PSI State Exam- Real Estate Salesperson (2023) Questions and Answers

The law which requires that transfers of real property ownership be in writing is known as the... - Answer- statute of frauds In a VA loan, there must be... - Answer- an approved appraisal When a land contract is entered into... - Answer- the buyer acquires equitable title A 5 bedroom, 1 bathroom residence is an example of what type of depreciation? - Answer- Functional Name 3 essential requirements for a valid deed... - Answer- 1. The buyer and seller must be named 2. Words of Conveyance 3. Competent Grantor If 2 married brothers own property as joint tenants and one brother dies, his wife owns... - Answer- no interest In a lease... - Answer- the original lessee could be liable for rent payments even though he sublets the premisis To use property for the best net return to the property is... - Answer- highest and best use What is the best way to find a could on title? - Answer- Title Search A life estate is... - Answer- a freehold interest in real estate and is considered real property Where a title search reveals that there is a broken chain of title, it can best be cured by... - Answer- Quitclaim deed When the lessor sells his leased property... - Answer- the lease is binding on the buyer The phrase, "principals only" excludes... - Answer- real estate broker a mechanics lein may not be levied by - Answer- real estate broker The covenant in a deed in which the grantor guarantees he has title is - Answer- seizen a judgement becomes effective when - Answer- it is recorded What is a private agency that buys and sells in the secondary mortgage market? - Answer- HUD (Housing of Urban Development) if title is indefeasible, it cannot be - Answer- voided when a broker signs a contract to manage an owners property, he becomes - Answer- a fiduciary a blanket mortgage - Answer- covers several parcels of land the holder of a life estate cannot... - Answer- commit waste recording acts passed by the various states - Answer- provide for constructive notice in estimating the value of real estate, you should consider... - Answer- income of the buyer if you possessed a fee simple estate, the property could be - Answer- sold, subdivided and mortgaged the recovery of the cost of improvements in a property over a set period of time is called - Answer- recapture an abstract of title Is best described as - Answer- a brief history of the title to a particular property the right of water company to lay and maintain mains along the rear of a lot is called - Answer- easement in gross which is correct for restrictive covenants? a) they may not be at variance with zoning ordinances b) they restrict the use of property c) they are imposed by government d) they are not encumbrances - Answer- b) they restrict the use of property in a residential lease, the security deposit - Answer- must be deposited in an insured depository when a husband and wife purchase a property jointly, and it is their intention that upon the death of either one the share of the deceased would pass to their heirs, they would elect... - Answer- tenancy in common a bonafide purchaser is a purchaser who - Answer- has entered into the purchase with good faith a change made to an existing will is known as - Answer- a condicil the bonanza savings bank makes a 30-year conventional loan at an annual interest rate of 8.5%. if it wishes to earn a yield of 9%, how many points must it charge? - Answer- 4 the abbreviation of "APR" stands for - Answer- Annual Percentage Rate a mortgage given by the purchaser to the seller in partial payment of the purchase price of the property is known as - Answer- purchase money mortgage the right of government to place reasonable restrictions on the use of privately held land is known as - Answer- police power a lien granted in favor of a person who furnished labor or materials for an improvement to a land is known as - Answer- a mechanic's lein the actual act of transferring ownership of land is known as - Answer- a grant it may be said that homogeneity is a neighborhood... - Answer- creates stability in values in which case would a custodian need a real estate license? - Answer- a) he rents a condo building for the association of owners b) he rents property for more than one owner chad morgidge leases a commercial warehouse to Sollum Lee Sware for 2 years. which is true? a) the lease must be in writing b) the rights of morgidge and sware are regulated by the NJ "truth in renting" law c) the security deposit does not have to be places in an interest bearing account d) this is called a devise - Answer- c) the security deposit does not have to beplaces in an interest-bearing account chad morgidge leases a commercial warehouse to Sollum Lee Sware for 2 years. which is true? a) the lease must be in writing b) the rights of morgidge and sware are regulated by the NJ "truth in renting" law c) the security deposit does not have to be places in an interest bearing account d) this is called a devise - Answer- c) the security deposit does not have to beplaces in an interest-bearing account a person who assumes an existing mortgage - Answer- becomes a co-guarantor along with the original maker the word "hypothecate" means to - Answer- pledge without giving up possession who is legally entitled to use real estate which has been sold at a tax sale during the 2-year period of redemption that follows? - Answer- owner of record conventional loans include - Answer- ARMs and Fixed Rate a writ which authorizes and directs the proper officer of the court to carry into effect the judgement or decree of the court is known as - Answer- writ of execution if a seller prepays taxes and insurance on a property, the process used to reimburse the seller for the unused portion is called - Answer- proration a charge level against real estate to cover the proportionate cost of a server installation is - Answer- an ad valorem tax a young couple wants to buy a home. their income is low now, but prospects are good for future earnings