1. A 1,800-sq-ft home would cost $210 per square foot to replace. It has an effective age of 12 years and a total economic life of 60 years. The land is valued at $95,000. Using the cost approach and age-life depreciation, what is the indicated value?
Answer & explanation
Answer: A. Cost new = 1,800 x $210 = $378,000. Depreciation = 12 / 60 = 20%; $378,000 x 0.20 = $75,600. Depreciated building = $378,000 - $75,600 = $302,400. Add land: $302,400 + $95,000 = $397,400. $302,400 forgets the land; $473,000 ignores depreciation.
2. The SE 1/4 of the SW 1/4 of a section is offered at $4,500 per acre. What is the price?
Answer & explanation
Answer: B. The parcel contains 640 / 16 = 40 acres, and 40 x $4,500 = $180,000. $720,000 would be the price of a full quarter section (160 acres).
3. How many acres are in the W 1/2 of the SE 1/4 of the NE 1/4 of the SW 1/4 of a section?
Answer & explanation
Answer: B. Denominators 2 x 4 x 4 x 4 = 128, and 640 / 128 = 5 acres. Ten acres would result from omitting the first 'W 1/2.'
4. How many members serve on the Florida Real Estate Commission?
Answer & explanation
Answer: C. Section 475.02 establishes a seven-member commission appointed by the Governor and confirmed by the Senate.
5. Unless the contract states otherwise, the FR/Bar contract treats the day of closing as belonging to the
Answer & explanation
Answer: D. The FR/Bar forms prorate items through the day prior to closing, so the seller is charged through the day before closing and the buyer owns the day of closing.
6. Within what period must a complaint be filed with the Florida Commission on Human Relations under the Florida Fair Housing Act?
Answer & explanation
Answer: B. Section 760.34(2) requires a complaint within 1 year after the alleged discriminatory housing practice. Two years is the deadline for filing a civil action under s. 760.35.
7. Price $350,000; seller's mortgage payoff $190,000; brokerage fee 6%; deed stamps at Florida's statewide rate; tax proration owed by seller $1,850; other seller costs $1,200. What are the seller's net proceeds?
Answer & explanation
Answer: D. Deed stamps = 3,500 x $0.70 = $2,450. Brokerage fee = $350,000 x 0.06 = $21,000. Seller debits = $190,000 + $21,000 + $2,450 + $1,850 + $1,200 = $216,500. Net = $350,000 - $216,500 = $133,500. $135,950 forgets the deed stamps.
8. A seller is grateful to sales associate Tom and hands him a $1,000 check at closing. Under Florida law, Tom
Answer & explanation
Answer: A. A sales associate may collect money in connection with brokerage only in the name of and with the consent of the employing broker. Associates do not hold escrow accounts.
9. How many feet of fencing are needed to enclose the perimeter of a 40-acre quarter-quarter section?
Answer & explanation
Answer: C. A quarter-quarter is 1,320 feet on each side (a quarter mile), so 4 x 1,320 = 5,280 feet. 2,640 feet is the side of a full quarter section.
10. A 24-unit apartment building rents each unit for $1,100 per month. Vacancy and collection loss is 5%, annual operating expenses are $110,000, and annual debt service is $95,000. Using an 8% cap rate, what is the value?
Answer & explanation
Answer: B. PGI = 24 x $1,100 x 12 = $316,800. EGI = $316,800 x 0.95 = $300,960. NOI = $300,960 - $110,000 = $190,960 (debt service is NOT deducted). Value = $190,960 / 0.08 = $2,387,000. Subtracting debt service too gives $95,960 / 0.08 = $1,199,500, which is wrong.
11. What is the distance from the north line of Section 1 to the south line of Section 36 in a standard township?
Answer & explanation
Answer: D. Section 1 is in the top row and Section 36 is in the bottom row, so the distance spans the full height of the township, 6 miles. Five miles would be the distance between section centers in the top and bottom rows, not between the outer lines.
12. How many acres are in the NE 1/4 of the SW 1/4 of a section?
Answer & explanation
Answer: A. Multiply the denominators (4 x 4 = 16) and divide 640 by 16 to get 40 acres. One hundred sixty acres is a full quarter section, which is what you get if you stop at the first fraction.
13. A rectangular lot measures 120 feet by 200 feet. Approximately what fraction of an acre is it?
Answer & explanation
Answer: B. Area = 120 x 200 = 24,000 sq ft. Acres = 24,000 / 43,560 = 0.551, about 0.55 acre. 1.81 inverts the division (43,560 / 24,000).
