserving the confidentiality of information received from either party by not telling the other party.
helping the two parties to arrive at a deal that is closest to achieving the objectives of each party.
disclosing material facts that affect the value of the property to both parties.
choosing to obey the instructions of one party and informing the other party of the decision.

A lien is a

debt incurred by a property owner.
promissory note granted by a property owner as security for a debt.
creditor's claim against property as security for a debt of the property owner.
document that creates an easement.

The valuable consideration necessary to make a contract valid must be

money.
something tangible.
something specifically offered in exchange for something else.
something of equal value with whatever is received in exchange.

Which item would be included in the Florida Transfer Disclosure Statement?

Property taxes
Potential federal construction limitations
Buyer’s right to review proof of seller’s legal ownership
Possible easements

Which statement is true regarding Florida brokerage relationships?

A buyer or seller must enter into a brokerage relationship with a licensee.
A licensee owes the same duties to the buyer or seller in every type of brokerage relationship.
A licensee owes limited duties to the buyer or seller in a nonrepresentation relationship.
A licensee owes a buyer or seller confidentiality in a nonrepresentation relationship.

If there is a conflict over escrow fund disbursement, what is the first step the broker should take?

Initiate mediation
Notify the FREC
Notify the title company
Initiate litigation with an interpleader action

A loan applicant has an annual gross income of $36,000. How much will a lender allow the applicant to pay for monthly housing expense to qualify for a loan if the lender uses an income ratio of 28%?

$2,160
$840
$1,008
$720

Title can be voluntarily transferred by

grant, deed, and will.
escheat, deed, and covenant.
title certificate, will, and deed.
sale contract, deed, and warrant of seizin.

Which of the following best describes actual notice?

It is notice published in a newspaper.
It is knowledge one could have or should have obtained.
It is notice explicitly stated in a legal document.
It is knowledge received or imparted through direct experience.

Which type of map includes the property owner’s name, mailing address, sales data, valuations, building information, and site address?

plot map.
plat map.
tax map.
survey map.

In assisting a buyer or seller to complete an offer to purchase, what should an agent do to reduce the risk of committing an unauthorized practice of law?

Use a standard contract promulgated by a state agency or a real estate board.
Charge no more than a nominal fee for the assistance.
Offer legal advice only on points of the contract that the agent is absolutely certain about.
Write contract terms that are manifestly fair to both buyer and seller.

An applicant must take and pass the state licensure exam within _____ of completing prelicense education.

90 days
1 year
2 years
30 days to 1 year

To avoid violating the Real Estate Settlement Procedures Act, parties who are providing services to the buyer or seller in a transaction must

be paid before the closing date for any service they provide.
inform the closing agent of the cost of their services at least one week before the closing date.
receive payment only from the funds held in escrow, not directly from buyer or seller.
disclose in writing any business relationships they have with other parties involved in the transaction.

Which of the following contracts can be assigned to another party?

An exclusive listing agreement.
An exclusive agency agreement.
A contract for the sale of a house.
An employment contract between a broker and a sales associate.

One of the agent’s fiduciary duties that continues even after a listing agreement expires is

obedience.
diligence.
confidentiality.
disclosure.

In Florida, rental security deposits are limited to

1 month’s rental amount.
the total of the first and last months’ rental amounts.
$1,000.
Florida law does not set a limit on security deposit amounts.

A unique characteristic of a special assessment tax is that

it only applies to properties which will benefit from the public improvement.
the equalization board discounts levies for properties not affected by the public improvement.
more valuable properties which stand to benefit will pay proportionately more taxes.
it creates an involuntary junior lien on the property.

Which of the following is true regarding the sales associate license requirements?

Applicants must complete 72 hours of prelicense education.
Applicants must pass the end-of-course exam with a score of 75%.
Applicants must print out their own certificate of course completion.
Applicants may complete the prelicense education course through distance learning.

A property is being appraised by the cost approach. The appraiser estimates that the land is worth $10,000 and the replacement cost of the improvements is $75,000. Total depreciation from all causes is $7,000. What is the indicated value of the property?

$68,000.
$92,000.
$82,000.
$78,000.

Which of the following items is paid in arrears?

Apartment rent.
A flood insurance premium.
A loan origination fee.
A real estate tax bill.

A sale transaction closes on April 1, the ninety-first day of the tax year. The day of closing belongs to the seller. Real estate taxes for the year, not yet billed, are expected to be $3,150. According to the 365-day method, what is the seller’s share of the tax bill?

$776.71.
$785.34.
$959.54
$2,364.66.

Tom obtained his sales associate license in April of 2016 and renewed that license on March 31, 2018. His next renewal date was scheduled for March 31, 2020. However, Tom obtained his broker license on July 8, 2019. When does this broker license need to be renewed?

by March 31, 2020
by March 31, 2021
by September 30, 2020
by September 30, 2021

A homeowner receives a tax bill that includes an amount for the library district, taxed at $1.00 per $1,000, and the fire protection district, taxed at $2.00 per $1,000. How much does the taxpayer have to pay for these two items if the property’s taxable value is $470,00?

$15,670.
1,570.
$14,100.
$1,410.

By definition, personal property

includes real property.
is any property that is not real property.
is any property owned by an individual.
is real property that is not attached to real estate.

A buyer’s broker owes the full set of fiduciary duties to

the buyer.
the seller.
the party who will pay the commission.
the seller's agent.

Among the duties of a broker who is acting as a transaction broker, is

preserving the confidentiality of information received from either party by not telling the other party
helping the two parties to arrive at a deal that is closest to achieving the objectives of each party.
disclosing material facts that affect the value of the property to both parties.
choosing to obey the instructions of one party and informing the other party of the decision.

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