Florida Real Estate Broker Exam — All Questions

Which characteristic of land best explains why real estate markets are local rather than national?

• a.Indestructibility of the land itself
• b.The long lead time required to add new supply
• c.Immobility of the land itself✓
• d.The high transaction cost of a typical sale

Immobility is the physical characteristic that land cannot be moved, so supply in one market can never be shifted to satisfy demand in another. That single fact forces real estate markets to clear locally, and it is why value responds to neighborhood conditions, local employment, and local government decisions on zoning and services. Indestructibility explains why land endures rather than why markets are local. Long development lead times explain why supply responds slowly to price changes, and high transaction costs explain why real estate markets are relatively illiquid, but neither confines a market geographically.

A Florida listing brokerage earns a 6 percent commission on a $300,000 sale and splits it equally with the cooperating brokerage. The listing brokerage's share is:

• a.$9,000✓
• b.$18,000
• c.$4,500
• d.$36,000

Work the total commission before the split: 6 percent of $300,000 is $18,000, and dividing that equally between the listing and cooperating brokerages leaves the listing brokerage $9,000. The $18,000 figure is the whole commission, correct right up to the point where the split was forgotten. The $4,500 figure comes from halving one time too many, and would be the listing agent's share only if the brokerage then split its half again with its own sales associate. The $36,000 figure doubles rather than halves. Note that this is the brokerage's share, from which any associate's split is still paid.

A rectangular Florida lot measures 150 feet by 290.4 feet. Its area is closest to:

• a.Half an acre
• b.1.5 acres
• c.2 acres
• d.1 acre✓

Multiply the dimensions to get the area in square feet: 150 feet times 290.4 feet equals 43,560 square feet. One acre is defined as 43,560 square feet, so the lot is almost exactly one acre. That constant is worth memorizing, because area problems on the Florida broker examination routinely require converting between square feet and acres in either direction. A useful check is that a square acre measures roughly 208.7 feet on a side, so a lot 150 feet wide must run a bit under 300 feet deep to reach an acre, which is consistent with the 290.4-foot dimension given.