Real Estate PSI Practice Test 1
A broker, acting as agent for the seller, presents an offer to buy from the broker's former
college roommate. The broker knows that the buyer will increase the amount of the offer
if the seller turns down the offer. When presenting the offer, the broker should
1. tell the seller that the buyer will pay more.
2. not disclose that the buyer will pay more to ensure fair
treatment of all parties.
3. try to negotiate a fair compromise between what the seller is asking and what the
buyer is offering - ANS- 1
Which rule-of-thumb formula for estimating property value is being offered to an investor
who is told that a house renting for $900 a month should sell for about $90,000?
1. CMA
2. IRV
3. NOI
4. GRM - ANS- 4
Earnest money should be deposited into a trust account
1. in a timely manner, according to state laws.
2. upon removal of all contingencies.
3. at the broker's discretion.
4. according to MLS rules. - ANS- 1
An agency relationship between a property owner and a property manager is usually
created by
1. a management agreement.
2. payment of a management fee.
3. an exclusive agency agreement.
4. an independent contractor agreement. - ANS- 1
To what party or parties does the broker owe the fiduciary duty of care?
1. the seller
2. both the buyer and the seller
3. the party or parties employing the broker
4. the party or parties paying the commission - ANS- 3
A judgment has been properly recorded. Any subsequent purchasers, whether they have
actually examined the record or not, have been given
1. actual notice.
2. prescriptive notice.
, 3. constructive notice.
4. exculpatory notice. - ANS- 3
A major difference between freehold and nonfreehold estates is that all freehold estates
1. are of indeterminable duration.
2. terminate upon the death of the person on whose life they are based.
3. are inheritable by the holder's heirs.
4. are estates for a fixed term. - ANS- 1
A competitive market analysis is MOST often used for
1. estate tax purposes.
2. setting a listing price.
3. divorce proceedings.
4. property tax assessment. - ANS- 2
A seller's statement in a property disclosure document means
1. the owner is disclosing known latent defects.
2. nothing, because the seller will not be responsible for any defects.
3. the property is fully suitable for the uses contemplated by the buyer.
4. the owner creates a warranty that there are no defects in the property. - ANS- 1
To be valid, every deed must
1. contain a warranty.
2. include granting language.
3. be executed by the grantor.
4. be signed by the grantee if there are covenants. - ANS- 3
Without checking the facts, a broker who is the seller's agent tells a buyer that the
property taxes in a particular neighborhood are among the lowest in the area. The buyer
relies on the broker's statement and makes an offer on a house in the neighborhood.
Before closing, it is determined that the taxes are actually among the highest in the area.
The buyer could seek to rescind the contract on the basis of
1. puffing.
2. misrepresentation.
3. lack of care and diligence.
4. nothing; property tax - ANS- 2
Which of these Federal laws regulates the advertisement of a lender's credit terms (rates,
payment, etc.)?
1. Real Estate Settlement Procedures Act.
2. ECOA.
3. Regulation Z.
4. Federal Fair Housing Act of 1967 - ANS- 3
A broker, acting as agent for the seller, presents an offer to buy from the broker's former
college roommate. The broker knows that the buyer will increase the amount of the offer
if the seller turns down the offer. When presenting the offer, the broker should
1. tell the seller that the buyer will pay more.
2. not disclose that the buyer will pay more to ensure fair
treatment of all parties.
3. try to negotiate a fair compromise between what the seller is asking and what the
buyer is offering - ANS- 1
Which rule-of-thumb formula for estimating property value is being offered to an investor
who is told that a house renting for $900 a month should sell for about $90,000?
1. CMA
2. IRV
3. NOI
4. GRM - ANS- 4
Earnest money should be deposited into a trust account
1. in a timely manner, according to state laws.
2. upon removal of all contingencies.
3. at the broker's discretion.
4. according to MLS rules. - ANS- 1
An agency relationship between a property owner and a property manager is usually
created by
1. a management agreement.
2. payment of a management fee.
3. an exclusive agency agreement.
4. an independent contractor agreement. - ANS- 1
To what party or parties does the broker owe the fiduciary duty of care?
1. the seller
2. both the buyer and the seller
3. the party or parties employing the broker
4. the party or parties paying the commission - ANS- 3
A judgment has been properly recorded. Any subsequent purchasers, whether they have
actually examined the record or not, have been given
1. actual notice.
2. prescriptive notice.
, 3. constructive notice.
4. exculpatory notice. - ANS- 3
A major difference between freehold and nonfreehold estates is that all freehold estates
1. are of indeterminable duration.
2. terminate upon the death of the person on whose life they are based.
3. are inheritable by the holder's heirs.
4. are estates for a fixed term. - ANS- 1
A competitive market analysis is MOST often used for
1. estate tax purposes.
2. setting a listing price.
3. divorce proceedings.
4. property tax assessment. - ANS- 2
A seller's statement in a property disclosure document means
1. the owner is disclosing known latent defects.
2. nothing, because the seller will not be responsible for any defects.
3. the property is fully suitable for the uses contemplated by the buyer.
4. the owner creates a warranty that there are no defects in the property. - ANS- 1
To be valid, every deed must
1. contain a warranty.
2. include granting language.
3. be executed by the grantor.
4. be signed by the grantee if there are covenants. - ANS- 3
Without checking the facts, a broker who is the seller's agent tells a buyer that the
property taxes in a particular neighborhood are among the lowest in the area. The buyer
relies on the broker's statement and makes an offer on a house in the neighborhood.
Before closing, it is determined that the taxes are actually among the highest in the area.
The buyer could seek to rescind the contract on the basis of
1. puffing.
2. misrepresentation.
3. lack of care and diligence.
4. nothing; property tax - ANS- 2
Which of these Federal laws regulates the advertisement of a lender's credit terms (rates,
payment, etc.)?
1. Real Estate Settlement Procedures Act.
2. ECOA.
3. Regulation Z.
4. Federal Fair Housing Act of 1967 - ANS- 3
