PSI Salesperson Real Estate Practice Exam 1 (national)

The ownership of property by one person only is known as - Answer- severalty If a non married group buy a house together but want one to become a full owner after death, the deed must state that they are - Answer- JTWROS Widowed sisters are buying a home together. To ensure that if one dies her share will go to her children, they should purchase the house as - Answer- tenants in common An article of personal property that is permanently attached and becomes part of the real estate is known as - Answer- Fixture All of the following are approaches that an appraiser may use to establish value EXCEPT - Answer- Market Comparison, Cost Approach, or Income Approach (Tax assessment approach) In order to reach the lake the browns have a permanent right of way across their neighbors property. This is an - Answer- easement appurtenant Express Covenants that protect the grantee are found in a - Answer- Warranty Deed A subdivision has a restriction requiring houses to be at lease 2,000 sq ft. The town has no such restriction and gives the smiths a building permit for a smaller houses in the subdivision. If the neighbors object, the neighbors best course of action would be to - Answer- ask court to prevent the construction or demand expansion to the requirement Smith is buying an abandoned church as an investment for future development. His appraisor will use which of the following appraisal approaches to determine the best value? - income approach - cost approach - market approach - Answer- (Cost Approach) When pete makes statements about the quality or condition of his property that a reasonable person would recognize as non factual or extravagant his actions are? - Answer- Puffing is not illegal or fraudulent. Difference between the market value of a property and the sum of liens against it is called? - Answer- Equity Acre in sq ft - Answer- 43,560 sq ft House has 4 bed one bath. When the house is sold and an appraiser uses the cost approach to value, what kind of depreciation would the appraiser use in considering value? -Physical Deterioration -Economic obs - functional obs - exterior obs? - Answer- (Physical Deterioration) Physical description of the property that includes intersections of streets and distances from landmarks are referred to as? - Answer- Metes and bounds Title insurance protects the owner or lender against unexpected claims arising from? - Answer- Past forged documents An abstract of title contains? - Answer- the summary of a title search With regard to electromagnetic fields which of the following statements is true? - Answer- the successful lawsuits involving EMFs have been for causing stigma Agency is the act of representing someone in the purchase, sale, or lease of a property. Sub-agency is the act of representing: -A principal who is represented by an agent -A department of the federal government -A lending institution -An anonymous purchaser - Answer- A principal who is represented by an agent Mary is the listing agent for the Greens Property. She has been approached by Jack to prepare for an offer to purchase the property. Jack does not have his own buyer agent. Jacks relationship to mary is that of a - Answer- customer When describing the particulars of a property, the agent does not disclose that a capital improvement project has been approved that will result in a special assessment to the owner in the near future. The broker has? - Answer- failed to provide proper disclosure as is required by law To be legally entitled to a commission related to a real estate transaction the agent must be all of the following EXCEPT -Licensed - authorized to be involved in the marketing effort - the procuring cause of the transaction - under contract to the buyer or seller - Answer- the procuring cause of the transaction A listing agent would be required to disclose all of the following EXCEPT -the seller is facing bankruptcy if the house does not sell quickly - the listing agent is the sellers mother - furnace is leaking carbon monoxide - the house was built before 1978 and may have lead based paint - Answer- the seller is facing bankruptcy if the house does not sell quickly A broker lists a property for sale. As time goes by it is evident that the property is not very desirable. The broker and partner observe that, with a zoning variance and a modest remodel the character of the property could be changed to make it more valuable and salable. The partner purchases the property without revealing the pan to the seller of identifying his relationship with the broker. which of the following is true of this transaction? - Answer- The business relationship between the broker and buyer should have been disclosed. A seller anxious to sell tells a cooperating agent that she will give the agent a lawnmower if he brings acceptable offer by the end of the week. All of the following are true of this situation EXCEPT - The agent may accept the offer because it is not cash - the agent should report the incident to the listing broker - the agent would be in violation of the law if he took the lawnmower - the cooperating agent could legally receive the lawnmower from the broker - Answer- The agent may accept the offer bc it is not cash Within the agency agreement is a statement that binds the buyer to paying the broker's fee if, within a stated number of days, the buyer purchases a property that was shown to the buyer during the agency period. This clause is called the: -Broker protection clause -Automatic extension clause -Limited coverage clause -Buyer liability clause - Answer- Broker protection clause Any qualified person wishing to obtain a mortgage loan for the purchase of a home may obtain any of the following types of loans except a - Answer- Reverse Equity mortgage A farmers market had been in operation continuously for 50 years at the intersection of 50 and 29. A new master plan approved by local jurisdiction placed that tract of land in a residential zone. In order to stay in business the owner should - Answer- Keep the business going WITHOUT modification (Grandfathered probably) A commercial investment property has a tax liability when the - income is exceeded by expenses - gross income exceeds debt service - income exceeds depreciation and expenses - income exceeds depreciation and debt service - Answer- income exceeds depreciation and expenses The Comprehensive environmental response cleanup and LIability act (CERCLA) establishes the potential responsibility of parties who are liable for the cleanup of toxic contaminated sites. Which of the following is a responsible party? - operator of toxic waste site - previous owner of TW - current owner of TW - all - Answer- All of the above joint and several Commingling is - Answer- Mixing funds held for other persons property with own money The webers own three pieces of real estate: house, lakeside cottage, and tract of land. which of the following expenses may be deducted for all three properties on the webers income tax return? - mortgage interest -insurance premium -property taxes - both mortgage interest and property taxes - Answer- Property taxes Minimum standards for materials and construction are set by - state law - federal law - zoning law -building code - Answer- Building Code In most states no property tax is levied on land belonging to - Answer- Churches When a real estate broker is involved the federal fair housing laws are applicable in all of the following transactions EXCEPT - leasing space in an office