PSI NATIONAL STUDY GUIDE QUESTIONS AND ANSWERS
GRADED A+
✔✔A buyer is purchasing a property for $95,000. The seller has an existing mortgage of
$65,750 which the buyer is assuming. The buyer has already deposited a $2,500
earnest money check. The seller agreed to pay a listing commission of 6.5% of the
sales price. How much cash will the buyer need at the closing? - ✔✔$26,750
✔✔Mortgage default insurance - ✔✔Is paid by borrower to protect lender
✔✔If the principal insists that she will not sell her house to black families, the broker
must - ✔✔Cancel the listing
✔✔The final appraisal step when the appraiser weighs the three approaches to value is
called? - ✔✔Reconciliation
✔✔Which one of the following buys mortgages - ✔✔Federal National Mortgage
Association (FNMA)
✔✔The Comprehensive Environmental Response Compensation and Liability Act
(CERCLA) created: - ✔✔a Superfund to clean up hazardous waste sites
✔✔The listing broker has done a visual inspection of the property and found no issues.
The seller's property disclosure states there are no problems. After closing, the buyer
finds long-standing issues with water entering the basement.
Who is most likely to be held liable for non-disclosure of this latent material defect? -
✔✔The seller, since brokers are not responsible for latent defects the seller does not
disclose
✔✔A broker states "this is the best house in the neighborhood," and the buyer
purchases the home. Later the buyer finds out it is not the best house in the
neighborhood. Can the buyer sue the broker? - ✔✔No, since the broker was clearly
puffing
✔✔When a buyer and a seller enter into a purchase agreement (contract of sale), the
legal remedy that each has to force the other transaction is - ✔✔specific performance.
✔✔A licensee when showing property MUST disclose - ✔✔material facts of which the
licensee is aware
✔✔In order for a property manager to determine the net operating income for the
investor/owner, which fees or expenses are subtracted from the effective gross income?
- ✔✔Operating expenses
, ✔✔The owners of a cooperative
apartment and the owners of a condominium apartment both - ✔✔pay assessments
✔✔A seller tells the listing agent that her home was treated for termites 10 years ago,
so there are no termites now. Before listing the property, the agent should - ✔✔tell the
seller to disclose the termite treatment on the property disclosure
✔✔An equal housing opportunity notice must: - ✔✔Be displayed in each office
✔✔The words "littoral", "riparian" and "prior appropriation" all refer to - ✔✔Water Rights
✔✔An acre of land contains: - ✔✔43,560 square feet
✔✔An appraiser would be most likely to rely on the cost approach in appraising a: -
✔✔church
✔✔Which one of the following governmental rights in property does not allow the
government to foreclosure (take') the property if the right is violated? - ✔✔Police power
✔✔A titleholder of a piece of real estate has passed away and in their will, they are
leaving the property to their son. The son wishes to sell the property. What type of deed
would the son sign to convey ownership to the new buyer? - ✔✔Personal representative
deed
✔✔An appraiser's compensation may be based on.... - ✔✔Time
✔✔In order to calm the fears of a buyer who is getting an Adjustable Rate Mortgage,
what statement would be the best? - ✔✔There is a limit to the amount of adjustments
called a cap
✔✔The type of deed that is best for the grantee (buyer) is: - ✔✔Warranty
✔✔ A legal description in land that includes language like "the old oak tree" or "the big
rock" would be - ✔✔Metes and bounds
✔✔As a licensee is showing a property contiguous to a lake, the licensee notices that
the lake has a large amount of algae. The buyer wishes to make an offer. What should
the licensee do? - ✔✔Encourage the buyer to have an authoritative party investigate the
algae growth.
✔✔All the following are protected classifications except - ✔✔Homosexuals
GRADED A+
✔✔A buyer is purchasing a property for $95,000. The seller has an existing mortgage of
$65,750 which the buyer is assuming. The buyer has already deposited a $2,500
earnest money check. The seller agreed to pay a listing commission of 6.5% of the
sales price. How much cash will the buyer need at the closing? - ✔✔$26,750
✔✔Mortgage default insurance - ✔✔Is paid by borrower to protect lender
✔✔If the principal insists that she will not sell her house to black families, the broker
must - ✔✔Cancel the listing
✔✔The final appraisal step when the appraiser weighs the three approaches to value is
called? - ✔✔Reconciliation
✔✔Which one of the following buys mortgages - ✔✔Federal National Mortgage
Association (FNMA)
✔✔The Comprehensive Environmental Response Compensation and Liability Act
(CERCLA) created: - ✔✔a Superfund to clean up hazardous waste sites
✔✔The listing broker has done a visual inspection of the property and found no issues.
The seller's property disclosure states there are no problems. After closing, the buyer
finds long-standing issues with water entering the basement.
Who is most likely to be held liable for non-disclosure of this latent material defect? -
✔✔The seller, since brokers are not responsible for latent defects the seller does not
disclose
✔✔A broker states "this is the best house in the neighborhood," and the buyer
purchases the home. Later the buyer finds out it is not the best house in the
neighborhood. Can the buyer sue the broker? - ✔✔No, since the broker was clearly
puffing
✔✔When a buyer and a seller enter into a purchase agreement (contract of sale), the
legal remedy that each has to force the other transaction is - ✔✔specific performance.
✔✔A licensee when showing property MUST disclose - ✔✔material facts of which the
licensee is aware
✔✔In order for a property manager to determine the net operating income for the
investor/owner, which fees or expenses are subtracted from the effective gross income?
- ✔✔Operating expenses
, ✔✔The owners of a cooperative
apartment and the owners of a condominium apartment both - ✔✔pay assessments
✔✔A seller tells the listing agent that her home was treated for termites 10 years ago,
so there are no termites now. Before listing the property, the agent should - ✔✔tell the
seller to disclose the termite treatment on the property disclosure
✔✔An equal housing opportunity notice must: - ✔✔Be displayed in each office
✔✔The words "littoral", "riparian" and "prior appropriation" all refer to - ✔✔Water Rights
✔✔An acre of land contains: - ✔✔43,560 square feet
✔✔An appraiser would be most likely to rely on the cost approach in appraising a: -
✔✔church
✔✔Which one of the following governmental rights in property does not allow the
government to foreclosure (take') the property if the right is violated? - ✔✔Police power
✔✔A titleholder of a piece of real estate has passed away and in their will, they are
leaving the property to their son. The son wishes to sell the property. What type of deed
would the son sign to convey ownership to the new buyer? - ✔✔Personal representative
deed
✔✔An appraiser's compensation may be based on.... - ✔✔Time
✔✔In order to calm the fears of a buyer who is getting an Adjustable Rate Mortgage,
what statement would be the best? - ✔✔There is a limit to the amount of adjustments
called a cap
✔✔The type of deed that is best for the grantee (buyer) is: - ✔✔Warranty
✔✔ A legal description in land that includes language like "the old oak tree" or "the big
rock" would be - ✔✔Metes and bounds
✔✔As a licensee is showing a property contiguous to a lake, the licensee notices that
the lake has a large amount of algae. The buyer wishes to make an offer. What should
the licensee do? - ✔✔Encourage the buyer to have an authoritative party investigate the
algae growth.
✔✔All the following are protected classifications except - ✔✔Homosexuals
