PSI National Exam for Real Estate
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is
called - Answer- a contract
Antitrust laws prohibit competing brokers from all of the following - Answer- 1.
boycotting other brokers in the marketplace.
2. dividing the market to restrict competition.
3. agreeing to set sales commissions and management rates.
When a sewer line is installed down a rural road, the cost will probably be shared by
- Answer- all current owners of real estate fronting on that road
State laws differ on whether a buyer is entitled to know about - Answer- a suicide
that occurred in the house last year.
A lawsuit for inverse condemnation may be brought by - Answer- a homeowner
When is racial discrimination in the rental of rooms or apartments permitted? -
Answer- Under no circumstances
The real estate broker who is listing a house for sale should personally verify -
Answer- the number of square feet in the building
Real property can be converted to personal property by - Answer- Severance
Prospective buyers made an offer on a property. The seller did NOT accept, but
made a counteroffer. The
prospective buyers signed the counteroffer and the real estate agent delivered their
acceptance to the seller.
In the interim, the same buyers had found another house that they liked better and
made an offer on it, which was accepted. Which of the following is TRUE? - Answer-
Both contracts are valid
Although states make specific laws governing water rights and the rights in land that
borders water, most states
generally follow one of two basic doctrines regarding water rights. In many states,
the common law doctrine of riparian and littoral rights dictates that water rights are
automatically conveyed with property. In others, all water rights are controlled by the
state under the doctrine of - Answer- prior appropriation
The purpose of requiring an earnest money deposit in a real estate sales contract is
to - Answer- provide evidence of the buyer's intention to carry out the contract.
A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer
the loan for 15 years at 5 1/2%
or for 30 years at 6 1/2%. To the nearest cent, what is the difference between the
monthly payments for these two loans?
,(BE SURE TO USE THE AMORTIZATION TABLE.) - Answer- $409.20.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to - Answer- demand immediate payment of the
entire note
The FHA functions MOST like - Answer- an insurance company
1. They are used to buy down interest rate.
2. They are a function of the marketplace.
3. They are paid by either the buyer or the seller. - Answer- discount points
When land is conveyed to a trustee, the trustee may - Answer- do whatever is
permitted under the trust agreement
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.
While an agent is showing a listed property, the seller and the buyer enter into an
oral agreement for the purchase of the home. If a dispute over the terms arises later,
the agreement may be unenforceable because - Answer- the agreement does not
comply with the Statute of Frauds
Earnest money should be deposited into a trust account - Answer- in a timely
manner, according to state laws
A deed restriction is applicable to the activities of - Answer- all owners, present and
future
An easement can be terminated by - Answer- prescription
Depreciation is calculated based on the - Answer- cost of the building only
Which of the following approaches MOST reliably estimates the sales price of a
single-family residence? - Answer- Market data
A seller mentions to his agent that the previous owners of his property may have
dumped hazardous waste on the site. Under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), who is liable for damages
from
the dumping prior to the sale of the property? - Answer- Seller
The escrow officer or closing agent MUST give information regarding the sales price
and seller's social security number to - Answer- IRS
A broker supplies the financing for a project to build condominiums with the
stipulation that he has the exclusive right to sell the completed condos. Which of the
,following BEST describes this relationship? - Answer- Agency coupled with an
interest
If you own a building free and clear that is worth $115,000 and want an annual return
of 12%, what net income is needed each month? - Answer- $1,150
Usury laws were enacted to protect the - Answer- borrower
At the time of listing, the seller tells the listing agent they are moving because the
neighbor has loud parties every weekend.
The agent should - Answer- tell potential buyers about the parties
When one of the parties to an agreement fails to perform one of its conditions, that
contract is deemed to be - Answer- breached
Which of the following is NOT a consideration in the definition of market value? -
Answer- Buyer and seller must agree to appraised value
One common method for controlling the problems created by conflict of interest in
dual representation is - Answer- allowing a broker to designate separate salespeople
within the company as legal representatives of each of the clients.
Ownership of common stock in a corporation gives - Answer- an interest that is
classified as personal property
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
Too much leverage may result in - Answer- negative cash flow
A major reason for buying and owning a condominium rather than a detached single-
family home is that - Answer- a condominium tends to be more affordable
An adjustable rate loan should include all of the following elements - Answer- 1.
margin
2. life-of-the-loan cap
3. index
Regulation Z requires that the borrower be fully informed of all of the following -
Answer- 1. loan fees.