increases. they will apply for - Answer- an FHA 245 (gradual payment mortgage) the repayment of principal and interest within a specified period of time is - Answer- amortized loan which fee would a condo owner be least likely to be expected to pay? - Answer- stock transfer fee who is the final tenant on a sale and leaseback? - Answer- the seller the physical characteristics of land include (name 3 things) - Answer- 1. fixity 2. performance 3. non-homogeneity the responsibility of recording a deed lies with - Answer- the grantee to the owner of the property, an easement is - Answer- an appurtenance options and "first refusals" - Answer- must be written to be enforceable under the statute of frauds john and mary own and occupy a single family house. they are entitled to deduct the following from their federal income tax: - Answer- mortgage and interest payments on the mortgage issac died and left a 1000 acre farm in warren county to david. this is called a/an - Answer- devise which of the following is a unilateral contract? - Answer- option the process of taking private property for public use is referred to as - Answer- condemnation to the owner of the servient property an easement is - Answer- an encumbrance utilizing a property to its greatest economic advantage is commonly referred to as - Answer- highest and best use the cost approach to value - Answer- sets the upper limit of value a house and lot are prices at 15000 and 1000 respectively. how much cash is needed to purchase the property if the bank will loan 80% of the cost of the house only? - Answer- $4,000 an investor bought a 75 acre plot for 1450 per acre. taces and other expenses amounted to 6842 per year. at the end of 5 years the property was sold for a net price of exactly twice the original cost. what was the net profit on the sale? - Answer- 74,540 a couple bought a duplex and plan to live in one half while renting out the other to cover costs. expenses for one year are 1133, taxes are 115 and the loan payments are 195 per month. what must the monthly rent be? - Answer- 300 the sale of a parcel of real estate owned by a corporation is authorized by - Answer- a corporate resolution on jan 1, a seller paid 130 for a 3 year insurance policy and 625 in annual property taxes. if the house was then sold the following aug 1, what was the unused portion for taxes and insurance? - Answer- 365.40 an option is an example of - Answer- executory contract (still to be brought into effect) a lot 270x390 sells for 45000. another lot in close proximity is 90x130. what will the second lot sell for? - Answer- 5000 a 20000 loan is being paid off at a monthly rate of 7.50/month per 1000. taxes are $54 per year, and the 3-year insurance has a 360 premium. what was the first month's payment? - Answer- 164.50 how many square feet arein a lot whose scale dimensions on a blueprint are 13 1/2" by 17 1/4" ? - Answer- 15,336 a leasehold interest - Answer- may be created out of a fee simple interest a fiduciary relationship is established by - Answer- power of attorney a legal instrument that creates a lien against personal property is called - Answer- security agreement the tenancy created when a tenant fails to vacate at the end of a lease is called a - Answer- tenancy at sufferance title vested in one person is said to be in - Answer- severalty give 3 examples of involuntary alienation - Answer- 1. eminent domain 2. adverse possession 3. escheat a bag of fertilizer contains 210lbs of nitrates and 90lbs of moss. what % of the mix is nitrates? - Answer- 70% john owns a 2 family house in bayonne, NJ. he occupies one of the apartments and has a conventional mortgage. if he discriminates against a prospective tenant on account of race, it would be - Answer- unlawful a broker could properly advertise - Answer- free market study a NJ broker had been practicing for 5 years with a clean record, but then was charged with 3 violations of the license laws and brought before the REC. he would be subject to a maximum fine of - Answer- $25,000 the REC is funded by - Answer- the general treasury regarding the RE sales full disclosure act, what is incorrect? - Answer- the fee for an initial registration shall not exceed $1000 - FALSE! by statutory definition, which of the following activities, if done for compensation, does NOT constitute real estate brokerage? a. soliciting for prospective buyers b. making a real estate appraisal c. auctioning real estate d. trading or exchanging real estate - Answer- b. making a real estate appraisal under the NJ law against discrimination - Answer- discrimination on account of marital status is prohibited a real estate salesperson CAN do these 3 things - Answer- 1. can never be in charge of a branch office 2. cannot recover from the guarantee fund if his broker fails to pay him 3. cannot sue a client for compensation a promissory note as an earnest money deposit with an offer to purchase is acceptable with the written authorization of - Answer- the vendor (seller) if a licensee is found guilty of a 3rd violation of the license law, the Commission may... - Answer- direct that no real estate license ever again be issued to that person the REC settles commission disputes between NEITHER - Answer- brokers and salespersons NOR brokers and their clients the person who files a complaint under the federal fair housing act is - Answer- the complainant all places of business maintained by a real estate broker must (3) - Answer- 1. be open to the public during usual business hours 2. be independent of living quarters 3. state "licensed real estate broker" on the exterior in NJ, there is a right of redemption in connection with - Answer- tax sale (2 years) functional obsolescence would least likely include a. poor architecture b. poor design c. an outdated kitchen d. rotting wood - Answer- d. rotting wood in estimating the value of a church, the appraiser would use which approach? - Answer- the cost approach the most important factor influencing value is a. floor plan b. age c. location