PSI REAL ESTATE TEST BANK UPDATED
QUESTIONS AND CORRECT ANSWERS FULL
SOLUTION
●● An escheat occurs when
Answer: a property owner dies without heirs or a valid will
●● State laws differ on whether a buyer is entitled to know about
Answer: a suicide that occurred in the house last year.
●● A charge of violation of Federal Fair Housing laws can be heard by
an administrative law judge within the Department of Housing and
Urban Development (HUD) or by a Federal district court judge in
Federal court. The advantage of a Federal court hearing to the
complaining party is that
Answer: there is no dollar limit on damages paid.
●● An agency relationship between a property owner and a property
manager is usually created by
Answer: a management agreement.
●● An exception to title insurance coverage is
Answer: defects that clearly appear in the title search.
,●● On February 1, a seller paid $1,140 in annual property tax for the
current calendar year. He sold the house with the closing set for April 1.
What will be the seller's credit for the property taxes already paid if the
buyer pays for the day of closing? Use a 360-day year and a 30-day
month.
Answer: $288
●● 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.
●● If all other factors are equal, in which location is a parking lot likely
to bring the highest sales price?
Answer: Business district zoned for a six-story office building.
●● In helping a buyer to select a lender, if the buyer believes he has
good credit and his income is documentable as a salary and by tax
returns, the licensee might recommend a mortgage banker, instead of a
mortgage broker, for all of the following reasons EXCEPT
Answer: more variety of loan programs available.
, ●● A broker, acting as agent for the seller, presents an offer to buy from
the broker's former college roommate. The broker knows that the buyer
will increase the amount of the offer if the seller turns down the offer.
When presenting the offer, the broker should
Answer: tell the seller that the buyer will pay more.
●● A contract for the sale of a home has been signed by both parties.
This contract will remain executory until
Answer: the transaction has closed.
●● A couple are moving to a new city. They have decided to rent
temporarily before buying a house to see which part of the city they
would like to live in. What type of lease would BEST suit the couple's
needs?
Answer: Month-to-month lease.
●● Antitrust laws prohibit competing brokers from all of the following
EXCEPT
Answer: receiving compensation from both the buyer and the seller.
●● Salesperson Susan was at the local coffee shop with some agents
from other offices. The subject of commissions came up, and agents
began to compare their commission rates. Susan should
Answer: advise her friends this could constitute a violation of Sherman
Antitrust Act.
QUESTIONS AND CORRECT ANSWERS FULL
SOLUTION
●● An escheat occurs when
Answer: a property owner dies without heirs or a valid will
●● State laws differ on whether a buyer is entitled to know about
Answer: a suicide that occurred in the house last year.
●● A charge of violation of Federal Fair Housing laws can be heard by
an administrative law judge within the Department of Housing and
Urban Development (HUD) or by a Federal district court judge in
Federal court. The advantage of a Federal court hearing to the
complaining party is that
Answer: there is no dollar limit on damages paid.
●● An agency relationship between a property owner and a property
manager is usually created by
Answer: a management agreement.
●● An exception to title insurance coverage is
Answer: defects that clearly appear in the title search.
,●● On February 1, a seller paid $1,140 in annual property tax for the
current calendar year. He sold the house with the closing set for April 1.
What will be the seller's credit for the property taxes already paid if the
buyer pays for the day of closing? Use a 360-day year and a 30-day
month.
Answer: $288
●● 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.
●● If all other factors are equal, in which location is a parking lot likely
to bring the highest sales price?
Answer: Business district zoned for a six-story office building.
●● In helping a buyer to select a lender, if the buyer believes he has
good credit and his income is documentable as a salary and by tax
returns, the licensee might recommend a mortgage banker, instead of a
mortgage broker, for all of the following reasons EXCEPT
Answer: more variety of loan programs available.
, ●● A broker, acting as agent for the seller, presents an offer to buy from
the broker's former college roommate. The broker knows that the buyer
will increase the amount of the offer if the seller turns down the offer.
When presenting the offer, the broker should
Answer: tell the seller that the buyer will pay more.
●● A contract for the sale of a home has been signed by both parties.
This contract will remain executory until
Answer: the transaction has closed.
●● A couple are moving to a new city. They have decided to rent
temporarily before buying a house to see which part of the city they
would like to live in. What type of lease would BEST suit the couple's
needs?
Answer: Month-to-month lease.
●● Antitrust laws prohibit competing brokers from all of the following
EXCEPT
Answer: receiving compensation from both the buyer and the seller.
●● Salesperson Susan was at the local coffee shop with some agents
from other offices. The subject of commissions came up, and agents
began to compare their commission rates. Susan should
Answer: advise her friends this could constitute a violation of Sherman
Antitrust Act.