2 .the origination fee.
3. the annual percentage rate
A couple signed a lease on an apartment for a period of 1 year. The lease does NOT
contain an automatic renewal clause. The couple plans to move out at the end of the
lease rather than renew it. How much notice MUST they give to comply with
the lease term? - Answer- No notice is required
, The relationship in which the agent is placed in the position of trust and confidence
to the principal is known by the term - Answer- fiduciary
A couple are moving to a new city. They have decided to rent temporarily before
buying a house to see which part of the city
they would like to live in. What type of lease would BEST suit the couple's needs? -
Answer- Month-to-month lease
A broker says, while showing a rural property, "This property has the world's purest
well water." This would be an example of - Answer- an expression of opinion, or
puffing, which could lead to misrepresentation
A contract has been drawn which obliges the sellers to convey title to their land to
the buyers if the buyers come up with
$22,000 on or before December 31st. This is called - Answer- an option contract
Errors and Omissions insurance covers the broker for - Answer- unintentional
misrepresentations
The land description T3N, R4W Principal Meridian refers to what method of property
description? - Answer- Rectangular survey.
All of the following are methods to calculate the reproduction or replacement cost of
a building EXCEPT - Answer- straight-line method
The buyer is assuming a mortgage presently on the property in the amount of
$110,000. What is the adjustment made at closing? - Answer- Credit buyer
$110,000; debit seller $110,000
A salesperson lists a property with a contract that allows for subagency and dual
agency. The salesperson is - Answer- an agent to the broker and a subagent to the
principal.
The amount of commission to be paid is - Answer- agreed upon by the seller and
agent on the contract.
An appraiser MUST be licensed or certified to handle Federally related work on
residential property valued at more than - Answer- $250,000
An odorless, radioactive gas that can cause cancer - Answer- Radon
The document used in a real estate sale that establishes the legal rights of the buyer
and seller is the - Answer- purchase contract
A prospective seller asks a salesperson to recommend a listing price for a property.
The salesperson should suggest - Answer- a competitive market analysis to
determine the property's value.
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is
called - Answer- a contract
Antitrust laws prohibit competing brokers from all of the following - Answer- 1.
boycotting other brokers in the marketplace.
2. dividing the market to restrict competition.
3. agreeing to set sales commissions and management rates.
When a sewer line is installed down a rural road, the cost will probably be shared by
- Answer- all current owners of real estate fronting on that road
State laws differ on whether a buyer is entitled to know about - Answer- a suicide
that occurred in the house last year.
A lawsuit for inverse condemnation may be brought by - Answer- a homeowner
When is racial discrimination in the rental of rooms or apartments permitted? -
Answer- Under no circumstances
The real estate broker who is listing a house for sale should personally verify -
Answer- the number of square feet in the building
Real property can be converted to personal property by - Answer- Severance
Prospective buyers made an offer on a property. The seller did NOT accept, but
made a counteroffer. The
prospective buyers signed the counteroffer and the real estate agent delivered their
acceptance to the seller.
In the interim, the same buyers had found another house that they liked better and
made an offer on it, which was accepted. Which of the following is TRUE? - Answer-
Both contracts are valid
Although states make specific laws governing water rights and the rights in land that
borders water, most states
generally follow one of two basic doctrines regarding water rights. In many states,
the common law doctrine of riparian and littoral rights dictates that water rights are
automatically conveyed with property. In others, all water rights are controlled by the
state under the doctrine of - Answer- prior appropriation
The purpose of requiring an earnest money deposit in a real estate sales contract is
to - Answer- provide evidence of the buyer's intention to carry out the contract.
A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer
the loan for 15 years at 5 1/2%
or for 30 years at 6 1/2%. To the nearest cent, what is the difference between the
monthly payments for these two loans?
,(BE SURE TO USE THE AMORTIZATION TABLE.) - Answer- $409.20.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to - Answer- demand immediate payment of the
entire note
The FHA functions MOST like - Answer- an insurance company
1. They are used to buy down interest rate.
2. They are a function of the marketplace.
3. They are paid by either the buyer or the seller. - Answer- discount points
When land is conveyed to a trustee, the trustee may - Answer- do whatever is
permitted under the trust agreement
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.