d. tax basis - Answer- c. location all of the following are types of depreciation except a. straight line b. sum of the years digits c. cost reproduction d. double declining balance - Answer- c. cost reproduction with regard to the senior citizen tax reduction, which of the following is not true? a. the senior citizen must occupy the property to qualify b. the SC is not eligible if his or her income exceeds 10000 per year c. application for same is made at the local level d. the reduction is allowed on any new jersey real estate owned by the senior citizen - Answer- d. (IS NOT TRUE): the reduction is allowed on any NJ real estate owned by the senior citizen a 1 year temporary brokers license may be issued - Answer- in the event of the death of the broker the primary purpose of the license laws is to - Answer- protect the public in real estate transactions sally, a licensed salesperson, resigned from the ABC agency. her broker must give her an accounting of earned, but unpaid commissions within what period of time? - Answer- 30 days ben broker had a lease signed by a landlord and tenant. he must provide all parties with copies of the lease within what period of time? - Answer- immediately a NY broker wished to obtain a nonresident brokers license in NJ. he must - Answer- file an "irrevocable consent" form with the NJ REC all members of the NJREC are - Answer- appointed by the governor FHA mortgage insurance is paid by the - Answer- borrower a real estate broker can legally prepare - Answer- a purchase and sale agreement title to property may be conveyed - Answer- to a minor for services performed in connection with a real estate transaction, the NJ broker who handled the transaction may give part of their commission to which of the following? a. a NJ attorney b. a salesperson employed by another broker c. the seller d. a licensed broker o another state for the referral - Answer- d. a licensed broker of another state for the referral to be licensed as a broker in NJ, you must a. be a resident of NJ b. be a citizen of the US c. be of legal age d. all of the above - Answer- c. be of legal age chad morgidge leases a commercial warehouse to Sollum Lee Sware for 2 years. which is true? a) the lease must be in writing b) the rights of morgidge and sware are regulated by the NJ "truth in renting" law c) the security deposit does not have to be places in an interest bearing account d) this is called a devise - Answer- c) the security deposit does not have to beplaces in an interest-bearing account according to the law of agency, - Answer- the principal must be competent according to the law of agency, - Answer- the principal must be competent two men own a parcel of land as joint tenants. one of them dies, and his will stipulates that his interest will pass to his wife, and upon her death, to his children. what type of estate do the children have? - Answer- no estate if the owners of a property sell it themselves, even though they have an exclusive agency listing with a broker, they owe the broker what? - Answer- no comission which of the following does NOT hold a leasehold estate? a. tenant for years b. life tenant c. tenant at will d. tenant at sufferance - Answer- d. tenant at sufferance a loan used for temporary financing is a a. VA loan b. FHA (203b) loan c. construction loan d. land contract - Answer- c. construction loan regulation Z requires the disclosure of which of the following? a. RESPA b. APR c. NAR d. CMA - Answer- b. APR (annual percentage rate) the lease that requires no advance notification to terminate it at the end of its term is called - Answer- estate for years the clause in a mortgage that provides for the entire balance of the mortgage loan to be immediately due and payable because of the borrowers default is called - Answer- acceleration clause the cost approach would most likely be used for which of the following? a. single family home b. apartment building c. public building d. office bulding - Answer- public building which of the following liens takes precedence over all the others? a. judgement against the seller b. purchase money mortgage taken by the seller c. delinquent special assessment charge d. first mortgage recorded by a bank - Answer- a. judgement against a seller if an owner in severalty dies testate (with a will), the property will be... - Answer- probated and passed on to the owners heirs according to the law of descent a court decree which declares that an individual is indebted to another and fixes the amount of the debt is called a a. bond b. lien c. judgement d. foreclosure - Answer- c. judgement the federal government will require disclosure in a property of the known presence of a. radon b. lead c. asbestos d. termites - Answer- lead when a purchaser buys subject to an existing mortgage, a. the seller is not personally liable for the note or bond b. the purchaser is not personally liable for the note or bond c. both the purachser and the seller are liable for the note and bond d. a new note or bond is drawn up - Answer- b. the purchaser is not personally liable for the note or bond compliance with the lead based paint hazard reduction act is important to real estate agents because its regulations specifically require real estate agents to - Answer- ensure compliance a purchaser buys a home for $102,000. she applies for an FHA mortgage loan and learns that the FHA will insure 97% of the first $25,000 of the purchase price and 95% of the balance. if the lender charges the purchaser 3 points, then how much cash will actually be advanced to the purchaser? - Answer- $96,320 the type of deed that warrants only that the grantor has not impaired the title during the term in which he held it is referred to as - Answer- bargain and sale deed, CAG a woman died and left a 10-acre piece of land to her brother. this is a - Answer- devise a bank insists on a $20,000 down payment to purchase a $100,000 home requires... - Answer- an 80% loan-to-value ratio an "in rem" proceeding is directly associated with a