Free Florida Real Estate Practice Exam Questions (September 2024) 100+

A licensee may choose to become voluntarily inactive and remain so indefinitely, as long as the person renews as inactive every two years and satisfies the continuing education requirements prescribed by the Florida Real Estate Commission (FREC).

If an applicant for a real estate license provides false information on their application, they commit which of the following criminal violations? Giving false information when applying for or renewing a license is a felony of the third degree, punishable by a criminal court.

The correct statement is: “In title theory states, banks or mortgage lenders hold the title of a property until it is paid in full. In lien theory states, however, banks or mortgage lenders never retain title to the property.” In lien theory states banks or mortgage lenders never retain title to the property. Instead, the mortgage lender holds a lien against the property.

The Fair Housing Act is a law that prohibits discrimination in the buying, selling, renting or financing of housing. These laws prohibit discrimination based on race, religion, color, sex, disability, children, nationality and more. Changing terms of a sale because someone is Chinese is clearly illegal and a violation of The Fair Housing Act.

Eminent Domain is a term used to describe the right of the government to takeover privately owned real estate usually despite the owners’ wishes. This often happens for land that is required for infrastructure like highways, major pipelines, railroads etc. The fifth and fourteenth amendments of the U.S. Constitution permit the government to exercise its power of eminent domain. Read More Here

A real estate agent is a professional who has passed the required real estate classes and licensing exams in the state where he/she intends to work. This is the starting point for most real estate professionals agents. Agents are also legally called a licensee or license holder.

An offer from a third party does not affect someone else's offer. A counteroffer by that offeree would affect an offer, however, as well as a cancellation or death of the offeror before the offer is accepted.

An individual seeking to be excused from the requirements of a zoning ordinance needs a variance. Or a conditional use permit. A conditional use permit is a zoning exception that allows you to use your property in non-conforming ways. A variance is a request to deviate from current zoning requirements.

A mortgagee is an entity that lends the mortgagor money. This entity is typically referred to as the lender.

The habendum clause is the statement in a contract that describes the rights and interests being given. It almost always begins with the words "to have and to hold."

A property owner or homeowner can sue to obtain the required just compensation through the process of inverse condemnation. Inverse condemnation is the event in which the government takes private property but fails to pay compensation or just compensation. Read More Here

Users, owners, renters, developers, renovators, and facilitators are the main participants in real estate markets.

Frontage is the boundary between a plot of land or a building and the road onto which the plot or building fronts. Frontage may also refer to the full length of this boundary. This length is considered especially important for certain types of commercial and retail real estate, in applying zoning bylaws and property tax.

After smoking, this is the second leading cause of lung cancer in the United States. Radon is a naturally occurring gas that forms in rocks, soil, and water.

A landowner of land which borders a navigable waterway owns the property up to the high-water mark at the water’s edge. The government owns the water and land beneath it, and the public has an easement right to travel on the water. The owner would be unsuccessful because the owner's property extends only to the high-water mark.

Reverse mortgages can provide much-needed cash for seniors whose net worth is mostly tied up in the value of their home. In this instance age does in fact matter you must be at least 62 years or older to qualify for a reverse mortgage. There is no minimum credit score requirement for a reverse mortgage, primarily because the main thing lenders want to know is whether you can handle the ongoing expenses required to maintain the house. Lenders will, however, look to see if you're delinquent on any federal debt.

Corporations may be formed for profit or nonprofit purposes. A corporation is managed and operated by a board of directors. A corporation has certain rights, privileges, and liabilities beyond those of partnerships. Doing business as a corporation has its advantages and disadvantages. Because a corporation is a legal entity, it can purchase property. One large disadvantage especially when it comes to corporations is when owning income producing property they experience double taxation. Since its a legal entity they must pay taxes on profits. Dividends from the remaining corporate profits are then distributed to the shareholders and then taxed again as part of the shareholder's income.

The seller is usually entitled to keep the earnest money, because this is considered forfeiture of the contract. The only way the buyer can back out and get their earnest money back is if something happens with the inspection, appraisal, or they have a contract clause offering that protection.

Dower and Curtesy was an old law. Oftentimes, back in the day, real property owned by a husband was typically not inherited by the wife nor was the wife's property inherited by her husband. Instead, the property would either go to the children or some other member of the husband or wife's line. Since the late 1800’s the law has been largely abolished, however some states still hold the law true, but not Florida.

A blind offer in real estate is a purchase contract written by a buyer without seeing the property. This is common in commercial properties such as apartment complexes, and it’s not uncommon in multi-family homes such as duplexes and fourplexes. It’s not typical in single-family homes or apartments.