While an agent is showing a listed property, the seller and the buyer enter into an
oral agreement for the purchase of the home. If a dispute over the terms arises later,
the agreement may be unenforceable because - Answer- the agreement does not
comply with the Statute of Frauds
Earnest money should be deposited into a trust account - Answer- in a timely
manner, according to state laws
A deed restriction is applicable to the activities of - Answer- all owners, present and
future
An easement can be terminated by - Answer- prescription
Depreciation is calculated based on the - Answer- cost of the building only
Which of the following approaches MOST reliably estimates the sales price of a
single-family residence? - Answer- Market data
A seller mentions to his agent that the previous owners of his property may have
dumped hazardous waste on the site. Under the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), who is liable for damages
from
the dumping prior to the sale of the property? - Answer- Seller
The escrow officer or closing agent MUST give information regarding the sales price
and seller's social security number to - Answer- IRS
A broker supplies the financing for a project to build condominiums with the
stipulation that he has the exclusive right to sell the completed condos. Which of the
,following BEST describes this relationship? - Answer- Agency coupled with an
interest
If you own a building free and clear that is worth $115,000 and want an annual return
of 12%, what net income is needed each month? - Answer- $1,150
Usury laws were enacted to protect the - Answer- borrower
At the time of listing, the seller tells the listing agent they are moving because the
neighbor has loud parties every weekend.
The agent should - Answer- tell potential buyers about the parties
When one of the parties to an agreement fails to perform one of its conditions, that
contract is deemed to be - Answer- breached
Which of the following is NOT a consideration in the definition of market value? -
Answer- Buyer and seller must agree to appraised value
One common method for controlling the problems created by conflict of interest in
dual representation is - Answer- allowing a broker to designate separate salespeople
within the company as legal representatives of each of the clients.
Ownership of common stock in a corporation gives - Answer- an interest that is
classified as personal property
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
Too much leverage may result in - Answer- negative cash flow
A major reason for buying and owning a condominium rather than a detached single-
family home is that - Answer- a condominium tends to be more affordable
An adjustable rate loan should include all of the following elements - Answer- 1.
margin
2. life-of-the-loan cap
3. index
Regulation Z requires that the borrower be fully informed of all of the following -
Answer- 1. loan fees.
2 .the origination fee.
3. the annual percentage rate
A couple signed a lease on an apartment for a period of 1 year. The lease does NOT
contain an automatic renewal clause. The couple plans to move out at the end of the
lease rather than renew it. How much notice MUST they give to comply with
the lease term? - Answer- No notice is required
, The relationship in which the agent is placed in the position of trust and confidence
to the principal is known by the term - Answer- fiduciary
A couple are moving to a new city. They have decided to rent temporarily before
buying a house to see which part of the city
they would like to live in. What type of lease would BEST suit the couple's needs? -
Answer- Month-to-month lease
A broker says, while showing a rural property, "This property has the world's purest
well water." This would be an example of - Answer- an expression of opinion, or
puffing, which could lead to misrepresentation
A contract has been drawn which obliges the sellers to convey title to their land to
the buyers if the buyers come up with
$22,000 on or before December 31st. This is called - Answer- an option contract
Errors and Omissions insurance covers the broker for - Answer- unintentional
misrepresentations
The land description T3N, R4W Principal Meridian refers to what method of property
description? - Answer- Rectangular survey.
All of the following are methods to calculate the reproduction or replacement cost of
a building EXCEPT - Answer- straight-line method
The buyer is assuming a mortgage presently on the property in the amount of
$110,000. What is the adjustment made at closing? - Answer- Credit buyer
$110,000; debit seller $110,000
A salesperson lists a property with a contract that allows for subagency and dual
agency. The salesperson is - Answer- an agent to the broker and a subagent to the
principal.
The amount of commission to be paid is - Answer- agreed upon by the seller and
agent on the contract.
An appraiser MUST be licensed or certified to handle Federally related work on
residential property valued at more than - Answer- $250,000
An odorless, radioactive gas that can cause cancer - Answer- Radon
The document used in a real estate sale that establishes the legal rights of the buyer
and seller is the - Answer- purchase contract
A prospective seller asks a salesperson to recommend a listing price for a property.
The salesperson should suggest - Answer- a competitive market analysis to
determine the property's value.
