PSI NJ Real Estate Exam, PSI Practice Test Correct 100%

Water Rights - Answer The terms "littoral," "riparian," and "appropriative" refer to A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is - Answer an agent to the broker and a subagent to the principal. Depreciation is calculated based on the - Answer Cost of the building only. When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the - Answer mortgagor A competitive market analysis is MOST often used for - Answer setting a listing price 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 - Answer tell the seller not to disclose, because the statute of limitations has run out. All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the - Answer straight-line method The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing? - Answer Credit buyer $110,000; debit seller $110,000. If conditions for purchase are included in a deed and these conditions are violated, what is the penalty? - Answer Return of the property to the original owner. The purpose of requiring an earnest money deposit in a real estate sales contract is to - Answer provide evidence of the buyer's intention to carry out the contract. A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given - Answer constructive notice What type of map is MOST useful for describing the terrain of a very hilly lot? - Answer contour map The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA, - Answer Require the buyer to acknowledge disclosure of the presence of any known lead paint. At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should - Answer tell potential buyers about the parties. (Any social information expressed to an agent can be shared) A major reason for buying and owning a condominium rather than a detached single-family home is that - Answer a condominium tends to be more affordable. A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have? - Answer The buyer may sue the seller for specific performance. A loan which requires the borrower to pay interest only until the maturity date (or due date), and then to pay the entire principal on the maturity date, is called a - Answer straight (term) loan (AKA term loan) The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of - Answer Impossibility of performance. - - (Key word: *Unlicensed* whiskey sales operation). A broker lists a property, with a listing contract allowing subagency and dual agency. One of the broker's salespersons shows the property. The salesperson would be classified as - Answer a subagent of the seller. — (Think - brokerage is the AGENCY, salesperson is working under the agency) The relationship in which the agent is placed in the position of trust and confidence to the principal is known by the term - Answer fiduciary An agreement to purchase that has NOT yet closed is - Answer an executory contract. When compiling a competitive market analysis, a broker would look for comparable properties that - Answer were located near the property being listed. The power vested in the government to establish legislation to preserve order, protect the public health and safety, and promote the general welfare is known as - Answer police power If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 8-1/2%, how large a loan (rounded to the nearest $100) can this buyer afford? (BE SURE TO USE THE AMORTIZATION TABLE.) - Answer $130,000 An Environmental Impact Statement (EIS) - Answer projects the impact on the environment of a proposed project. In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers? - Answer One A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if - Answer the owner withdraws the counteroffer before it is accepted. Antitrust laws prohibit competing brokers from all of the following EXCEPT - Answer receiving compensation from both the buyer and the seller. 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 - Answer misrepresentation The sellers have agreed to give the buyers an allowance of $16.95 per square yard to retile the kitchen. If the kitchen is 10 feet x 14 feet, how much will it cost the sellers (to the nearest dollar)? - Answer $264 Three identical homes in a neighborhood were listed at the same time in a market where demand was constant. According to the law of supply and demand, which would have sold for the lowest price? - Answer the first sold Which of the following is the first action to take when mold problems are found? - Answer Identify and remedy the cause of the problems. A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to - Answer demand immediate payment of the entire note. A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1/2% or for 30 years at 6 1/2%. To the nearest cent, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.) - Answer $409.20 A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes maintenance of value over profitability? - Answer An individual entrepreneur who owns several apartment buildings. A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called - Answer a contract Errors and Omissions insurance covers the broker for - Answer Unintentional misrepresentation An example of a contract terminated due to inability to perform would be one in which the - Answer seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant. According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the... - Answer cash price or amount of the loan, amount of down payment required and number, amount, and frequency of payments. DO NOT NEED TO INCLUDE PREPAYMENT PENALTIES AND REBATES. A deed restriction is applicable to the activities of - Answer present and future owners. In MOST states, foreclosed property is sold through - Answer Public Auction A tenant rented an apartment, signing a 15-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have? - Answer tenancy at will When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential? - Answer The original cost of the building. Which of these Federal laws regulates the advertisement of a lender's credit terms (rates, payment, etc.)? - Answer Regulation Z A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of - Answer anticipation