Fee simple absolute or (fee simple for short) is an estate in land. It is the highest form of real estate ownership that is recognized by law, in which the owner can enjoy the property to its fullest extent and is only limited by government powers which we’ll cover later on. Fee simple absolute is the greatest interest in a parcel of land that one can possibly own. The fee simple estate has unlimited duration and can be passed on to heirs. Read More Here

Receiving compensation from both the buyer and the seller is not an antitrust violation. Dual agency is when one real estate agent represents both the buyer and seller in a transaction. While it may seem ideal from an agent’s perspective, it can lead to some significant risks, which is why it is illegal in eight states. In most states, though, dual agency is legal, but state laws have measures in place to protect parties that use it. Still even in states where it is illegal it is not classified as an antitrust violation, while all the other examples are.

Encroachment is an intrusion on a person's territory or property. For those of you who are football fans, it's pretty much the same thing as the penalty. If a tree grows over someone's property, or when a fence or another piece of your neighbor's property crosses the property lines. Those are all examples of encroachment. Encroachment can lead to some large legal issues and if there are potential encroachment owners and agents should seek a solution immediately.

Under Florida law, a landlord must return the tenant's security deposit within 15 to 60 days after the tenant has surrendered the rental property to the landlord (that is, returned the keys and vacated the property), depending on whether the tenant disputes any deductions taken out of the security deposit.

Eminent Domain is a term used to describe the right of the government to takeover privately owned real estate usually despite the owners’ wishes. This often happens for land that is required for infrastructure like highways, major pipelines, railroads etc. The fifth and fourteenth amendments of the U.S. Constitution permit the government to exercise its power of eminent domain.

An addendum would be drafted to include the furniture he is purchasing, and any additional charge(s) for that furniture. Remember an addendum ADDS terms to a contract. An amendment typically changes terms of a contract. There is a difference, make sure to understand it!

An individual seeking to be excused from the requirements of a zoning ordinance needs a variance. A variance is a request to deviate from current zoning requirements. If granted, it permits the owner to use his land in a way that is ordinarily not permitted by the zoning ordinance.

Closing is always the final step in executing a real estate transaction. Closing is known by many names. Some areas may call it settlement and transfer, some may call it passing papers. Traditionally it is called closing.

Whenever you pay your agency fees a portion of those fees go towards the fund, the goal is for the fund to be $500,000.00. If it is lower than that the commission may ask for an additional fee or take money from interests built on investments.

There are three different main approaches that appraisers use while they make an appraisal. They are the Market Data Approach, Cost Approach, and Income Approach. The Market Data Approach is also commonly called the sales comparison approach. The Cost Approach is also referred to as summation. And lastly, the Income Approach, is also known as capitalization. Each method has its own set of benefits. When applied together, the various valuation methods provide the best estimate of the value of the income-producing real estate under evaluation.

The acceleration clause is a contract provision that requires a borrower to repay all of an outstanding loan if upon a breach of the contract.

Emblements are annual crops cultivated by a tenant that is treated as the tenant's personal property. Read More Here

Personal property is all things removable like clothes, lawn mowers, couches, TV's, and furniture. Real Property is all things attached to the land and all the legal rights to it. Real property is usually things that are immovable such as the home itself or the buildings within the property line. There are some exceptions of items that can be moved but are still real property, like for businesses. In this case the only item that would qualify as real property is garage.

Percentage lease which pertains to commercial real estate. A Percentage lease is a rental that is based on a percentage of the monthly or annual gross sales made on the premises. Percentage leases are common with large retail stores, especially in shopping centers.

The buyer doesn't need to know the sellers getting a divorce. Lead paint, and flooding, however, both must be disclosed (nationally). State laws differ on whether a buyer is entitled to know about deaths. In Texas, deaths from natural causes, suicides, or accidents unrelated to the property do not have to be disclosed. However, deaths related to the condition of the property or violent crime on the property must be disclosed. Other states impose a duty on a stigmatized property in which there has been a suicide or murder.

Depreciation is any loss in the value of a property over time from any cause. There are three main forms of depreciation: Economic Obsolescence, Functional Obsolescence, and Physical Deterioration.

The difference between a lease option and lease purchase agreement is that the lease option only obligates the seller to sell. With a lease option the buyer is not forced to buy the property, if they change their mind or cannot obtain financing. A lease purchase agreement commits both parties to the sale barring breach of contract or the buyer's inability to secure a mortgage.

