Practice Questions Archives - Page 2 of 2 - Demetree School of Real Estate

Understanding the Comparable Sales Approach on the Florida Real Estate Exam

A subject property has a pool, but the comparable property does not. If the pool is valued at $3,000, what adjustments should be made?

a. Add $3,000 to the subject
b. Subtract $3,000 from the subject
c. Add $3,000 to the comparable
d. Subtract $3,000 from the comparable

With the comparable sales approach, we are basically asking, “What do we need to do to make the comparable exactly like the subject?” If the subject property has a pool and the comparable does not have a pool, how do we adjust the comparable to make it just like the subject? We add a pool.

It is very easy to get this one mixed up if you try to do it without the formula. If you focus on the formula, you will get it right. The formula is: CBS-CIA. If the Comparable is Better, you Subtract. If the Comparable is Inferior, you Add. Never, never, never, never adjust the subject.

So if you saw the above question on the Florida real estate exam, you would know before you even read the question that A and B are wrong. That narrows it down to C or D. Since the comparable is inferior, we will add.

Focus on the formula, and you shouldn’t have any problems with this question.

Please note that neither I, nor anyone in the Climer family, have any affiliation with Climer School of Real Estate. My father, Ron Climer, sold Climer School of Real Estate in 2014. You can find me at Demetree School of Real Estate.

By Karen Climer|2021-08-25T14:46:32-04:00September 21st, 2017|

A Practice Question About Homestead Exemption

I think the best way you can study for the real estate licensing exam is to answer practice questions. Answering practice questions forces you to recall information from your memory in a way that other studying does not. So let’s do a practice question, shall we?

A person receives a homestead exemption of $50,000. Their tax rate is 24 mills. What is the assessed value of the home?

a. $50,000
b. $65,000
c. $72,500
d. $84,000

Many students immediately reach for their calculators when I show them this problem. I can’t blame them. When you see numbers, it looks like math. Once you think it through, though, you will realize that we won’t have quite enough information to do any math. In order to do math, we would need to know what the 24 mills pertained to. Is it the city and county tax rate? The school rate? All three added up? We don’t have that information, so the 24 mills is not useful.

But what we do know is that in order for the home to get a $50,000 exemption, the value of the home needs to be at least $75,000. If the property is worth less than $75,000, the exemption is somewhere between $25,000 and $49,999. We look at the choices and only one answer is more than $75,000. So the correct answer is D.

If you still don’t understand, and need more explanation, give me a call or sign up for my review class at Demetree School of Real Estate.

By Karen Climer|2021-08-25T14:50:19-04:00September 6th, 2017|