PSI Real Estate Salesperson Exam Questions with correct Answers

Eminent Domain - Answer- The ability of the government to acquire real property against the owner for the benefit of the public. Fee Simple - Answer- What is the most complete estate in real property? Puffing - Answer- What is an exaggerated statement. Reconciliation - Answer- What is the process of arriving at a final market value conclusion from the estimates of three appraisal approaches to value? Adverse Possession - Answer- The actual, visible, hostile, notorious, taking of another's land under a claim of title for a statutory period of time. Time is of the essence - Answer- A phrase in a contract that requires the performance of a certain act within a stated period of time. Leverage - Answer- The use of borrowed money to finance the bulk of an investment that one could not have afforded otherwise. Truth in Lending Act - Answer- What is another name for Regulation Z? Holdover Tenant - Answer- What is the official name of a tenant who remains in a leased property after the lease expires. Syndicate - Answer- A typical business arrangement that is created when individual persons invest money for real estate investments. Capital Gain - Answer- What is the profit from the sale of real estate called according to the IRS. Deficiency Judgement - Answer- What legal action can be sought in court by a mortgagee to recover lost money when the public sale of a forced foreclosed property does not pay off the entire mortgage debt? Ingress & Engress - Answer- Rights to enter and exit land? Foreclosure - Answer- What is it called when a lender initiates a court process that will result in the public sale of real property. Principal or Client - Answer- What is the name of the party being represented in an agency relationship? Wraparound Mortgage - Answer- What the type of mortgage represents a junior lien in which the second lender is used to payoff the first lender? Subordination Agreement - Answer- What is the contract that allows a junior lien to take priority over the first mortgage? Severalty - Answer- When title to real property is held by a single person, it is referred to as what form of ownership? A Setback - Answer- The difference in the boundary of real property and the location where a home or improvements can be built. Net Lease - Answer- What type of lease requires the lessee to pay the rent as well as the other cost in maintaining a rented property, i.e. taxes, insurance, utilities, repairs, etc.? Cost Approach - Answer- What approach to value is used when an appraiser determines the replacement amount of a building, minus depreciation, plus the estimated land amount. Equitable Title - Answer- After a buyer's offer to purchase is accepted but before the buyer acquires legal title, what type of interest is held by the buyer? Equity - Answer- The difference between the market value of real property and the mortgage debt. It represents the value to the owner? Package Mortgage - Answer- What kind of mortgage is secured by real property as well as (personal property) appliances? Open Listing - Answer- What is the type of listing in which a seller can employ 16 real estate offices simultaneously? The office that procures the buyer is the only office that gets paid. Deed Restrictions - Answer- Clauses in a deed limiting the futures uses of the real property? Servient Easment - Answer- What is a particular parcel of land called over which an easement runs that benefits an adjacent property? Steering - Answer- What is the act of directing prospective buyers toward particular areas of a community without regard to financial qualification? APR - Answer- This describes the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc. It is a finance charge expressed as an annual rate. 640 - Answer- How many acres are in a square mile? Suit for specific performance - Answer- What legal remedy allows one party in a contract to attempt to solicit the court to force another contract party in default to fulfill the agreed upon contract terms? Executed - Answer- How would a contract be described if all the parties had met all their obligations? Special Warranty Deed - Answer- With what type of deed does the seller guarantee good title to the buyer based upon the seller's ownership interest? Balloon Payment - Answer- What occurs at the end of a mortgage when the loan amount is not fully amortized? Encroachment - Answer- What is a building called when it is situated over another owner's real property boundary line? Life Tenant - Answer- Who is the owner of a life estate? RESPA-Real Estate Settlement Procedures Act - Answer- What is the law that requires lending institutions to provide borrowers of federally related mortgages with a booklet explaining settlement cost? Tenancy in Common - Answer- What kind of interest does a condo unit owner have in common elements? Special Assesment - Answer- If a municipality requires a particular area of the community to have curbs, what is the name of the fee charged to each owner for his proportionate share of this public improvement? Tenancy In Common - Answer- What type of ownership exists when two persons own an unequal, fractional interest in real property without the right or survivorship? Trust Deed - Answer- What is the type of deed that is used to transfer ownership of real estate from a trustor to a trustee? Blockbusting or Panic Peddling - Answer- What is the attempt by real estate licensees to get listings by persuading owners to sell their homes as the result of a concern about potential buyers who are of a particular minority group? Bundle of Legal Rights - Answer- To what real estate concept do the following rights refer: control within the law, exclusion, disposition, enjoyment and possession? General Partner - Answer- What is the title of the person who has overall responsibility for the real estate transactions of a limited partnership? Improvements - Answer- What are man made additions