The CE Shop National Exam (PSI) PART 1
Addendum - ANS- When Dashiell received the purchase offer for his bungalow, he was
surprised to see a page added to the contract requesting that an attorney review the
contract. What is Dashiell looking at?
Place a lien on the property
Unpaid taxes become a lien on real estate. - ANS- What might the government do if
property owners fail to pay taxes on their property?
Ajit may be liable if he operates in a state that requires licensees to make a reasonable
effort to discover adverse material facts.
Licensees must follow state laws regarding disclosure of all material facts, but typically
there's no distinction between disclosure of material facts or adverse material facts. Ajit
may be liable even if the seller didn't disclose the fact, depending on state law. - ANS- A
former client has filed a formal complaint against Ajit, claiming he failed to properly
disclose a material fact that the seller didn't disclose. Which of these statements about
Ajit's liability is true?
1,425
Only finished above-ground space should be counted in Bonnie's MLS listing. That
means the square footage of the upper floor plus the main floor (minus the unfinished
laundry area). Bonnie should report 1,425 square feet (450 + 1,200 - 225). - ANS- Bonnie
is calculating the square footage of a listing. The upper level of the home is 450 square
feet. The main floor is 1,200 square feet, including an unfinished laundry area that's 225
square feet. The 1,200-square-foot basement is finished. Bonnie's MLS system
disregards below-grade square footage. What square footage will Bonnie mention in her
MLS listing and marketing materials?
Indestructibility
Indestructibility is the physical characteristic that states that while improvements may
deteriorate, land can't be destroyed. - ANS- Sander and Ginny bought an old industrial
site and plan to get grant money to put an environmental education center on the site.
There are a few structures on the property, but they are in disrepair, and it will likely be
less expensive to tear them down and build new than to rehabilitate them. However, the
new owners are sure that they've made a great investment because the land is in great
shape. This reflects which physical characteristic of real property?
, $367,687.80
To find the total amount paid back, multiply the monthly payment ($2,042.71) by the total
number of payments (180 = 12 payments/year x 15 years). The total paid back is
$367,687.80. - ANS- A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a
monthly principal and interest payment totaling $2,042.71. What's the total amount the
borrower will pay back over the life of the loan?
lower initial interest rate - ANS- What attracts borrowers to adjustable rate mortgages?
98,000
Minimum rent = Operating expenses + Owner expenses + ROI Margin. ROI margin is the
owner's initial investment x ROI. In this example $32,000 ($400,000 x .08). The minimum
rent to achieve the owner's goals is $98,000. - ANS- A rental property owner purchased a
property for $400,000 and pays $36,000 in ownership expenses, plus $30,000 in operating
expenses. The owner would like to achieve an ROI of 8%. What's the minimum annual
rent that would accomplish this?
Reduced consumer confidence makes new buyers wary of purchasing and homeowners
hesitant to trade up. - ANS- Many market conditions impact housing prices. Which of the
following is a true statement?
Identify data needed.
The first step is to state the problem so the appraiser can then identify the data that is
needed. - ANS- Identifying the purpose of the appraisal leads the appraiser to do what
next?
$52,500 - ANS- An owner purchased a rental property for $750,000. What annual cash
flow would result in a return on investment (ROI) of 7%?
Rescind
When two parties agree to back out of a contract, they're agreeing to rescind the
contract. - ANS- Stan decides to not sell his property to Crandall, even after they've
signed a legal sales contract. Crandall found a property he likes better, so they mutually
agree to ______ the contract.
Develop, implement, and train firm members on policies and procedures.
Addendum - ANS- When Dashiell received the purchase offer for his bungalow, he was
surprised to see a page added to the contract requesting that an attorney review the
contract. What is Dashiell looking at?
Place a lien on the property
Unpaid taxes become a lien on real estate. - ANS- What might the government do if
property owners fail to pay taxes on their property?
Ajit may be liable if he operates in a state that requires licensees to make a reasonable
effort to discover adverse material facts.
Licensees must follow state laws regarding disclosure of all material facts, but typically
there's no distinction between disclosure of material facts or adverse material facts. Ajit
may be liable even if the seller didn't disclose the fact, depending on state law. - ANS- A
former client has filed a formal complaint against Ajit, claiming he failed to properly
disclose a material fact that the seller didn't disclose. Which of these statements about
Ajit's liability is true?
1,425
Only finished above-ground space should be counted in Bonnie's MLS listing. That
means the square footage of the upper floor plus the main floor (minus the unfinished
laundry area). Bonnie should report 1,425 square feet (450 + 1,200 - 225). - ANS- Bonnie
is calculating the square footage of a listing. The upper level of the home is 450 square
feet. The main floor is 1,200 square feet, including an unfinished laundry area that's 225
square feet. The 1,200-square-foot basement is finished. Bonnie's MLS system
disregards below-grade square footage. What square footage will Bonnie mention in her
MLS listing and marketing materials?
Indestructibility
Indestructibility is the physical characteristic that states that while improvements may
deteriorate, land can't be destroyed. - ANS- Sander and Ginny bought an old industrial
site and plan to get grant money to put an environmental education center on the site.
There are a few structures on the property, but they are in disrepair, and it will likely be
less expensive to tear them down and build new than to rehabilitate them. However, the
new owners are sure that they've made a great investment because the land is in great
shape. This reflects which physical characteristic of real property?
, $367,687.80
To find the total amount paid back, multiply the monthly payment ($2,042.71) by the total
number of payments (180 = 12 payments/year x 15 years). The total paid back is
$367,687.80. - ANS- A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a
monthly principal and interest payment totaling $2,042.71. What's the total amount the
borrower will pay back over the life of the loan?
lower initial interest rate - ANS- What attracts borrowers to adjustable rate mortgages?
98,000
Minimum rent = Operating expenses + Owner expenses + ROI Margin. ROI margin is the
owner's initial investment x ROI. In this example $32,000 ($400,000 x .08). The minimum
rent to achieve the owner's goals is $98,000. - ANS- A rental property owner purchased a
property for $400,000 and pays $36,000 in ownership expenses, plus $30,000 in operating
expenses. The owner would like to achieve an ROI of 8%. What's the minimum annual
rent that would accomplish this?
Reduced consumer confidence makes new buyers wary of purchasing and homeowners
hesitant to trade up. - ANS- Many market conditions impact housing prices. Which of the
following is a true statement?
Identify data needed.
The first step is to state the problem so the appraiser can then identify the data that is
needed. - ANS- Identifying the purpose of the appraisal leads the appraiser to do what
next?
$52,500 - ANS- An owner purchased a rental property for $750,000. What annual cash
flow would result in a return on investment (ROI) of 7%?
Rescind
When two parties agree to back out of a contract, they're agreeing to rescind the
contract. - ANS- Stan decides to not sell his property to Crandall, even after they've
signed a legal sales contract. Crandall found a property he likes better, so they mutually
agree to ______ the contract.
Develop, implement, and train firm members on policies and procedures.
