PSI Real Estate Salesperson Examination I Questions and Answers

Which of the following would not be considered real property? - Answer- leasehold estate There servient estate in an easement appurtenant is the property: - Answer- on which the easement is placed Which of the following statements concerning encumbrances is NOT true: - Answer- All ecumbrances are liens Which of the following is not a specific lien? - Answer- State inheritance taxes You have to entered into a lease that requires you to pay 20 percent of the owner's expenses. Your lease would be an example of a: - Answer- net lease If a husband and wife own an apartment building and the husband owns an undivided three-fourths interest and the wife owns one-fourth interest, what type of tenancy exist? - Answer- Tenancy in common The highest form of ownership a person may hold in real estate is: - Answer- fee simple Two unrelated people own a three-unit apartment building as tenants in common. One wants to sell but the other does not. Which of the following statements describes the legal rights of the party who wants to sell? - Answer- The party may request a court to partition the building. Your aunt died intestate and you inherited her house. The way in which you acquired the title to her house is by: - Answer- descent Which of the following statements does NOT correctly describe a legal life estate? - Answer- During his or her life estate the life tenant is generally answerable to the holder of the future interest. Which of the following is NOT a leasehold estate: - Answer- Time-share estate You are married and own a house under a form of ownership that prohibits you from selling it without the signature of your spouse. Your form of ownership is LEAST likely to be: - Answer- in severalty A state wants to build an publicly owned convention center to attract private development in it's largest city. Can the state use eminent domain to acquire the land? - Answer- Yes, if compensation is paid to the owners of the land. Which of the following grants zoning authority to municipal government: - Answer- State enabling acts The city in which you live has a zoning ordinance. The basis for the city have such an ordinance is: - Answer- police power Which of the following terms are NOT related? - Answer- Police power-deed restriction Strict liability under Superfund means that: - Answer- the owner is responsible to the injured party without excuse. Which of the following does NOT correctly describe how real estate licensees should handle the possibility of hazardous substances on property being sold? - Answer- Licensees should not disclose the problem because it might harm the seller. Sources of groundwater contamination do NOT include: - Answer- radon Your neighbor has given you revocable permission to go hunting on his farm. You have a(n): - Answer- license A claim based on adverse possession of property must NOT be: - Answer- secretive A man gives his friend the right to go hunting on his property for just one day this is an example of: - Answer- a license A person who receives real property by will is called: - Answer- devisee Riparian rights would exist in a: - Answer- cooperative on a river A developer was able to buy two adjoining single-family lots for $20,000 each. He combined the lots into one parcel with a value of $90,000. The developer's action reflects the process of: - Answer- plottage A restaurant opened in a neighborhood and was enjoying substantial profits. Within a year another restaurant was built across the street and resulted in the first restaurant losing, in the next year, 30 percent of profits. This is an example of the principle of: - Answer- Competition A meatpacking plant has just been built one block from your house. The strong odors are lowering property values in your neighborhood. The loss in value would be classified as: - Answer- external obsolescence In the appraisal of a public building, an appraiser would use the: - Answer- cost approach A four-bedroom house with one bathroom would be an example of: - Answer- physical deterioration Which of the following is NOT a stage in the appraisal process? - Answer- Analyze the tax consequences of the property owner. An appraiser uses the cost approach in appraising a home. The appraiser should NOT use which of the following types of information? - Answer- Depreciation of land A house that is the least expensive in its neighborhood has nevertheless grown significantly in value over the years because of an increasing number of larger, more expensive houses being built nearby. This growth in value is an example of the principle of: - Answer- progression You are preparing a competitive market analysis on a house that you hope to list for sale. Which of the following approaches to value will be used in the development of the estimated value? - Answer- Sales comparison approach A competitive market analysis reflects the use of the: - Answer- sales-comparison approach Bank A holds a lien on a home on which Bank B already had lien. The lenders subsequently entered into an agreement in which Bank A moved into a first lien position. This is an example of a(n): - Answer- subordination agreement If the Federal Reserve Board raises its discount rate, which of the following is likely to occur? - Answer- Mortgage money will become less available You have a mortgage in which you make the same payment each month for the principal and