to land called? Fiduciary - Answer- What is the relationship of trust that a seller has with a real estate broker as the result of both parties entering into a listing contract? Remainder-man - Answer- What is the name of a third party who receives title to real property upon the death of a life tenant? Antitrust Laws - Answer- What laws prevents real estate brokers from engaging in the discussion of setting fixed rates of compensation? Suit to Partition - Answer- What is the court suit that is filed to terminate the co-ownership interest in tenancy in common or joint tenancy? Redemption - Answer- What is the basic right that permits a mortgagor in default to recover a property from a foreclosure sale by paying all owed costs on the property? Novation - Answer- What is the name of a new contract that is used for the purpose of eliminating and replacing an existing contract or the substitution of a new person over a previous person? Delivery and Acceptance - Answer- In order for the actual transfer of title of real property to take place between two parties in a deed, this must occur? Quitclaim - Answer- What type of deed gives to the grantee the weakest form of title position? Regression - Answer- What principal of value indicates that the worth of expensive real estate is decreased by the proximity to inexpensive real estate? Alienation - Answer- What clause in a mortgage prevents a seller from allowing a buyer to assume the seller's existing mortgage? Pur Autre Vie (For the life of another) - Answer- What is the type of life estate that is based on the life of someone other than the life tenant? Plottage - Answer- What principle of value indicates that uniting two adjoining parcels of land into one may result in a higher combined land value? Sale and Leaseback - Answer- What is the type of real estate financing arrangement by which the seller becomes the lessee of the same property? Constructive Notice - Answer- What is the public awareness that is given to everyone when a document is recorded? Trustee's Deed - Answer- What type of deed is used to transfer ownership from the trustee to the beneficiary of a trust? Riparian - Answer- What is the right of a real property owner that defines the property boundary line next to a stream? Prior Appropriation - Answer- What is the real estate principle used in some states that indicates that the right to use water and is controlled by the state? Seisin - Answer- What covenant in a general warranty deed guarantees that the seller owns the property and has the right to convey the title? Reversionary Interest - Answer- What is the particular interest that is held when a life estate is ended and the ownership goes back to the original owner? Common Elements - Answer- In what part of condominium property does the owner of a condominium unit have a tenancy in common? Installment Contract - Land Contract - Answer- In what type of real estate contract involving a transfer of title does the seller usually initially keep the title to the property? Police Power - Answer- Under what government power does a municipality have the right to enforce building codes? Non-Conforming Use - Answer- What is a property called that was in existence before the passage of the present zoning laws and is permitted to operate contrary to those same laws? Point of Beginning - Answer- What is the ending place in a metes and bounds legal description of real property? Gross Lease - Answer- In what type of lease does the lessor pays for the property expenses? Granting Clause - Answer- The actual words of conveyance of title are found in what part of a deed? Dual Agency - Answer- What concept expresses the simultaneous representation by a broker of two parties with conflicting interests to a real estate transaction? Gross Rent Multiplier - Answer- What variable figure expressed as an appraisal term is used to multiply the estimated monthly gross rent on residential property for the purpose of arriving at a market value of that property? Void - Answer- What status does a contract have that fails to contain all the essential elements? Tenancy by the Entirety - Answer- What type of concurrent ownership of real property is held solely by a husband and wife? Specific Lien - Answer- What type if lien affects the ownership of only one particular piece of real estate? Purchase Money Mortgage - Answer- What type of mortgage would exist if the real property offeree provides the financing for the offeror? Variance - Answer- What is it called when a land owner is given municipal approval to build a house higher than is currently allowed by the local ordinances? Mechanics Lien - Answer- A lien filed by a lumber yard against a particular indebted property owner would most probably be an example of what type of lien? General Agency - Answer- A real estate property manager typically operates within what type of agency with the property owner? Exclusive Right to Sell - Answer- What type of listing contract provides the greatest protection of compensation for a real estate broker? Implied Contract - Answer- What type of contract is created neither by a written agreement nor by orally spoken words but only by the actions of the parties? Tenancy at Sufference - Answer- What type of leasehold estate represents the illegal occupation of the leased premises by the lessee? Conformity - Answer- What principle of value refers to the fact that the highest values occur where real properties are similar to each other? Independent Contractor - Answer- What is the name of the IRS status of a real estate agent in which 90% or more of the income of the agent comes from sales production and through which the agent is individually responsible for paying income and social security taxes? Deed in Lieu of Foreclosure - Answer- What is the name of the type of mortgage default arrangement where the mortgagor gives title to the mortgagee instead of the traditional legal procedure? Severance - Answer- What is the n