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GOLD COAST 2023
PRACTICE EXAMS QUESTIONS AND ANSWERS
"Homeowners who file itemized tax returns are allowed deductions for which of the following items? A. Real estate taxes and repairs B. Hazard insurance and depreciation C. Real estate taxes and mortgage interest
D. Mortgage interest and utilities - Correct Answer C. Real estate taxes and mortgage interest"
"Fixed expenses typically include which of the following? A. Real estate taxes and hazard insurance B. Management fees and depreciation C. Utilities and repairs
D. Mortgage payments and income taxes - Correct Answer A. Real estate taxes and hazard insurance"
"What is the formula to determine the loan-to-value ratio? A. Loan multiplied by value B. Value divided by loan C. Loan divided by value
D. Loan subtracted from value - Correct Answer C. Loan divided by value"
"What is the rationale behind government planning of real estate development? A. To manage future real estate growth B. To encourage more landscaping C. To limit commercial areas
D. To maintain the character of the community - Correct Answer A. To manage future real estate
growth" "In Florida which entity is primarily responsible for establishing and implementing the roles, processes, and powers of comprehensive planning and future development? A. Florida's governor B. Local government and planning agencies C. Regional planning councils D. State comprehensive planning administrators under the Florida department of economic opportunity
- Correct Answer B. Local government and planning agencies" "Which statement best describes the master plan? A. It must be inflexible B. It is prepared by the state legislator C. It stops growth
D. It serves as a guide for an area's future growth - Correct Answer D. It serves as a guide for an area's
future growth" "A real estate licensee attempts to induce seller's to list and sell their properties by starting rumors that minorities are taking over the neighborhood. What could the licensee be charged with? A. Steering B. Blockbusting C. Redlining
D. Channeling - Correct Answer B. Blockbusting"
"The Fair Housing Act of 1968 prohibits discrimination based on which of the following? A. Age B. Marital status C. Occupation
D. National origin - Correct Answer D. National origin"
"Which of the following would a church need in order to build in a residential neighborhood? A. Public zoning permit B. Special exception C. Variance
D. Nonconforming use permit - Correct Answer B. Special exception"
"What is the purpose of the zoning board of adjustment? A. To settle monetary claims by property owners B. To grant variances and special exceptions C. To develop the comprehensive plan
D. To determine infrastructure requirements - Correct Answer B. To grant variances and special
exceptions" "Which term is used to describe a property use that predates the current zoning ordinance but is allowed to exist for at least a period of time? A. Legally conforming B. Progressive C. Legally nonconforming
D. Capitalized - Correct Answer C. Legally nonconforming"
"Which statement which best describes a Planned Unit Development (PUD)? A. A PUD offers fewer amenities than are possible with more traditional forms of zoning B. A PUD impacts the environment to a greater degree than most zoning classifications C. A PUD prohibits the use of zero lot line development
D. A PUD is also called cluster zoning - Correct Answer C. A PUD is also called cluster zoning"
"Which statement is correct with respect to a Development of Regional Impact (DRI)?
"To which organization is real estate tax most important? A. The federal government B. The state government C. The local government
D. Local nonprofit organizations - Correct Answer C. The local government"
"What does the county property appraiser determine? A. Tax rate B. Market value C. Assessed value
D. Just value - Correct Answer C. Assessed value"
"What discount percentage is given to property owners who pay their real estate tax bill in November? A. 1% B. 2% C. 3%
D. 4% - Correct Answer D. 4%"
"Which statement would be correct regarding a single homeowner who sold a principal residence and itemized deductions on his or her federal income tax return? A. Any capital gain realized from the sale is taxable at a reduced rate B. All capital gain would be subject to tax at the tax payer's marginal rate C. A loss of up to $3,000 on the sale may be deducted from adjusted income D. Up to $25,000 may be excluded from taxation if the taxpayer had occupied the residence for at least
two of the past five years - Correct Answer D. Up to $25,000 may be excluded from taxation if the
taxpayer had occupied the residence for at least two of the past five years" "Complete this statement. In Florida, the owner of a homestead property located in outside of the city limits is required to pay property taxes levied ___________________? A. On the total assessed value of the property B. By the nearest city C. By the county and school board
D. By the state of Florida - Correct Answer C. By the county and school board"
"Who can appraise property for purposes of taxation? A. The county property appraiser B. The local school board C. The city in which the property is located
D. Special taxing districts - Correct Answer A. The county property appraiser"
"How is 10 mills expressed as a decimal? A. 1. B..
