OK PSI EXAM REVIEW QUESTIONS AND ANSWERS SURE
A+
✔✔A Buyer had a contingency in a purchase contract to sell the Buyer's house in 120
days. On day 121, the Seller informed the Buyer the Seller would keep the Earnest
Money but sell the house to another Buyer. What did the original Buyer violate? -
✔✔Time is of the Essence
✔✔The Buyer and Seller execute a purchase contract for $127,000. Five days later, the
Buyer asks the Seller to increase the sales price to $129,730.50 to cover a funding fee.
What is this to the contract? - ✔✔Amendment
✔✔Once an agreement of sale is signed, the purchaser has - ✔✔equitable title
✔✔The Buyer pays the Seller $5000 to purchase within 120 days an apartment building
containing 18 units. This action is an - ✔✔option
✔✔Which of the following is the best explanation of an option? - ✔✔An agreement
granting exclusive right to buy, sell, or lease property at a given price within a stated
period of time
✔✔If a purchaser signs a contract under duress, it is generally - ✔✔voidable by the
buyer
✔✔A person who has secured the right to purchase a property at a fixed price for a
designated period of time and has paid a consideration for this privilege would own an -
✔✔option
✔✔If a seller makes any changes in an offer from a buyer prior to acceptance, the buyer
- ✔✔is relieved of the original offer
✔✔When is an offer to purchase property "accepted"? - ✔✔The Seller accepts, and the
signed contract is delivered to the Buyer
✔✔Allison and Barbara signed a contract that was based on illegal consideration, this
contract is - ✔✔Void
✔✔Amy coerces Bill to enter into a contract with him. This contract is generally -
✔✔Voidable by Bill
✔✔While a property is under a contract for deed, the buyer, or vendee, takes
possession of the property and makes timely payments of principal and interest. At the
end of the term, the vendee obtains a loan and uses the funds to pay off the vendor.
,Given these circumstances, what option does the seller have? - ✔✔He may offer to
repurchase the property after conveying the title
✔✔In completion of a printed form of the sales contract, several words were crossed out
and others inserted. In order to eliminate future controversy as to whether the changes
were made before or after the contract was signed, the broker should do which of the
following? - ✔✔Have both parties initial or sign on the margin near each change
✔✔Which of the following Secondary Mortgage Market entities can purchase FHA and
VA loans? - ✔✔Frannie Mae, Ginnie Mae, Freddie Mac
✔✔Albert has a mortgage on his home. The clause in Albert's mortgage which calls the
entire balance of his mortgage immediately due if his home is sold is called - ✔✔the
alienation clause
✔✔A release clause in a mortgage - ✔✔allows portions of the property given as security
to be released from the mortgage lien upon performance of specified acts
✔✔Allan has just made the final payment on his mortgage loan to the bank. Regardless
of this fact, the bank will still hold a lien on Allan's property until which of the following is
recorded? - ✔✔Satisfaction of the mortgage instrument
✔✔All of the following advertising statements are unacceptable under Truth-in-Lending,
except - ✔✔liberal terms available
✔✔Which statement is true regarding FHA loans? - ✔✔FHA insures approved lenders
✔✔An important function of the secondary mortgage market is to - ✔✔sell mortgage-
backed securities in order to buy pools of loans
✔✔Allen who is a lender wishes to make the yield on a loan lower than the current
market value. What would Allen charge to make the loan more competitive? -
✔✔Discount Points
✔✔Which agency investigates Mortgage Fraud? - ✔✔FBI
✔✔Which of the following best describes Regulation Z? - ✔✔Disclosure of credit
charges
✔✔Of the following sources of loan money, which does not service their loans? -
✔✔Mortgage Broker
,✔✔The Veterans Administration assists numerous qualified mortgage loan applicants
because it - ✔✔guarantees loans made by approved lenders
✔✔This loan type is characterized by equal monthly payments credited first to interest
due. Then, the remainder of the payment is applied to the loan balance - ✔✔Amortized
Loan
✔✔If an area containing a service station were changed to residential zoning, the
service station - ✔✔is a non-conforming use
✔✔A gated community has a restrictive covenant that dictates fences can be no taller
than 5 feet. The city code states a max height of 6 feet. A homeowner in the community
builds a 6-foot high fence. The Board of Director's sue. What is the Court's ruling? -
✔✔The restrictive covenant takes precedence because it is more restrictive
✔✔The Ad reads, "Your new home has the most stunning view in the county." Is there a
problem? - ✔✔No. This is puffing.
