KENTUCKY PSI PRACTICE EXAM GENERAL PORTION
QUESTIONS
In every real estate transaction, a legal description of the real estate MUST appear in
the transaction documents. What kind of legal description should be used in MOST
transactions? - Answer -The same one used in prior transfers of the parcel, verified by
a surveyor.
A legal easement can be created by any of the following EXCEPT - Answer -merger of
the titles
Timeshare ownership programs MOST often use which of the following ownership
forms? - Answer -Tenancy in common
Real property can be converted to personal property by - Answer -severance
A tenant rented an apartment, signing a 15-month lease. After the lease expired, the
tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant
have? - Answer -Tenancy at will
Two lots of the same size are sold on a street. The lot on the corner sells for $20,000
more than the lot in the middle of the street. Which of the following characteristics
MOST likely explains the price difference? - Answer -Situs
How does a creditor who has obtained a judgment get satisfaction against a debtor who
will not pay? - Answer -Writ of execution
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. Either riparian and littoral rights are automatically conveyed with property, or all
water rights are controlled by the state under the doctrine of prior appropriation. The
doctrine of prior appropriation is MOST likely to be followed in states where - Answer -
Water is scarce
An environmental impact statement typically describes the effects of a proposed project
on factors such as - Answer -public health and safety
If an older building cannot be air-conditioned, it is an example of - Answer -functional
obsolescence
A competitive market analysis takes into consideration - Answer -square footage of the
subject property
,When more than one approach to value is applied to a property and different indications
of value are produced, how should the final estimate of value be determined? - Answer
-Reconciliation
All of the following are methods to calculate the reproduction or replacement cost of
building EXCEPT the - Answer -straight-line method
Which of the following is NOT a consideration in the definition of market value? -
Answer -Buyer and seller must agree to appraised value
An appraiser MUST be licensed or certified to handle Federally related work on
residential property valued at more than - Answer -$250,000
Which of the following statements about discount points is FALSE? - Answer -They are
computed as a percentage of the selling price.
When is flood insurance REQUIRED in order to obtain a loan? - Answer -When the
property is located in a Flood Hazard Zone
The FHA functions MOST like - Answer -an insurance company
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to - Answer -demand immediate payment of the entire
note.
Regulation Z requires that the borrower be fully informed of all of the following EXCEPT
- Answer -the total interest
An adjustable rate loan should include all fo the following element except - Answer -
negative amortization
The purpose of usury laws is to regulate - Answer -interest rates charged by lenders
What is the term used for the person or organization who acts as an intermediary for the
purpose of obtain financing? - Answer -Mortgage broker
The relationship in which the agent is place in the position of trust and confidence to the
principal is known by the term - Answer -fiduciary
A salesperson lists a property with a contract that allows for subagency and dual
agency. The salesperson is - Answer -an agent to the broker and subagent to the
principal
If conditions for purchase are included in a deed and these conditions are violated, what
is the penalty? - Answer -Return of the property the original owner
, Which of the following BEST illustrates the concept and intent of a buffer zone? -
Answer -Garden apartments located between a single-family residential neighborhood
and a shopping center.
A deed restriction is applicable to the activities of - Answer -present and future owners
A lawsuit for inverse condemnation may be brought by - Answer -a homeowner
When a sewer line is installed down a rural road, it will probably be shared by - Answer
-all current owners of real estate fronting that road.
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? - Answer -Agency coupled with an interest.
The amount of commission to be paid is - Answer -agreed upon by the seller and the
agent on the contract
One common method for controlling the problems created by conflict of interest in dual
representation is - Answer -allowing a broker to designate separate salespeople within
the company as legal representatives of each of the clients.
A broker has brought a ready, willing, and able buyer to a seller. In MOST listing
contracts, the broker has earned his commission when - Answer -the seller accepts the
offer
Under the terms of their listing contract, the owners may sell their house themselves
and pay no commission. If their agent sells it, a commission will be due. What kind of
listing contract do the owners have? - Answer -Exclusive agency listing.
An agency relationship between a property owner and a property manager is usually
created by - Answer -a management agreement
The day after a broker's listing on a house expired, it was listed with another broker and
offered in the MLS. Several days later, a third licensee called for the first broker and
asked for the key to show the home. The broker should inform the caller that - Answer -
he is no longer the listing agent.
When a principal authorizes an agent to perform a particular act or transaction, it is an
example of a - Answer -special agency
The Department of Housing and Urban Development estimates that most private homes
built before 1978 contain potentially dangerous levels of lead. Because of this, some
Federal agencies, such as FHA, - Answer -require the buyer to acknowledge disclosure
of the presence of any known lead paint.
QUESTIONS
In every real estate transaction, a legal description of the real estate MUST appear in
the transaction documents. What kind of legal description should be used in MOST
transactions? - Answer -The same one used in prior transfers of the parcel, verified by
a surveyor.
A legal easement can be created by any of the following EXCEPT - Answer -merger of
the titles
Timeshare ownership programs MOST often use which of the following ownership
forms? - Answer -Tenancy in common
Real property can be converted to personal property by - Answer -severance
A tenant rented an apartment, signing a 15-month lease. After the lease expired, the
tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant
have? - Answer -Tenancy at will
Two lots of the same size are sold on a street. The lot on the corner sells for $20,000
more than the lot in the middle of the street. Which of the following characteristics
MOST likely explains the price difference? - Answer -Situs
How does a creditor who has obtained a judgment get satisfaction against a debtor who
will not pay? - Answer -Writ of execution
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. Either riparian and littoral rights are automatically conveyed with property, or all
water rights are controlled by the state under the doctrine of prior appropriation. The
doctrine of prior appropriation is MOST likely to be followed in states where - Answer -
Water is scarce
An environmental impact statement typically describes the effects of a proposed project
on factors such as - Answer -public health and safety
If an older building cannot be air-conditioned, it is an example of - Answer -functional
obsolescence
A competitive market analysis takes into consideration - Answer -square footage of the
subject property
,When more than one approach to value is applied to a property and different indications
of value are produced, how should the final estimate of value be determined? - Answer
-Reconciliation
All of the following are methods to calculate the reproduction or replacement cost of
building EXCEPT the - Answer -straight-line method
Which of the following is NOT a consideration in the definition of market value? -
Answer -Buyer and seller must agree to appraised value
An appraiser MUST be licensed or certified to handle Federally related work on
residential property valued at more than - Answer -$250,000
Which of the following statements about discount points is FALSE? - Answer -They are
computed as a percentage of the selling price.
When is flood insurance REQUIRED in order to obtain a loan? - Answer -When the
property is located in a Flood Hazard Zone
The FHA functions MOST like - Answer -an insurance company
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to - Answer -demand immediate payment of the entire
note.
Regulation Z requires that the borrower be fully informed of all of the following EXCEPT
- Answer -the total interest
An adjustable rate loan should include all fo the following element except - Answer -
negative amortization
The purpose of usury laws is to regulate - Answer -interest rates charged by lenders
What is the term used for the person or organization who acts as an intermediary for the
purpose of obtain financing? - Answer -Mortgage broker
The relationship in which the agent is place in the position of trust and confidence to the
principal is known by the term - