Colorado PSI Real Estate Practice Test Exam Questions And Answers

Colorado PSI Real Estate Practice Test Exam Questions And Answers The real estate agency relationship is best described as the - ANSWER -broker's representing the principal. A licensee has an agency representation agreement with a buyer. When showing another company's listing, what obligation does the licensee have to the seller and the listing broker at the other company? - ANSWER -Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer. The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that - ANSWER -he is no longer the listing agent. Which of the following would generally be included in the Phase I assessment of a parcel where hazardous substances may have been disposed? - ANSWER -an on site visual inspection A manufacturer under contract with a broker is seeking a 30,000-square-foot building to house his factory. The broker is showing him one that has only been used as a junk warehouse for the past fifty years. As they look around, near the ceiling they see old brown metal drums seemingly wired into the electrical system. How should the broker proceed - ANSWER -He should inform the client of the possibility that hazardous chemicals are present and recommend a baseline environmental assessment of the property as a contingency of the purchase. While touring a new listing a broker detects a very pronounced moldy odor. Upon inspection, the broker finds that all closets located on a particular wall in the vacant residence are extremely moldy. The mold growths are heavy, multi-colored and cover the lower back walls and part of the side walls and flooring of the closets, and the other associates on the tour are experiencing sneezing and watering eyes. The broker has already accepted the listing. What immediate action should the broker take regarding the listing status? - ANSWER -Inform the sellers in writing that there is a possible health hazard that should be inspected and, if necessary remediated, and the listing will be removed from the active list until such action is taken. A broker is developing a checklist to be used by licensees during the time period between writing a contract and closing. Which of the following items should be included in the "Property Inspections" section? - ANSWER -A place to list repairs, who will pay, and when repairs are to be completed. A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when - ANSWER -the seller accepts the offer. A buyer made an offer on an apartment building. The offer was not acceptable to the seller. When the buyer refused to accept the seller's counteroffer, the seller agreed to accept the original offer. What MUST happen now? - ANSWER Nothing; by making a counteroffer the seller released the buyer from the original offer. Even after an offer has been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist on a mutual release? - ANSWER -The buyer finds a better property for better terms. If the terms of a contract indicate that Party A will be obliged to perform her part of the contract only if Party B chooses to take a certain action, then the contract is a - ANSWER -unilateral contract in which only Party A has made a promise to perform. A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so? - ANSWER -The person appointed by the court to act for the disabled person must contract on his or her behalf. A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have? - ANSWER -The buyer may sue the seller for specific performance. An example of a contract terminated due to inability to perform would be one in which the - ANSWER -seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant. The sellers want to accept a purchase offer, but only if the price is raised by $5,000. What should they give the prospective buyer? - ANSWER -Counteroffer A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable? - ANSWER -The seller is heavily under the influence of alcohol at the time of signing When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should - ANSWER -have short deadlines. A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if - ANSWER -the owner withdraws the counteroffer before it is accepted A contract for the sale of a home has been signed by both parties. This contract will remain executory until - ANSWER -the transaction has closed. An exception to title insurance coverage is - ANSWER -defects that clearly appear in the title search. To be valid, every deed must - ANSWER -be executed by the grantor. When the sellers are lending part of the purchase price, they may secure the debt either with a deed of trust or a mortgage. For the seller, one benefit of the deed of trust is that - ANSWER -foreclosure is usually simpler and faster. At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing? - ANSWER -Debit seller $300; credit buyer $300. What is the duration of a home warranty's coverage? - ANSWER -as disclosed in the contract that offers the warranty