✔✔A broker has a listing contract on a vacant house. It has taken longer to sell than
anticipated. The broker hires a lawn company to mow. Who owes the mower? - ✔✔The
Broker
✔✔Which of the following is NOT a type of possible Agency Relationship in a
transaction unless all parties acknowledge the relationship? - ✔✔Dual Agency
✔✔A buyer representative locates a suitable property through an owner broker. The
buyer buys the property; the seller pays a commission and the two agents split the
commission. In this instance, the owner broker is acting as - ✔✔a single agent for the
owner
✔✔A sales associate lists a property. Three weeks later, the sales associate os
tragically killed on the way to show the property. What is the status of the Listing
Contract? - ✔✔Agency remains unaltered
✔✔When a realtor and a seller sign a listing contract, the broker becomes - ✔✔special
agent
✔✔Under a special agency agreement, a broker is not authorized to - ✔✔execute a
contract for sale agreement
✔✔A Buyer inquires to the Listing Broker (who reps the seller) why the seller is selling
and what is the lowest price the seller would accept. The listing broker should - ✔✔not
answer the questions as loyalty to the seller
, ✔✔A realtor goes through the entire transaction with a Buyer w/o signing a contract to
represent the buyer. Is this legal; and if so, what type of agency exists? - ✔✔Yes
Implied Agency
✔✔Real estate brokers authorized to conduct a single transaction for their principals are
usually classed as - ✔✔special agents
✔✔A seller and a broker signed a contract to market a house. After 63 days on the
market, the seller called the broker to say, "Thanks," but the seller had found a buyer.
What kind of listing is this? - ✔✔Exclusive Agency Listing
✔✔An agent fails to discover crumbling tiles on the basement ceiling beneath a
bathroom. The agent sells the property, and the buyer later sues the agent for not
discovering and disclosing a clearly visible and obvious problem. In this case, the agent
- ✔✔has an exposure to negligent misrepresentation
✔✔What is the primary aim of a marketing program for a managed property? - ✔✔To
find and attract the right kind of tenants
✔✔The most common kind of landlord default is - ✔✔failure to maintain the property
and provide services
✔✔How does the ECOA affect property managers? - ✔✔Managers must be consistent
and nondiscriminatory in evaluating the creditworthiness of tenant applicants
✔✔Typically before a mortgage company will finance a home they will want to make
sure there are no encroachments on the property they are financing. To check for any
encroachments the mortgage company should order a - ✔✔survey
✔✔A toxic waste dump is located at the edge of town. What federal legislation would
force the clean up of this area? - ✔✔CERCLA
✔✔Which of the following is NOT a latent defect? - ✔✔A crack in the living room ceiling
✔✔Any agreement between two or more brokers in competition with one another to fix,
control, regulate, increase, decrease or stabilize fees, rates, commissions or other
prices - ✔✔is price fixing, illegal, and cannot be defended on any grounds
✔✔Unintentional misrepresentation is generally considered - ✔✔less serious than
intentional fraud but still a violation to be punished
A+
✔✔A Buyer had a contingency in a purchase contract to sell the Buyer's house in 120
days. On day 121, the Seller informed the Buyer the Seller would keep the Earnest
Money but sell the house to another Buyer. What did the original Buyer violate? -
✔✔Time is of the Essence
✔✔The Buyer and Seller execute a purchase contract for $127,000. Five days later, the
Buyer asks the Seller to increase the sales price to $129,730.50 to cover a funding fee.
What is this to the contract? - ✔✔Amendment
✔✔Once an agreement of sale is signed, the purchaser has - ✔✔equitable title
✔✔The Buyer pays the Seller $5000 to purchase within 120 days an apartment building
containing 18 units. This action is an - ✔✔option
✔✔Which of the following is the best explanation of an option? - ✔✔An agreement
granting exclusive right to buy, sell, or lease property at a given price within a stated
period of time
✔✔If a purchaser signs a contract under duress, it is generally - ✔✔voidable by the
buyer
✔✔A person who has secured the right to purchase a property at a fixed price for a
designated period of time and has paid a consideration for this privilege would own an -
✔✔option
✔✔If a seller makes any changes in an offer from a buyer prior to acceptance, the buyer
- ✔✔is relieved of the original offer
✔✔When is an offer to purchase property "accepted"? - ✔✔The Seller accepts, and the
signed contract is delivered to the Buyer
✔✔Allison and Barbara signed a contract that was based on illegal consideration, this
contract is - ✔✔Void
✔✔Amy coerces Bill to enter into a contract with him. This contract is generally -
✔✔Voidable by Bill
✔✔While a property is under a contract for deed, the buyer, or vendee, takes
possession of the property and makes timely payments of principal and interest. At the
end of the term, the vendee obtains a loan and uses the funds to pay off the vendor.