C..
D. .001 - Correct Answer C. .010"
"Complete this statement. If a property owner fails to pay property taxes, the resulting lien is _________? A. Held by the county until the certificate is sold B. Owned by the county property appraiser C. Foreclosed on by the sheriff
D. Sold at public auction for the highest interest rate - Correct Answer A. Held by the county until the
certificate is sold" "According to Florida's Save amour Homes Act, the assessed value of homestead property cannot be increased in any one year by more than which of the following? A. The lesser of 3% or the CPI B. the greater of 3% or the CPI C. 10 mills
D. An amount determined by the county property appraiser - Correct Answer A. The lesser of 3% or
the CPI" "Which statement is correct with respect to homeowner insurance coverage? A. All losses are covered B. Flood losses are limited to $25, C. Personal property is not covered
D. Homeowners with multiple policies will not receive the full amount of their loss for each insurer -
Correct Answer D. Homeowners with multiple policies will not receive the full amount of their loss for
each insurer" "Which statement best describes the interest that is payable on tax certificates? A. It is based on the lowest bid received B. It is never lower than 18% C. It is negotiable between property owner and bidder
D. It is established by law - Correct Answer A. It is based on the lowest bid received"
"Why is the process of real estate investment analysis important to an investor? A. It helps an investor select properties that meet personal objectives B. It determines the amount of taxes due on income producing property C. It determines the exact cash flow from an investment property
D. It makes possible the best use for a property based on zoning - Correct Answer A. It helps an
investor select properties that meet personal objectives" "Which of the following statements regarding reserves for replacements is correct? A. They are a cash expense
D. It would rarely involve security transactions - Correct Answer C. It consists primarily of analyzing
financial statements" "Real estate ,ice sees who are engaged in business brokerage might need to have a securities license if the transaction involves which of the following? A. Negotiation of a new mortgage loan B. An analysis of financial statements C. Renegotiation of a. Existing lease
D. Transferring shares of stock or limited partnership interests - Correct Answer D. Transferring shares
of stock or limited partnership interests" "Under the Uniform Commercial Code, what is the document used to secure financing of personal property? A. Deed B. Bill of sale C. Security agreement
D. Trust agreement - Correct Answer C. Security agreement"
"All of the following are considered business assets, except: A. Goodwill B. Notes payable C. Accounts receivable
D. Furniture and equipment - Correct Answer B. Notes payable"
"Which document most closely resembles a deed? A. Bill of sale B. Security agreement C. Balance sheet
D. Operating statement - Correct Answer A. Bill of sale"
"Which of the following is not considered an operating expense for appraisal of income tax purpose? A. Fixed expenses B. Variable expenses C. Reserve for replacements
D. Annual debt service - Correct Answer D. Annual debt service"
"What type of value does an appraiser most commonly estimate? A. Book B. Market C. Insurable
D. Condemnation - Correct Answer B. Market"
"How is investment value best defined? A. The value to an individual
B. The highest price of a property would sell for in an open market C. The value based on the use of the property
D. The minimum value of a business opportunity - Correct Answer A. The value to an individual"
"Which of the following conditions is necessary for the sales price of a property to equal its market value? A. The parties cannot be acting in their own self-interest B. The property would have to be exposed to the market for an unreasonably short time C. There can be no existing lines against the title
D. The transaction must involve a willing and informed buyer and seller - Correct Answer D. The
transaction must involve a willing and informed buyer and seller" "What is market value? A. The amount a buyer is willing to pay B. The amount a seller is willing to accept C. The amount that should be paid
D. The amount that wS previously paid - Correct Answer C. The amount that should be paid"
"How is a gross rent multiplier calculated? A. Multiply comparable property sales price by comparable property rent B. Divide comparable property sales price by comparable property rent C. Multiply comparable property sales price by subject property rent
D. Divide comparable property sales price by subject property rent - Correct Answer B. Divide
comparable property sales price by comparable property rent" "Functional obsolescence includes which of the following? A. An over-improvement B. Broken windows C. A waste water treatment plant next to the subject property
D. A property located in the glide path to an aiport - Correct Answer A. An over-improvement"
"Which appraisal approach would be given greater weight when appraising am apartment complex? A. Cost-depreciation B. Income approach C. Sales comparison
D. Land residual - Correct Answer B. Income approach"
"Which appraisal approach is most suitable for estimating the value of a single-family property? A. Cost -depreciation B. Sales comparison C. Income approach
D. Land residual - Correct Answer B. Sales comparison"
"What is the basis for the principle of substitution?