While discrimination of race, gender, and religion are all illegal today, back then the specific law that extended equal rights in real property to members of all races was the Civil Rights Act of 1866.

Usually, the lender or financing organization will hire the appraiser. Technically the seller pays for the appraiser since it comes out of the final sales price, however the hiring aspect is almost always done by the lender.

The proper procedure for changing a contract that has already become binding is to sign a separate amendment. Remember, separate amendments are used to modify or change executory contracts.

The surface rights are the rights to use the surface of the earth. Subsurface rights are the rights to the natural resources lying below the earth's surface. Interestingly an owner may transfer rights without transferring the subsurface rights. For example, a landowner can sell his rights to an oil and gas company in his land but still can own the land itself.

By definition, a servient estate is a parcel of land that is subject to an easement.

Trusts can be created during an individual's lifetime, or they can be established following someone's death. A trust is a three-party relationship in which the first party, the trustor or settlor, transfers a property upon the second party for the benefit of the third party, the beneficiary. The trustee is required to manage the trust property in accordance with the trustor's wishes and in the beneficiary's best interests. A trustee can be an individual or a financial institution such as a bank.

A non-exclusive buyer agency agreement allows buyers to hire more than one agent to find their home; however, buyers must inform each agent they work with that another agent is involved and whether they have shown them specific homes.

The buyer can withdraw their offer as long as the seller did not accept the offer and the buyer can obtain the $3,000 deposit. This is all because the seller has to accept the offer. Remember an offer isn’t legally binding until it becomes a contract through acceptance.

Color of title refers to a claim to title that appears to be legally valid but may be defective. This legal concept is often discussed in adverse possession claims. If adverse possession is claimed under color of title, usually the claims are met sooner or in an easier fashion. Read More Here

All individuals who hold an active Florida real estate license are required to complete 18 hours of Commission approved continuing education during each two year renewal period.

The Department of Business and Professional Regulation has the power to prosecute for violation of any rule or law under its administration.

Acceleration is a term associated with mortgages. The acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if payments are not being made or there is a breach of contract. Usually, if a borrower isn’t making any payments on the property the acceleration clause will come into effect. Which demands immediate payment for the said property. It’s more of a legal clause that they add for protection to make sure borrowers aren’t taking advantage of them.

Real Property is all things attached to the land and all the legal rights to it. Real property is usually things that are immovable such as the home itself or the buildings within the property line. There are some exceptions of items that can be moved but are still real property, like for businesses. Business-related items like mineral rights, or if you own a farming business it would include crops, barns, and stables. Those are all considered real property because it is part of the business.

Steve should advise the other agents this could constitute a violation of Sherman Antitrust Act. The Sherman Antitrust Act prohibits price-fixing. Real estate agents and brokers should understand that any discussion about commission could constitute a violation of the laws even if only implied.

A month-to-month tenancy is a periodic tenancy that does not have an expiration date and thus runs indefinitely. Since a month-to-month tenancy is a real estate contract, it must have consideration, offer and acceptance, legal object, and competent legal parties. If it's for less than one year, it can be oral with some exceptions.

Eminent domain is the government’s constitutional right to take over privately-owned real for public use (usually despite the owners’ wishes). Eminent domain for the federal government is protected under the Fifth Amendment of the Constitution, while for state governments, it is protected under the Fourteenth Amendment. Mr Jay’s example is an example of eminent domain. Read More Here

Usury is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. Currently, most states have usury laws in place and set a cap on the maximum amount of interest a lender can charge. These rates can vary significantly by state and may differ depending on the type of financial product you’re using. Usury is a form of predatory lending.

It generally has to do with performance. Time is of the essence clause in real estate contracts refers to a clause that requires one party in a real estate contract to fulfill their obligations within a specific time frame.

The U.S. Department of Housing and Urban Development's Office (or HUD) administers and enforces federal laws and establishes policies that make sure all Americans have equal access to the housing of their choice.

When contracting parties have signed a contract and both parties have done all they promised to do, it is called an executed contract or executed agreement.

Void contracts are not contracts because they lack an essential element of a contract and are thus unenforceable. Voidable contracts have the necessary elements to be enforceable, so they appear to be valid, but can be rejected by one party if the contract is discovered to have any number of defects.

In an exclusive right to sell listing the agent gets paid no matter who sells the property, regardless of whether it’s the agent or the seller. Knowing this, it's safe to assume this was an exclusive right to sell listing.

