PSI National Exam for Real Estate
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called - correct
answer ✔✔a contract
Antitrust laws prohibit competing brokers from all of the following - correct answer ✔✔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 - correct answer
✔✔all current owners of real estate fronting on that road
State laws differ on whether a buyer is entitled to know about - correct answer ✔✔a suicide that
occurred in the house last year.
A lawsuit for inverse condemnation may be brought by - correct answer ✔✔a homeowner
When is racial discrimination in the rental of rooms or apartments permitted? - correct answer
✔✔Under no circumstances
The real estate broker who is listing a house for sale should personally verify - correct answer ✔✔the
number of square feet in the building
Real property can be converted to personal property by - correct answer ✔✔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? - correct answer ✔✔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 - correct answer
✔✔prior appropriation
The purpose of requiring an earnest money deposit in a real estate sales contract is to - correct answer
✔✔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.) - correct answer ✔✔$409.20.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits
the lender to - correct answer ✔✔demand immediate payment of the entire note
The FHA functions MOST like - correct answer ✔✔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. - correct answer ✔✔discount points
When land is conveyed to a trustee, the trustee may - correct answer ✔✔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 - correct answer ✔✔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 - correct answer ✔✔the agreement does not comply with the Statute of Frauds
Earnest money should be deposited into a trust account - correct answer ✔✔in a timely manner,
according to state laws
A deed restriction is applicable to the activities of - correct answer ✔✔all owners, present and future
An easement can be terminated by - correct answer ✔✔prescription
Depreciation is calculated based on the - correct answer ✔✔cost of the building only
Which of the following approaches MOST reliably estimates the sales price of a single-family residence? -
correct answer ✔✔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? - correct answer ✔✔Seller
The escrow officer or closing agent MUST give information regarding the sales price and seller's social
security number to - correct answer ✔✔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? -
correct answer ✔✔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? - correct answer ✔✔$1,150
, Usury laws were enacted to protect the - correct answer ✔✔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 - correct answer ✔✔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 - correct answer ✔✔breached
Which of the following is NOT a consideration in the definition of market value? - correct answer
✔✔Buyer and seller must agree to appraised value
One common method for controlling the problems created by conflict of interest in dual representation
is - correct answer ✔✔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 - correct answer ✔✔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? - correct answer ✔✔Debit seller $300; credit buyer $300
Too much leverage may result in - correct answer ✔✔negative cash flow
A major reason for buying and owning a condominium rather than a detached single-family home is that
- correct answer ✔✔a condominium tends to be more affordable
An adjustable rate loan should include all of the following elements - correct answer ✔✔1. margin
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called - correct
answer ✔✔a contract
Antitrust laws prohibit competing brokers from all of the following - correct answer ✔✔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 - correct answer
✔✔all current owners of real estate fronting on that road
State laws differ on whether a buyer is entitled to know about - correct answer ✔✔a suicide that
occurred in the house last year.
A lawsuit for inverse condemnation may be brought by - correct answer ✔✔a homeowner
When is racial discrimination in the rental of rooms or apartments permitted? - correct answer
✔✔Under no circumstances
The real estate broker who is listing a house for sale should personally verify - correct answer ✔✔the
number of square feet in the building
Real property can be converted to personal property by - correct answer ✔✔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? - correct answer ✔✔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 - correct answer
✔✔prior appropriation
The purpose of requiring an earnest money deposit in a real estate sales contract is to - correct answer
✔✔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.) - correct answer ✔✔$409.20.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits
the lender to - correct answer ✔✔demand immediate payment of the entire note
The FHA functions MOST like - correct answer ✔✔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. - correct answer ✔✔discount points
When land is conveyed to a trustee, the trustee may - correct answer ✔✔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 - correct answer ✔✔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 - correct answer ✔✔the agreement does not comply with the Statute of Frauds
Earnest money should be deposited into a trust account - correct answer ✔✔in a timely manner,
according to state laws
A deed restriction is applicable to the activities of - correct answer ✔✔all owners, present and future
An easement can be terminated by - correct answer ✔✔prescription
Depreciation is calculated based on the - correct answer ✔✔cost of the building only
Which of the following approaches MOST reliably estimates the sales price of a single-family residence? -
correct answer ✔✔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? - correct answer ✔✔Seller
The escrow officer or closing agent MUST give information regarding the sales price and seller's social
security number to - correct answer ✔✔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? -
correct answer ✔✔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? - correct answer ✔✔$1,150
, Usury laws were enacted to protect the - correct answer ✔✔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 - correct answer ✔✔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 - correct answer ✔✔breached
Which of the following is NOT a consideration in the definition of market value? - correct answer
✔✔Buyer and seller must agree to appraised value
One common method for controlling the problems created by conflict of interest in dual representation
is - correct answer ✔✔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 - correct answer ✔✔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? - correct answer ✔✔Debit seller $300; credit buyer $300
Too much leverage may result in - correct answer ✔✔negative cash flow
A major reason for buying and owning a condominium rather than a detached single-family home is that
- correct answer ✔✔a condominium tends to be more affordable
An adjustable rate loan should include all of the following elements - correct answer ✔✔1. margin