"A new airport built in proximity to a residential neighborhood may cause properties to lose value due to which of the following? A. Physical deterioration B. External obsolescence C. Functional obsolescence
D. Proximity obsolescence - Correct Answer B. External obsolescence"
"In the income approach, a capitalization rate can be derived from which of the following? A. Tables published nationally by appraisal organization B. Rate schedules maintained by lending institutions C. The interest rate paid on Treasury Bills
D. The relationship between sales prices and the income of similar properties - Correct Answer D. The
relationship between sales prices and the income of similar properties" "When making adjustments based on the following information, what should be done with the $2,000? Comparable Sales Price = $40, Comparable Property = Two car garage Subject property = No garage Garage value = $2, A. It should be added to the price of the comparable property B. It should be added to the price of the subject property C. It should be subtracted from the price of the subject property
D. It should be subtracted from the price of the comparable property - Correct Answer D. It should be
subtracted from the price of the comparable property" "Which of the following best describes the free enterprise system? A. A market system B. A centralized system C. A socialist system
D. A communist system - Correct Answer A. A market system"
"All of the following statements apply to the real estate market, except: A. Situs value is value resulting from location B. Real estate is immobile C. Each parcel of real estate is unique
D. The real estate market is National in nature - Correct Answer D. The real estate market is National
in nature" "How does the real estate market react to shifts in consumer demand? A. Rapidly B. Slowly C. Not at all
D. Through changes in zoning laws - Correct Answer B. Slowly"
"Which of the following market factors will typically result in increased demand? A. A decrease in prices B. A decrease in income C. An increase in mortgage interest rates
D. A decrease in population - Correct Answer A. A decrease in prices"
"In the real estate market, what is a developer considered to be? A. A lender B. A competitor C. A consumer
D. A supplier - Correct Answer A. A supplier"
"The real estate market experiences changed and cycles. What is a term used to describe the phase of the market where there is not enough demand to meet the current over-supply of available housing units? A. An inflationary market B. A buyer's market C. A seller's market
D. An expanding market - Correct Answer B. A buyer's market"
"Two factors that affect a real estate market are supply and demand, which of the following would be a good indicator of the measur snow supply versus demand? A. The population of the community B. Consumer preferences, such as number of bedrooms and bathrooms C. The asking price of a recently listed home in the community
D. The vacancy rate within the community - Correct Answer D. The vacancy rate within the
community" "What is the correct order of the business cycle phases? A. Expansion, trough, peak, and contraction B. Peak, contraction, expansion, and trough C. Expansion, peak, contraction, and trough
D. Peak, trough, expansion, and contraction - Correct Answer C. Expansion, peak, contraction and
trough" "In which conditions does market equilibrium theoretically exist? A. When supply exceeds demand B. When demand e creeds supply C. When costs and prices stabilize
D. When supply and demand are in balance - Correct Answer D. When supply and demand are in
balance"
B. To determine the purchase price of the property C. To determine which party pays the brokerage commission
D. To report income to the IRS - Correct Answer A. To summarize the financial aspects of a real estate
transaction" "Which entry would normally appear as a de it on the buyer's statement? A. First mortgage balance being assumed B. Intangible tax on a new mortgage C. Documentary stamps on the deed
D. Impound account balance when a loan is being assumed - Correct Answer B. Intangible tax on a new
mortgage" "Which of the following statements best describes a single-entry item? A. It appears on both the buyer and the seller's statements B. It is not paid at closing C. It must be accounted for in the broker's statement
D. It is always a credit - Correct Answer C. It must be accounted for in the broker's statement"
"Which entry would appear as a credit on the seller's closing statement? A. Documentary stamp tax on the deed B. Recording the mortgage C. Purchase price
D. Abstract continuation - Correct Answer C. Purchase price"
"What document stipulates which party pays which expense in a closing? A. Listing agreement B. Purchase and sale contract C. Deed
D. Mortgage - Correct Answer B. Purchase and sale contract"
"How is an earnest money deposit held in escrow reflected on the closing statement? A. Credit to the buyer B. Credit to the buyer C. Credit to both the buyer and the seller
D. Credit to the seller - Correct Answer A. Credit to the buyer"
"In the absence of any agreement between the parties, who pays for the state documentary stamp tax on the deed? A. The attorney B. The broker C. The seller
D. The buyer - Correct Answer C. The seller"
"I'm a residential transaction , how is the brokerage fee reflected on the closing statement?