,Given these circumstances, what option does the seller have? - ✔✔He may offer to
repurchase the property after conveying the title
✔✔In completion of a printed form of the sales contract, several words were crossed out
and others inserted. In order to eliminate future controversy as to whether the changes
were made before or after the contract was signed, the broker should do which of the
following? - ✔✔Have both parties initial or sign on the margin near each change
✔✔Which of the following Secondary Mortgage Market entities can purchase FHA and
VA loans? - ✔✔Frannie Mae, Ginnie Mae, Freddie Mac
✔✔Albert has a mortgage on his home. The clause in Albert's mortgage which calls the
entire balance of his mortgage immediately due if his home is sold is called - ✔✔the
alienation clause
✔✔A release clause in a mortgage - ✔✔allows portions of the property given as security
to be released from the mortgage lien upon performance of specified acts
✔✔Allan has just made the final payment on his mortgage loan to the bank. Regardless
of this fact, the bank will still hold a lien on Allan's property until which of the following is
recorded? - ✔✔Satisfaction of the mortgage instrument
✔✔All of the following advertising statements are unacceptable under Truth-in-Lending,
except - ✔✔liberal terms available
✔✔Which statement is true regarding FHA loans? - ✔✔FHA insures approved lenders
✔✔An important function of the secondary mortgage market is to - ✔✔sell mortgage-
backed securities in order to buy pools of loans
✔✔Allen who is a lender wishes to make the yield on a loan lower than the current
market value. What would Allen charge to make the loan more competitive? -
✔✔Discount Points
✔✔Which agency investigates Mortgage Fraud? - ✔✔FBI
✔✔Which of the following best describes Regulation Z? - ✔✔Disclosure of credit
charges
✔✔Of the following sources of loan money, which does not service their loans? -
✔✔Mortgage Broker
,✔✔The Veterans Administration assists numerous qualified mortgage loan applicants
because it - ✔✔guarantees loans made by approved lenders
✔✔This loan type is characterized by equal monthly payments credited first to interest
due. Then, the remainder of the payment is applied to the loan balance - ✔✔Amortized
Loan
✔✔If an area containing a service station were changed to residential zoning, the
service station - ✔✔is a non-conforming use
✔✔A gated community has a restrictive covenant that dictates fences can be no taller
than 5 feet. The city code states a max height of 6 feet. A homeowner in the community
builds a 6-foot high fence. The Board of Director's sue. What is the Court's ruling? -
✔✔The restrictive covenant takes precedence because it is more restrictive
✔✔The Ad reads, "Your new home has the most stunning view in the county." Is there a
problem? - ✔✔No. This is puffing.
✔✔A broker has a listing contract on a vacant house. It has taken longer to sell than
anticipated. The broker hires a lawn company to mow. Who owes the mower? - ✔✔The
Broker
✔✔Which of the following is NOT a type of possible Agency Relationship in a
transaction unless all parties acknowledge the relationship? - ✔✔Dual Agency
✔✔A buyer representative locates a suitable property through an owner broker. The
buyer buys the property; the seller pays a commission and the two agents split the
commission. In this instance, the owner broker is acting as - ✔✔a single agent for the
owner
✔✔A sales associate lists a property. Three weeks later, the sales associate os
tragically killed on the way to show the property. What is the status of the Listing
Contract? - ✔✔Agency remains unaltered
✔✔When a realtor and a seller sign a listing contract, the broker becomes - ✔✔special
agent
✔✔Under a special agency agreement, a broker is not authorized to - ✔✔execute a
contract for sale agreement
✔✔A Buyer inquires to the Listing Broker (who reps the seller) why the seller is selling
and what is the lowest price the seller would accept. The listing broker should - ✔✔not
answer the questions as loyalty to the seller
, ✔✔A realtor goes through the entire transaction with a Buyer w/o signing a contract to
represent the buyer. Is this legal; and if so, what type of agency exists? - ✔✔Yes
Implied Agency
✔✔Real estate brokers authorized to conduct a single transaction for their principals are
usually classed as - ✔✔special agents
✔✔A seller and a broker signed a contract to market a house. After 63 days on the
market, the seller called the broker to say, "Thanks," but the seller had found a buyer.
What kind of listing is this? - ✔✔Exclusive Agency Listing
✔✔An agent fails to discover crumbling tiles on the basement ceiling beneath a
bathroom. The agent sells the property, and the buyer later sues the agent for not
discovering and disclosing a clearly visible and obvious problem. In this case, the agent
- ✔✔has an exposure to negligent misrepresentation
✔✔What is the primary aim of a marketing program for a managed property? - ✔✔To
find and attract the right kind of tenants
✔✔The most common kind of landlord default is - ✔✔failure to maintain the property
and provide services
✔✔How does the ECOA affect property managers? - ✔✔Managers must be consistent
and nondiscriminatory in evaluating the creditworthiness of tenant applicants
✔✔Typically before a mortgage company will finance a home they will want to make
sure there are no encroachments on the property they are financing. To check for any
encroachments the mortgage company should order a - ✔✔survey
✔✔A toxic waste dump is located at the edge of town. What federal legislation would
force the clean up of this area? - ✔✔CERCLA
✔✔Which of the following is NOT a latent defect? - ✔✔A crack in the living room ceiling
✔✔Any agreement between two or more brokers in competition with one another to fix,
control, regulate, increase, decrease or stabilize fees, rates, commissions or other
prices - ✔✔is price fixing, illegal, and cannot be defended on any grounds
✔✔Unintentional misrepresentation is generally considered - ✔✔less serious than
intentional fraud but still a violation to be punished