A warranty deed can include six forms of covenants for title. A warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer). The general warranty deed offers the grantee the most protection. With this type of deed, the grantor makes a series of legally binding promises (called covenants) and warranties to the grantee agreeing to protect the grantee against any prior claims and demands of all persons whomsoever in regards to the conveyed land. Typically a warranty deed has five to six covenants.

If problems emerge after a sale is complete; that is not the seller's problem, and not a cause for the buyer to sue. Unfortunately, exactly when a problem started and when the seller first "knew" about it are not always clear. In this instance the seller didn't know about the issue, meaning she is not liable for failure to disclose the material defect.

The general warranty deed offers the grantee the most protection. General warranty deeds protect homeowners from stakes and claims from previous people, from the beginning of time to right now. It also protects homeowners from any potential encumbrances. A general warranty deed grants an undeniable fact that this property is coming with no liens and no heirs they could potentially lay claim to the piece of property. Read More Here

Duress is the unlawful constraint or action exercised upon a person whereby the person is forced to perform an act against his or her will. A contract entered into under duress is voidable.

The Commission consists of 7 members, 5 who must hold a real estate license. “Four members must be licensed brokers, each of whom has held an active license for the 5 years preceding appointment; one member must be a licensed broker or a licensed sales associate who has held an active license for the 2 years preceding appointment; and two members must be persons who are not, and have never been, brokers or sales associates.” Per Florida Statutes 475.02 Florida Real Estate Commission.

Closing is the final step in executing a real estate transaction. It is when official ownership and payment is transferred to the rightful parties. The fees that the buyer pays to close the deal are called closing costs.

A balloon loan is a mortgage which does not fully amortize over the term. Amortization is when payments divide into equal amounts for the duration of the loan. A balloon loan is different as not all payments are equally divided and the most substantial payments are called Balloon payments. A common example of a balloon loan is the seven-year Fannie Mae Balloon, which features monthly payments based on a 30-year mortgage. Making the rate of payments much lower. At the end of seven years, the rest of the loan is due. This last payment is called a balloon payment because of its large size. At that point, the borrower may sell the home to cover the balloon payment or take out a new loan to cover the payment, effectively refinancing the mortgage.

The subordination clause in real estate establishes order of priorities of financial claims (liens). The subordination clause effectively makes the current claim number 1 to any existing claims that have already been recorded.

If a dispute is pending, the court will likely issue an injunction preventing Mr. Joe from cutting down the trees until they are entirely resolved. Injunctions can be used to protect interests in real property. A court ordered injunction can be used to prevent a harmful action, stop ongoing or repeated conduct, or force a defendant to take action to prevent harm.

Severance is the opposite of attachment. Severance is taking an item that is attached to the land and removing it as personal property.

Fixtures are personal property attached to the land to count as real property. Window blinds are screwed into the house, therefore they are considered a fixture in this example.

The Purchase Agreement is a contract that legally binds two or more parties together, to specific obligations, that create a legally binding contract between the buyer and the seller. A good example of a purchase agreement is when you order something online. Sometimes websites will ask you to sign or check a box that says terms and conditions. That's a purchase agreement. Most people don’t normally read those but truely should. Real Estate Purchase Agreements are the same but at a larger scale.

There are two types of inactive license status in Florida, voluntary inactive and involuntary inactive. A licensee with an inactive license (both voluntary and involuntary) cannot legally perform or be compensated for real estate services. An individual who does not renew their license will have their license automatically placed in an involuntary inactive status.

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.

The actual transfer of title in a real estate transaction is handled by lawyers or title agencies, not the agent. However as with other legal aspects in the transactions a real estate agent needs to understand them. Alienation is the act of transferring title, ownership, an estate, or an interest in real estate from one party to another.

Remember, execution means the contract is closed and cannot be assigned. Only executory contracts can be assigned.

The term is used very often in real estate. Equity is the difference between the market value of your home and the amount you owe the lender who holds the mortgage. Your equity is the money you'd receive after paying off the mortgage if you were to sell the home.

Brokers are required by law to deposit the money in an escrow account no later than three business days after receiving it, according to the Rule 61J2-14.008(b)

A lien is a legal claim on an asset. Mortgages are a type of lien as it provides the lender a claim over the borrower’s assets and allows the lender the right to detain the assets, property or goods to secure payment. Read More Here

Covenants are agreements or promises within deeds. For example, a warranty deed can include six forms of covenants. Those six are a series of legally binding promises and warranties to the grantee agreeing to protect the grantee against any prior claims and demands of all persons whomsoever in regards to the conveyed land.