A. It must be accounted for in the broker's statement B. It does not appear in the broker's statement C. It is entered on the broker's statement as a credit
D. It is entered on the broker's statement as a debit - Correct Answer B. It does not appear in the
broker's statement" "How is the amount of a new mortgage obtained by the buyer entered on the closing statement? A. Debit to the buyer B. Credit to the seller C. Credit to the buyer
D. Debit to the seller - Correct Answer C. Credit to the buyer"
"How is the amount of a mortgage loans assumed at closing by the buyer entered on the closing statement? A. Double entry B. Single entry C. Credit to the seller
D. Debit to the buyer - Correct Answer A. Double entry"
"Who is paid the balance due from the buyer that is shown on the closing statement? A. The seller B. The mortgagee C. The broker
D. The closing agent - Correct Answer D. The closing agent"
"How are expenses that are paid to a third party entered on a closing statement? A. Double entries B. Credits C. Debits
D. Prorations - Correct Answer C. Debits"
"Complete the statement. When determining probations on a closing, the day of the closing ________. A. Belongs to the closing agent B. Is determined by the agreement C. Is the responsibility of the seller
D. Is charged to the buyer - Correct Answer B. Is determined by the agreement"
"Which statement about the broker's portion of the closing statement is true? A. All double entry items must appear there B. Total receipt, minus the binder deposit equal the grand total C. Receipts send disbursements must equal
D. Total expenses, less the brokerage fee, equal the grand total - Correct Answer C. Receipts and
disbursements must equal"
B. Warehousing C. Indexing
D. Predatory lending - Correct Answer A. Negative amortization"
"When does disintermediation occur? A. When deposits exceed the demand for loans B. When depositors withdraw their savings from depository institutions to invest in higher yield alternatives investments C. When the IRS taxes earnings of investments
D. When the federal reserve board reduces the discount rate - Correct Answer B. When depositors
withdraw their savings from depository institutions to invest in higher yield alternatives investments" "Which clauses in a blanket mortgage allows for the release of a single parcel upon payment of a specified sum? A. Defeasance B. Acceleration C. Satisfaction
D. Release - Correct Answer D. Release"
"Which of the following statements regarding types of mortgages loans is correct? A. Both the FHA and the VA make loans B. FHA loans are guaranteed C. The FHA insures loans. VA loans are guaranteed
D. Conventional loans are insured by the govefnment - Correct Answer C. The FHA insures loans. VA
loans are guaranteed" "Interest rates for Federal Housing Administration mortgages are determined by which of the following? A. The market B. FHA C. The government
D. Congress - Correct Answer A. The market"
"The Federal National Mortgage Association was originally formed to purchase what type of loans? A. Conventional B. FHA C. VA
D. Deeds of trust - Correct Answer B. FHA"
"Gerri has a 15 year loan with monthly payments that remain the same amount for the entire loan period. Which type of mortgage repayment plan does Gerri have? A. Adjustable rate B. Indexed C. Partially amortized
D. Level payment - Correct Answer C. Partially amortized"
"If a mortgage payment consists of interest only, what is the final payment (which includes the full amount borrowed) called? A. Monthly payment B. Balloon payment C. Amortized payment
D. Term payment - Correct Answer C. Amortized payment"
"Lenders who make conventional loans where the buyer provides less than 20% down payment will normally require that the borrower pay which of the following? A. Up-Front mortgage insurance premium UFMIP payments B. Uninsured Primary Mortgage Insurance UPMI C. Mortgage insurance premiums MIP payments
D. Private mortgage insurance PMI - Correct Answer D. Private Mortgage Insurance PMI"
"Which legal instrument evidences the debt and states the interest rate, term, payment requirement, and other information related to the loan? A. Promissory note B. Contract C. Lien
