FREC revamps broker licensure exam
Thursday, October 13, 2011
The Florida Real Estate Commission in July implemented a revamped broker licensure exam. Can you answer this sample question from the new exam?
Sample Closing Case
Seller has agreed to sell a duplex to Buyer for $170,000. Broker, who had listed Seller's property under an exclusive right of sale agreement, is to receive a commission of 7 percent of the sales price. Broker agreed to act as escrow agent for the parties and deposit Buyer's $3,000 binder deposit in her escrow account. Closing is to occur on July 3 and the closing day belongs to the buyer. Buyer will be getting a new 80 percent LTV mortgage.
A hazard insurance policy was issued to Buyer with an annual premium of $800. Buyer is to pay the policy premium at closing. The taxes on the property for this year will be $3,400.
Broker examined the duplex unit leases and found that Unit A rents for $800 per month, payable in advance on the first of each month. Unit B rents for $850 per month, payable in advance on the 16th of each month. Seller had not collected any type of deposit from the tenants.
Buyer had asked for a pest inspection and for a new survey, both conducted at Seller's expense. Broker located a pest inspector who charged $150 and a surveyor who charged $500. Seller agreed to purchase a title insurance policy for the buyer at a cost of $1,500. Buyer decided to have his attorney participate in the closing at a cost to him of $750. Broker was advised that an $18.50 fee would be charged to record the deed. Seller is to pay this expense.
All prorations will be based upon a 365-day year.
1 - How much are the government transfer taxes for Buyer and Seller and where is this information placed on the HUD-1?
- A. Seller $952; Buyer $204; Page Two
- B. Seller $952; Buyer $748; Page One
- C. Seller $1,190; Buyer $748; Page Two
- D. Seller $1,190; Buyer $748; Page One
2 - How much is the Buyer’s new mortgage and where is this information placed on the settlement statement?
- A. $136,000 Credit to the Buyer; Page One
- B. $136,000 Debit to the Buyer; Page Two
- C. $158,100 Credit to the Buyer; Page Two
- D. $158,100 Credit to the Seller; Page One
3 - The binder deposit on the HUD-1 is:
- A. $11,900 Debit to the Seller; Page One
- B. $11,900 Credit to the Buyer; Page Two
- C. $3,000 Debit to the Buyer; Page Two
- D. $3,000 Credit to the Buyer; Page One
4 - Where is the sales price placed on the settlement statement?
- A. Page One, Debit to the Seller only
- B. Page One, Credit to the Seller, Debit to Buyer
- C. Page One, Debit to the Seller, Credit to Buyer
- D. Page Two, Credit to the Seller only
1 – C
2 – A
3 – D
4 - B
Read what’s covered in the new exam