PSI Practice Exam Correctly Verified
A purchase contract required that the property be free of tenants when the
property conveyance occurred. On the day of closing, the tenants were still living in
the property. Who is responsible for ensuring that tenants vacated the property
prior closing? - Answer The Seller
A real estate broker enters into an agreement to represent a buyer who is
seeking a property to purchase, and remains a single agent throughout the
transaction. A seller with whom this broker negotiates is this broker's - Answer Customer
An investor has come to the broker because he may be interested in
selling one of his residential properties. His family has owned the eight
unit-building for several years and have kept accurate records of income
expenses. The investor brings out a file of lavish improvements that he
has completed inside each of the units, including granite counters, top of
the line appliances and marble floors. He has no idea what the property is
worth and has asked the broker to tell him what his potential profit will be
before he agrees to list it. In this situation what is most important for the
broker to explore before counseling the investors and putting his units on
the market? - Answer Explain that he will develop his opinion of valve by using the income approach and
that the investors may not be able to recover all the cost of his improvements
A broker has a listing agreement to deliver to his out-of-town. To property
secure this listing, the agreement - Answer May be in electronic format
Working to convince a potential buyer that a single-family house near a
university could be converted to student housing, a broker guarantees the
,buyer a substantial profit. Such a guarantee - Answer Constitutes failure to engage in competent
practice under the real estate
rules and regulations
A recently widowed farm owner has called a broker to list a one-acre building
site in order to raise the money to pay the property taxes. How should the broker
proceed? - Answer Contact the municipality to determine if this is possible, and then have a
surveyor prepare the description
A listing broker has recently sold a house to an investor. Prior to making an offer,
the investor told the broker he planned to turn the large property into apartments. It
was that had many multi-family properties. The buyer has now discovered that the
other properties are non-confirming, and that the area is zoned single family. The
broker: - Answer Should have advised the buyer to check the zoning in the area before
purchasing property
A real estate professional working with a buyer has disclosed the options for
representation under state law but has not signed a buyer representation agreement
and considers that buyer a customer. While showing the buyer a property, which of
the following statements by the professional could create implied agency in a
jurisdiction where the common law of agency prevails? - Answer "You should offer $20,000 less than the
asking price due to the repairs
needed on the property"
A seller is unhappy with the effort being put forth by the listing broker and
wishes toterminate the listing and relist with a different broker. How should the
broker advise the seller? - Answer Tell the seller to ask the listing broker to agree to terminate the
listing.
Agency is a bilateral relationship which may be terminated by mutual
agreement
, Seller A entered into an option contract with Buyer B. The contract allowed for
a price of $200,000 which Seller A will honor for a 12 month period exclusively
for Buyer B. This would be an example of a(n): - Answer Unilateral contract in which only Seller A has
made a promise to perform.
A broker hires an inactive broker to conduct open houses. Which of
the following statements about this situation is CORRECT? - Answer The broker may face disciplinary
action for incompetent practice
A property is listed at $450,000, and the prequalified buyer believes no
additional financing will be needed. The buyer is then notified the property is
encumbered with $30,000 mortgage. The buyer's agent advises his buyer to
assume equity by paying the $30,000 mortgage. The sales contract with no
mention of existing mortgage terms. The closing statement reflects the price of
the property at $450,000 with a credit for $30,000 mortgage. The deed to the
buyer was exempt and the loan did not fund. When the mortgage debt was
not paid, the mortgage foreclosed. Who is liable for the foreclosure? - Answer Buyer
A licensee representing a seller has which of the following duties? - Answer Advising the seller to obtain
advice about material
matter beyond the licensee's expertise
Which of the following is a feature of a quitclaim deed? - Answer It need not contain warranties
A broker has listed a property for $225,000. An offer of $210,000 contingent upon
inspection comes in the first week and the seller accepts it. Another offer of
$205,000 comes in the second week. The seller accepts it as a secondary offer
contingent upon the termination of the first offer. The first offeror demands the seller
spends $5,000 in repairs before going through with the purchase. The seller may do
