PSI Exam Study Guide
Give an example of external obsolescence. - ANS- A car dealership is located downwind
of a new hog farm.
Access ramps to government buildings, grab-bars in public restrooms, and a row of pay
phones with several places lower than the others are examples of compliance with which
federal law? - ANS- American w/ Disabilities Act
A property owner lists a residence and specifically avoids telling the listing licensee
about a leaking roof. The licensee notices water stains in the closet ceiling, but considers
them old and never discusses them with either the owner or the buyer. The property is
sold w/o disclosing this condition and the buyer sues for damages based on material
misrepresentation. Do the seller and/or the licensee have any liability? - ANS- The seller
and the licensee are both liable b/c it is reasonable that the licensee should have
discovered the condition.
What document is used to transfer ownership of personal property that is included in the
sale of real estate. - ANS- Bill of Sale
A prospective buyer has offered $127,800 for a condominium that appraises at $122,500
and has made a deposit of $5,000. IF the buyer arranges a first mortgage of 85% of the
appraised value and asks the owner for seller-financing on the difference, how much will
that be? - ANS- 127,800-104,125=23,675
23,675-5000=18,675
$18,675
A buyer arranges for a $90,000 mortgage loan with an annual interest rate of 8% and a
fixed monthly payment of $745. If the first loan payment is due 30 days after the loan
origination date, how much of that payment will represent principal? - ANS- 745-600
=$145
PRT (90,000.0830 = 216,000/30=7200; 7200/12=600)
During an appraisal of a residential property, an appraiser estimates the cost of
rebuilding the subject property so that it is identical to its current size and condition.
This is an example of .... - ANS- Substitution
A developer has purchased a 17.3 acre property and intends to subdivide the property
into as many building lots as possible. If each lot must be at least 12,500 sq feet, and the
developer must dedicate a total of 1.7 acres for roads and subdivision recreation area,
, what is the MAXIMUM number of lots that can be created on this property? - ANS- 17.3 x
43,560 = 753,588 sq feet
1.7 x 43,560 = 74,052
753,588 - 74,052 = 679,536 sq feet
679,536/12,500
54.37
54 houses
According to the statue of frauds, in order for real estate ales contracts to be enforceable
in court they MUST be - ANS- in writing
Shortly after taking a property listing, the listing licensee is approached by a family
member who asks the licensee to prepare an offer at a significantly reduced price. Under
the common law of agency, the licensee MUST ..... - ANS- Disclose the family
relationship with the potential buyer to the seller
What would be a CORRECT statement about compensation arrangements in real estate
agency employment contracts? - ANS- Established by negotiation between the seller
and the agent
What type of ownership interest applies to parties who own real property as tenants in
common? - ANS- The ownership interests may be conveyed separately
A municipal mass appraisal has assigned a property a fair market value of $206,750. If
the municipality has a mill rate of 16.86 and assesses property at 70% of FMV, the annual
taxes on this property would be? - ANS- $206,750 x .70 = 144,725
144,725/1000= 144.73
144.73 x 16.86 = 2,440.64
What government power provides for the transfer of ownership of real property form an
owner to the State in the event of property owner dies w/o a will or known heirs? - ANS-
Escheat
A property deed indicated that the easternmost boundary includes a fifteen-foot right of
way allowing owners farther from the main road the right to cross the property. The
property across which the others are allowed to pass is known as a ..... - ANS- Servient
tenement
A developer approaches a municipality with a plan to purchase an available lot in a
growing neighborhood if they will allow it to be used for a combination laundry and
convenience store. What value is MOST apparent in the developer's plan? - ANS- Utility
Give an example of a general property condition categorized as material. - ANS- A
cracked foundation
Give an example of external obsolescence. - ANS- A car dealership is located downwind
of a new hog farm.
Access ramps to government buildings, grab-bars in public restrooms, and a row of pay
phones with several places lower than the others are examples of compliance with which
federal law? - ANS- American w/ Disabilities Act
A property owner lists a residence and specifically avoids telling the listing licensee
about a leaking roof. The licensee notices water stains in the closet ceiling, but considers
them old and never discusses them with either the owner or the buyer. The property is
sold w/o disclosing this condition and the buyer sues for damages based on material
misrepresentation. Do the seller and/or the licensee have any liability? - ANS- The seller
and the licensee are both liable b/c it is reasonable that the licensee should have
discovered the condition.
What document is used to transfer ownership of personal property that is included in the
sale of real estate. - ANS- Bill of Sale
A prospective buyer has offered $127,800 for a condominium that appraises at $122,500
and has made a deposit of $5,000. IF the buyer arranges a first mortgage of 85% of the
appraised value and asks the owner for seller-financing on the difference, how much will
that be? - ANS- 127,800-104,125=23,675
23,675-5000=18,675
$18,675
A buyer arranges for a $90,000 mortgage loan with an annual interest rate of 8% and a
fixed monthly payment of $745. If the first loan payment is due 30 days after the loan
origination date, how much of that payment will represent principal? - ANS- 745-600
=$145
PRT (90,000.0830 = 216,000/30=7200; 7200/12=600)
During an appraisal of a residential property, an appraiser estimates the cost of
rebuilding the subject property so that it is identical to its current size and condition.
This is an example of .... - ANS- Substitution
A developer has purchased a 17.3 acre property and intends to subdivide the property
into as many building lots as possible. If each lot must be at least 12,500 sq feet, and the
developer must dedicate a total of 1.7 acres for roads and subdivision recreation area,
, what is the MAXIMUM number of lots that can be created on this property? - ANS- 17.3 x
43,560 = 753,588 sq feet
1.7 x 43,560 = 74,052
753,588 - 74,052 = 679,536 sq feet
679,536/12,500
54.37
54 houses
According to the statue of frauds, in order for real estate ales contracts to be enforceable
in court they MUST be - ANS- in writing
Shortly after taking a property listing, the listing licensee is approached by a family
member who asks the licensee to prepare an offer at a significantly reduced price. Under
the common law of agency, the licensee MUST ..... - ANS- Disclose the family
relationship with the potential buyer to the seller
What would be a CORRECT statement about compensation arrangements in real estate
agency employment contracts? - ANS- Established by negotiation between the seller
and the agent
What type of ownership interest applies to parties who own real property as tenants in
common? - ANS- The ownership interests may be conveyed separately
A municipal mass appraisal has assigned a property a fair market value of $206,750. If
the municipality has a mill rate of 16.86 and assesses property at 70% of FMV, the annual
taxes on this property would be? - ANS- $206,750 x .70 = 144,725
144,725/1000= 144.73
144.73 x 16.86 = 2,440.64
What government power provides for the transfer of ownership of real property form an
owner to the State in the event of property owner dies w/o a will or known heirs? - ANS-
Escheat
A property deed indicated that the easternmost boundary includes a fifteen-foot right of
way allowing owners farther from the main road the right to cross the property. The
property across which the others are allowed to pass is known as a ..... - ANS- Servient
tenement
A developer approaches a municipality with a plan to purchase an available lot in a
growing neighborhood if they will allow it to be used for a combination laundry and
convenience store. What value is MOST apparent in the developer's plan? - ANS- Utility
Give an example of a general property condition categorized as material. - ANS- A
cracked foundation