A conventional loan is a type of loan that is not insured or guaranteed by the government. Instead, the loan is backed by private lenders, and its insurance is usually paid by the borrower. Yes, typically they are the most popular but the best definition by far is the following: A type of loan that is not insured or guaranteed by the government, but backed by private lenders.

In order to qualify for the Fair Housing Act’s "Housing for Older Persons" Exemption, at least 80 percent of the units must have at least one occupant who is 55 years of age or older OR all units are occupied by residents over the age of 62.

Condemnation is the procedure used by a public or private entity with the powers granted from eminent domain to take privately owned real estate. eminent domain is the right which grants the government to take privately owned land from someone while condemnation is the action of taking that land.

Florida is NOT a Community Property state. The states that have community property laws are: Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin. Community property is property acquired that is considered to be obtained by mutual effort.

In real estate, the increase of the actual land via a stream, lake or sea by the action of water which deposits soil upon the shoreline is accretion.

Similar to a receipt, a bill of sale is a written instrument that attests to a buyer's purchase of property from a seller.

Once the appraisal has been performed on a property being bought with a VA loan, the Department of Veterans Affairs (VA) issues a Certificate of Reasonable Value. A Certificate of Real Estate Value documents the price at which a property was sold as well as any unique terms that were added to the transaction prior to its completion.

In order to qualify for the Fair Housing Act’s "Housing for Older Persons" Exemption, at least 80 percent of the units must have at least one occupant who is 55 years of age or older OR all units are occupied by residents over the age of 62.

Service Contracts are agreements between a customer or client and a person or company who will be providing services. A listing agreement is a service contract between the seller and the broker, or brokerage company.

The fiduciary duty of confidentiality lasts forever. Confidentiality requires that you do not disclose any information learned about your clients, their business, financial or personal affairs or motivations. Again, this duty lasts forever.

Specific performance is an equitable remedy in the law of contract, whereby a court issues an order requiring a party to perform a specific act, such as to complete performance of the contract. In our instance since the washer and dryer were included in the contract, the buyer may sue the seller for specific performance.

All of the following. Rescission or rescinding a contract is when a contract is rendered null and void and is no longer recognized as legally binding. Rescinding a contract is an option if there is proof that there was evidence of fraud, errors or mistakes, lack of legal capacity, fraud, and more.

In this situation, the new offer cannot be accepted unless the seller's counteroffer is withdrawn or hypothetically rejected. Remember, if a new offer is accepted two valid contracts could exist, so the first step must be to withdraw the counteroffer.

Surveying is the "general" technique of determining three-dimensional positions of points and the distances and angles between them. The point of a survey is to accurately measure land in a legal fair manner. While subdivision surveying is definitely a form of surveying this question is asking for the general form, which is just surveying.

In real estate, commingling refers to the act of mixing the client’s funds with the broker’s own funds. Commingling can be both legal and illegal depending on the state and circumstance. Typically, from an agent’s perspective, commingling should be avoided at all costs. Commingling can be legal in some circumstances, but in most cases, as an agent or a broker, it’s best to avoid it.

Property tax is an ad valorem tax assessed on real estate by a local government and paid by the property owner. Public services for real estate owners are paid by real property tax.

When an asset is no longer useful to its owner, then it is said to be past its economic life. The economic life of an asset could be different than its actual physical life. Economic life usually is shorter than physical life, as a structure generally will still physically exist but not be viable in the marketplace.

If any amount is paid out of the Real Estate Recovery Fund to settle a claim or satisfy a judgment against a licensee, his/her license must be suspended. The licensee must repay the settlement amount in full, plus interest, before the license can be reinstated.

In this instance age doesn't really matter. What does matter is that the middle age couple has a mortgage with a high interest rate and at the current rates at much lower. They would most likely qualify for a refinance and they would definitely derive the most value from it. Bonus tip. The rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%. Generally speaking, homeowners should have a solid credit score to refinance, although there are a few exceptions in government run loan assistance programs.

There are four main elements of a valid real estate contract: The party must be the legal age of 18 or older and deemed legally competent. The contract must be legal or hold a legal purpose. A clear and specific consideration must be included in the agreement. The contract must hold mutual consent or be agreed upon by both parties. If a minor signs the contract it is considered voidable.

Real estate has three physical characteristics that differentiate it from other assets in the economy: 1. Indestructibility meaning land cannot be destroyed or worn out. Its appearance may be altered but it always continues to exist. 2. Immobility meaning geographical location of the property remains the same & can never be changed, it is fixed. 3. Uniqueness or non-homogeneity meaning no parcels of real estate are exactly alike. Scarcity, improvements and permanence of investment are all economic characteristics of real estate.