A purchase contract required that the property be free of tenants when the
property conveyance occurred. On the day of closing, the tenants were still living in
the property. Who is responsible for ensuring that tenants vacated the property
prior closing? - Answer The Seller
A real estate broker enters into an agreement to represent a buyer who is
seeking a property to purchase, and remains a single agent throughout the
transaction. A seller with whom this broker negotiates is this broker's - Answer Customer
An investor has come to the broker because he may be interested in
selling one of his residential properties. His family has owned the eight
unit-building for several years and have kept accurate records of income
expenses. The investor brings out a file of lavish improvements that he
has completed inside each of the units, including granite counters, top of
the line appliances and marble floors. He has no idea what the property is
worth and has asked the broker to tell him what his potential profit will be
before he agrees to list it. In this situation what is most important for the
broker to explore before counseling the investors and putting his units on
the market? - Answer Explain that he will develop his opinion of valve by using the income approach and
that the investors may not be able to recover all the cost of his improvements
A broker has a listing agreement to deliver to his out-of-town. To property
secure this listing, the agreement - Answer May be in electronic format
Working to convince a potential buyer that a single-family house near a
university could be converted to student housing, a broker guarantees the
,buyer a substantial profit. Such a guarantee - Answer Constitutes failure to engage in competent
practice under the real estate
rules and regulations
A recently widowed farm owner has called a broker to list a one-acre building
site in order to raise the money to pay the property taxes. How should the broker
proceed? - Answer Contact the municipality to determine if this is possible, and then have a
surveyor prepare the description
A listing broker has recently sold a house to an investor. Prior to making an offer,
the investor told the broker he planned to turn the large property into apartments. It
was that had many multi-family properties. The buyer has now discovered that the
other properties are non-confirming, and that the area is zoned single family. The
broker: - Answer Should have advised the buyer to check the zoning in the area before
purchasing property
A real estate professional working with a buyer has disclosed the options for
representation under state law but has not signed a buyer representation agreement
and considers that buyer a customer. While showing the buyer a property, which of
the following statements by the professional could create implied agency in a
jurisdiction where the common law of agency prevails? - Answer "You should offer $20,000 less than the
asking price due to the repairs
needed on the property"
A seller is unhappy with the effort being put forth by the listing broker and
wishes toterminate the listing and relist with a different broker. How should the
broker advise the seller? - Answer Tell the seller to ask the listing broker to agree to terminate the
listing.
Agency is a bilateral relationship which may be terminated by mutual
agreement
, Seller A entered into an option contract with Buyer B. The contract allowed for
a price of $200,000 which Seller A will honor for a 12 month period exclusively
for Buyer B. This would be an example of a(n): - Answer Unilateral contract in which only Seller A has
made a promise to perform.
A broker hires an inactive broker to conduct open houses. Which of
the following statements about this situation is CORRECT? - Answer The broker may face disciplinary
action for incompetent practice
A property is listed at $450,000, and the prequalified buyer believes no
additional financing will be needed. The buyer is then notified the property is
encumbered with $30,000 mortgage. The buyer's agent advises his buyer to
assume equity by paying the $30,000 mortgage. The sales contract with no
mention of existing mortgage terms. The closing statement reflects the price of
the property at $450,000 with a credit for $30,000 mortgage. The deed to the
buyer was exempt and the loan did not fund. When the mortgage debt was
not paid, the mortgage foreclosed. Who is liable for the foreclosure? - Answer Buyer
A licensee representing a seller has which of the following duties? - Answer Advising the seller to obtain
advice about material
matter beyond the licensee's expertise
Which of the following is a feature of a quitclaim deed? - Answer It need not contain warranties
A broker has listed a property for $225,000. An offer of $210,000 contingent upon
inspection comes in the first week and the seller accepts it. Another offer of
$205,000 comes in the second week. The seller accepts it as a secondary offer
contingent upon the termination of the first offer. The first offeror demands the seller
spends $5,000 in repairs before going through with the purchase. The seller may do