interest, with the principal payment increasing and the interest payment decreasing from month-to-month this is called: - Answer- amortized mortgage Which agency is involved in purchasing government-related loans? - Answer- Ginnie Mae Which of the following agencies is NOT included in the secondary mortgage market? - Answer- FHA All loans subject To Real Estate Settlement Procedures Act (RESPA) require lenders to: - Answer- Deliver a Uniform Settlement Statement (HUD-1) form to both buyer and seller. You mortgaged your property and just made the final payment. Recording which of the following documents will provide notice that the mortgage lien has been removed? - Answer- Satisfaction of mortgage When a loan is subject to provisions of the Real Estate Settlement Procedures Act (RESPA), which of the following elements of real estate transaction need NOT observe RESPA guidelines? - Answer- The commission structure for licensees Regulations Z of the Truth-in Lending Act provides which of the following penalties for licensees who willfully fail to comply with its advertising guidelines for real estate financing? - Answer- Fines and/or imprisionment Salesperson A for broker B has listed a home Salesperson C for D is acting as a buyer's agent and trying to sell the same home to his buyer. Salesperson C is primarily responsible to: - Answer- Broker D In most states, the listing broker has a fiduciary duty with: - Answer- the client A broker was employed by an owner to sell her home. Which of the following statements does NOT correctly describe the brokers relationship to owner? - Answer- The broker is the general agent You are a licensee holding an open house on one of your listings. An old friend see the sign and stops in, and ultimately asks you to write an offer to purchase. At this point, without any discussions about agency is correct? - Answer- Your friend is your customer You listed a home that was subsequently shown by six cooperating outside brokers. How many seller-agency relationships are involved in this transaction? - Answer- One A salesperson listed a home for sale and transferred to another brokerage firm two weeks later. Which the of the following statements describes the status of the listing? - Answer- The listing will stay with the former broker A salesperson presented an offer that was accepted and received an earnest money payment for $2,000. The salesperson should: - Answer- give the earnest money to his broker You are working as a buyer's broker for a client. Which of the following would NOT describe your role as a buyer's broker? - Answer- You should show the buyer properties only in which your commission is protected. According to the law of agency, a real estate broker does NOT owe the principal the duty of: - Answer- offering legal advice A broker acting as the agent of a seller: - Answer- must report all offers to the principal unless instructed otherwise. A broker listed a residential property under a valid written listing agreement. After the sale was completed, the owner refused to pay the broker's fee. Which of the following can the broker do? - Answer- She can take the seller to court and sue for the commission. Commissions and fees paid by the seller to listing agency are determined by: - Answer- Negotiations between the seller and the listing licensee. A listing broker is MOST likely to have earned a commission from a principal when which of the following events occur? - Answer- A "ready, willing, and able buyer" signs a non contingent or cash offer that meets the terms of the listing contract. A broker listed an owner's home and later received an offer from another licensee that met all of the listing terms and conditions. After considering the offer, the owner informed the broker that the owner no longer wish to sell, and asked to be released from the listing agreement immediately. Which of the following is a TRUE statement about the broker's position in this situation? - Answer- The broker may succeed in collecting an earned commission from the owner. On July 1 an owner and salesperson entered into a six-month exclusive-right-to-sell agreement for a residential property. On July 15 the owner rejected a low offer and fired the listing agent. On august 1 there was a house fire that required extensive kitchen repairs. On September 12 the owner entered into another exclusive-right-to-sell agreement with a different agency. On January 1 the property was still unsold. On which date the first listing agreement MOST likely to terminate and why? - Answer- September 12, because the breached the first listing agreement by signing a second. An option, prior to being exercised, is an example of: - Answer- a unilateral contract Which of the following is the similarity between the exclusive-right-to-sell listing and exclusive-agency listing? - Answer- Both give the responsibility of representing the seller to just one broker. A buyer has entered into an agency agreement with more than one buyer's agent but only owes compensation to the one who puts an actual transaction together. This agreement is known as a(n): - Answer- nonexclusive agency agreement Which of the following clauses governs the right of a listing broker to collect a commission from an owner who waits until the listing period expires and personally contracts to sell the property to a party the broker had shown the property to during the listing period? - Answer- Protection