PSI National Exam for Real Estate Exam Study Questions and Answers Graded A 2024

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called - a contract Antitrust laws prohibit competing brokers from all of the following - 1. boycotting other brokers in the marketplace. 2. dividing the market to restrict competition. 3. agreeing to set sales commissions and management rates. When a sewer line is installed down a rural road, the cost will probably be shared by - all current owners of real estate fronting on that road State laws differ on whether a buyer is entitled to know about - a suicide that occurred in the house last year. A lawsuit for inverse condemnation may be brought by - a homeowner When is racial discrimination in the rental of rooms or apartments permitted? - Under no circumstances The real estate broker who is listing a house for sale should personally verify - the number of square feet in the building Real property can be converted to personal property by - Severance Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE? - Both contracts are valid Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of - prior appropriation The purpose of requiring an earnest money deposit in a real estate sales contract is to - provide evidence of the buyer's intention to carry out the contract. 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.) - $409.20. A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to - demand immediate payment of the entire note The FHA functions MOST like - an insurance company 1. They are used to buy down interest rate. 2. They are a function of the marketplace. 3. They are paid by either the buyer or the seller. - discount points When land is conveyed to a trustee, the trustee may - do whatever is permitted under the trust agreement 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 - the owner withdraws the counteroffer before it is accepted. While an agent is showing a listed property, the seller and the buyer enter into an oral agreement for the purchase of the home. If a dispute over the terms arises later, the agreement may be unenforceable because - the agreement does not comply with the Statute of Frauds Earnest money should be deposited into a trust account - in a timely manner, according to state laws A deed restriction is applicable to the activities of - all owners, present and future An easement can be terminated by - prescription Depreciation is calculated based on the - cost of the building only Which of the following approaches MOST reliably estimates the sales price of a single-family residence? - Market data A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property? - Seller The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to - IRS A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship? - Agency coupled with an interest If you own a building free and clear that is worth $115,000 and want an annual return of 12%, what net income is needed each month? - $1,150 Usury laws were enacted to protect the - borrower 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 - tell potential buyers about the parties When one of the parties to an agreement fails to perform one of its conditions, that contract is deemed to be - breached Which of the following is NOT a consideration in the definition of market value? - Buyer and seller must agree to appraised value One common method for controlling the problems created by conflict of interest in dual representation is - allowing a broker to designate separate salespeople within the company as legal representatives of each of the clients. Ownership of common stock in a corporation gives - an interest that is classified as personal property At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing? - Debit seller $300; credit buyer $300 Too much leverage may result in - negative cash flow A major reason for buying and owning a condominium rather than a detached single-family home is that - a condominium tends to be more affordable An adjustable rate loan should include all of the following elements - 1. margin