14. A 5-acre tract is offered at $3.25 per square foot. What is the asking price?
Answer & explanation
Answer: C. Square feet = 5 x 43,560 = 217,800. Price = 217,800 x $3.25 = $707,850. $217,800 is the square footage, not the price; $141,570 is the price of only one acre.
15. A waterfront lot measures 90 feet by 150 feet and sells for $2,000 per front foot. What is the price?
Answer & explanation
Answer: B. Frontage is the first dimension (90 ft), so 90 x $2,000 = $180,000. Using 150 feet would give $300,000, a common error from using the depth.
16. A Florida resident licensee moves permanently to Texas. She must notify the commission within
Answer & explanation
Answer: C. Section 475.180 requires a resident licensee who becomes a nonresident to notify the commission within 60 days. The 10-day rule applies to address changes, a tempting distractor.
17. An office building produces net operating income of $66,000. Comparable sales indicate a capitalization rate of 7.5%. What is the estimated value?
Answer & explanation
Answer: C. V = I / R = $66,000 / 0.075 = $880,000. Multiplying instead ($66,000 x 7.5 = $495,000) is the common error. Always divide income by the rate to find value.
18. A commercial building is purchased for $1,100,000; 25% of the value is allocated to land. What is the approximate annual straight-line depreciation?
Answer & explanation
Answer: C. Land = $1,100,000 x 0.25 = $275,000, so the building = $825,000. Commercial (nonresidential) real property uses a 39-year recovery period: $825,000 / 39 = $21,154 (rounded). $28,205 wrongly depreciates the full price including land ($1,100,000 / 39); $30,000 wrongly uses the 27.5-year residential period ($825,000 / 27.5).
19. A homestead has an assessed value of $350,000. Assume the homestead exemption totals $50,000 for all levies in this problem and the millage rate is 20 mills. What is the annual tax?
Answer & explanation
Answer: D. Taxable value = $350,000 - $50,000 = $300,000. Tax = $300,000 x 0.020 = $6,000. $7,000 ignores the exemption. (In actual practice the second exemption does not reduce school taxes, which is why the question states the simplifying assumption.)
20. A non-homestead property has a taxable value of $180,000. The total millage rate is 17.5 mills. What is the annual tax?
Answer & explanation
Answer: D. 17.5 mills = 0.0175. $180,000 x 0.0175 = $3,150. Or ($180,000 / $1,000) x $17.50 = 180 x $17.50 = $3,150. $31,500 results from misplacing the decimal (0.175).
21. If the NOI of a property stays the same and the market capitalization rate rises, the property's value will
Answer & explanation
Answer: D. Value = NOI / cap rate. With a fixed NOI, a larger divisor gives a smaller value. A higher cap rate signals higher perceived risk, so investors pay less for the same income.
22. A developer pays $1,600,000 for the S 1/2 of the SE 1/4 of a section. What is the price per acre?
Answer & explanation
Answer: C. The parcel is 640 / 8 = 80 acres, so $1,600,000 / 80 = $20,000 per acre. Using 160 acres (the full quarter) would wrongly give $10,000.
23. Annual property taxes are $4,380. Closing is August 15, 2026, and the buyer owns the day of closing. Using a 365-day year, what is the tax proration entry?
Answer & explanation
Answer: C. Step 1: Daily rate = $4,380 / 365 = $12.00. Step 2: Seller's days Jan 1 to Aug 14 = 31+28+31+30+31+30+31+14 = 226. Step 3: 226 x $12 = $2,712. Florida taxes are paid in arrears, so the seller owes the buyer: debit seller, credit buyer. $2,724 counts the closing day for the seller; $1,668 is the buyer's share.
24. A sales associate who changes employing brokers must notify the commission within
Answer & explanation
Answer: C. Section 475.23 requires notice within 10 days when a sales associate changes employers; the license ceases to be in force until the change is recorded.
25. How many acres are in 'the NW 1/4 of the NE 1/4 and the N 1/2 of the NE 1/4 of the NE 1/4' of a section?
Answer & explanation
Answer: C. 'And' joins two separate parcels: 640 / 16 = 40 acres plus 640 / 32 = 20 acres, totaling 60 acres. Treating 'and' as 'of' would give a much smaller number.
Sources
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