tower - leasing space in a residential condominium tower - leasing space in a residential cooperative tower building - renting one half of a residential duplex - Answer- office tower Maud is selling a house she bought in 1960. What should she be required to disclose? - Answer- Mold Asbestos and Radon Someone feels discriminated against in the attempt to buy or lease a home could seek which of the following remedies? - file a complaint with the HUD (department of housing and urban development - file a complaint with the us attorney general - file a court action directly in a us district court or state or local court - all - Answer- all of the above Zoning Laws may be imposed by -large real estate developers - federal government - - any property owner - Answer- ??? Samantha goes to a bank and borrows money for the purchase of her first home, thereby becoming a - Answer- mortgagor A building permit may be issued without question even if it violates existing -zoning laws -building codes -setback requirements or -deed restrictions - Answer- deed restrictions If a person dies leaving no will and no natural heirs his or her property passes to - Answer- the state (intestacy) APR stands for - Answer- Annual Percentage Rate Zoning laws - Answer- tell landowners the use to which they may put their land Anna rents a small building for her boutique. In addition to rent she also pays property taxes, utility bills, and insurance. She has - Answer- Net Lease One example of a periodic estate is - Answer- month to month tenancy Barry represents sally who is buying her first home. In his zeal to make the best deal for his client Barry includes in the contract that sally will have the right to cancel if she cannot secure financing. IS this permissible - Answer- Yes this is a business item not a legal issue. Unique or special purpose buildings like a church or school are best valued given most weight to - Answer- Cost approach Economic or external obsolescence refers to loss of value due to - wear and tear -outdated design - loss of value due to factors beyond property boundaries - incurable defects in the subject property - Answer- loss of value due to factors beyond property boundaries (always incurable) Tom asks sara, a real estate salesperson, to help him set the right asking price for his home. Saras broker will help her prepare: - a reconciliation of value - an assessment analysis - a competitive market analysis - a limited appraisal - Answer- a competitive market analysis Two friends own the two largest real largest real estate firms in Beeville County. At one of their frequent lunches they conspire to set all their commission rates at higher than most other brokerage offices. This is a violation of - Answer- The sherman antitrust act Richard gets a call from a prospective buyer for his listing. The caller does not want to be represented. Richard owes this caller: - confidentiality - loyalty - honesty - Answer- - honesty Administration of the following would best be handled by a property manager? -anything residential -shopping center - Answer- Shopping center If bettys property is partially or totally federal wetlands, what would possibly allow betty to develop the site? - Answer- Wetlands banking would allow betty to contribute property elsewhere as dedicated wetlands The buyer gives the owner a $5,000 payment and a written agreement stating that, on July 1 of the following year, the buyer will purchase the property for $150,000 cash or the owner may keep the money. This transaction is known as - an option agreement - purchase contract with delayed settlement - Answer- An option agreement IF A contract for real estate is vague in basic terms, a court could hold that it is - binding on the offeror - unenforceable - valid against all parties - invalid until written by an attorney - Answer- contracts must be in writing and meet all elements to be enforceable A buyer makes the required number of montly payments and the owner conveys the property title to the buyer. This transaction is known as - lease with option to purchase - installment sales contract - sales agreement with delayed settlement - wraparound contract - Answer- installment sales contract kelly lists her house and tells her listing agent Sheila, Im listing for 180k but might take less, sheila may properly: - Answer- Keep the information to herself! Ronald will be in tokyo for several months until his house sells and he will move full time. His listing broker has exclusive right to sell, maintenance, bill paying, and any decisions. The agency created is - special -sub -general - designated - Answer- General Best way for a broker in dual agency to minimize his or her risk is to - Answer- obtain written acknowledgement from each party that it consents to agent acting for both sides. Typical relationship between broker and salesperson for tax purposes is known as - Answer- independent contractor The hansons home was listed with a broker, but they ended up locating a buyer at his place of employment and sold the property themselves. They were still obligated to pay a brokerage fee. What type of listing had they agreed to - Answer- Exclusive right to sell A listing brokers commission is earned when - Answer- An offer has been accepted Which of the following statements is true of a land contract? - the buyer has legal title to the property - the buyer is given the right to posses - Answer- The buyer is given the right to possess A deed is the instrument used to convey ownership of - Answer- Real Property A customer orders dinner in a restaurant. At the end of the meal is the customer legally obligated to pay the check? - Answer- Yes because implied contract Statute of frauds requires that - real estate brokers answer all questions honestly - the seller of real estate provides a written disclosure about the condition of the property - certain contracts, including those for the sale of real estate, must be in writing to be enforceable - a mortgage borrower has three days in which to cancel the loan - Answer- certain contracts, including the sale of real estate, must be in writing to be enforceable Dawn a salesperson working for betty the broker, lists sallys house with an exclusive right to sell listing agreement. Which of the following occurrences would not cause the termination of this agreement. -dawns death - sallys death - mutual agreement - destruction of sallys property - Answer- dawns death The duty of faithful performance, meaning that the agent is to obey all legal instruction given by the principal and to apply best efforts and diligence to carry out the objectives of the agency, is also known as the duty of - loyalty -confidentiality - reasonable care - Answer- Reasonable care In may the kleins accepted an offer to sell their house to the grosses. In July the grosses paid the purchase price and received a deed to the house and the keys. After July their contract was considered - Answer- Executed Repair and remodel generally adds to property value. In recognition of the role of contractors and suppliers in the increasing value of a property, in many states they are assured payment for their goods and services by being able to file a: - Answer- Mechanics lien against a property When several real estate brokers are invited to list a property, with commission due only to the one who produces the first acceptable buyer, the owner is offering - Answer- Open lisiting The earnest money accompanying a purchase offer - Answer- is not necessary to establish a valid contract.