D. Mortgage - Correct Answer A. Promissory note"
"What is the function of a mortgage? A. It conveys title to real property B. It secures repayment of the debt C. It creates a personal pledge to repay a loan
D. It creates a lien on the mortgagee's property - Correct Answer. It secures repay,ent of a debt"
"When financing the purchase of real estate, what is the role of the mortgages? A. A mortgagor gives a mortgage to a mortgagee B. A mortgagor takes a Mortgage from a mortgagee C. A mortgagor gives a mortgage to a borrower
D. A mortgagor takes a mortgage from a lender - Correct Answer A. A mortgagor gives a mortgage to a
mortgagee" "Which clause in a mortgage requires the lender to acknowledge performance by the borrower? A. Estoppel B. Acceleration C. Defeasance
D. Release - Correct Answer C. Defeasance"
"In order to qualify for an FHA 203b insured mortgage loan, an applicant's housing expense ratio cannot exceed what percentage? A. 25%
B. Brokering C. Qualifying
D. Leveraging - Correct Answer C. Qualifying"
"A borrower is consistently late on their mortgage payments, so the bank exercises its ability to raise the interest rate. Which clause in the mortgage document allows the lender to do this? A. Default rate mortgage clause B. Escalation clause C. Late payment clause
D. Due on sale clause - Correct Answer B. Escalation clause"
"How was title taken if a seller remained solely liable for the balance of a mortgage loan subsequent to transfer of ownership? A. Novation B. Assumption C. Subject to
D. Agreement for deed - Correct Answer C. Subject to"
"After all lines have been paid following a foreclosure sale, to who, do any remaining funds belong to? A. The sheriff of the county in which the property is located B. The clerk of the circuit court C. The mortgagor
D. The mortgagee - Correct Answer C. The mortgagor"
"Which mortgage clause is the borrower's promise to pay the property taxes during the period of the loan? A. Maintenance B. Defeasance C. Receivership
D. Tax - Correct Answer D. Tax"
"Which of the following is an example of a unilateral contract? A. Purchase and sale contract B. Contract for deed C. Open listing contract
D. Oral contract - Correct Answer C. Open listing contract"
"In which circumstance is a broker's commission subject to forfeiture? A. The broker had an oral listing contract B. The broker fails to obtain witnesses to a real estate sales contract C. The broker performs according to the employment contract
D. The broker violates a fiduciary duty - Correct Answer D. The broker violates a fiduciary duty"
"If an owner revokes an exclusive right of sale listing and sells the property during the remaining time the listing would have been in effect, what is the broker entitled to? A. A full commission B. Bring a suit for damages C. Write off the loss on their income taxes
D. Revoke the listing contract - Correct Answer A. A full commission"
"Which term refers to a type of contract where all terms and conditions are NOT fully expressed? A. Implied B. Bilateral C. Patrol
D. Executory - Correct Answer A. Implied"
"What are the required elements of all valid contracts? A. Lawful subject, competent parties, legal age and offer B. Offer, acceptance, legal age, and lawful subject C. Lawful subject, agreement, consideration, and two or more competent parties
D. Meeting of the minds, legal age, offer, and competent parties - Correct Answer C. Lawful subject,
agreement, consideration, and two or more competent parties" "To which of the following does the phrase "meeting of the minds" refer? A. Offer and acceptance B. Consideration C. Lawful subject
D. Two or more parties - Correct Answer A. Offer and acceptance"
"Which of the following best describes a contract? A. A written instrument B. Legally binding C. Void unless accompanied by earnest money
D. Always bilateral - Correct Answer B. Legally binding"
"What is the term used to describe the party who receives an offer? A. Offeree B. Offeror C. Optionor
D. Optionee - Correct Answer A. Offeree"
"Which of the following terms best describes a contract in which all of the terms and conditions have been fully performed? A. Executory B. Bilateral C. Unilateral
D. Executed - Correct Answer D. Executed"
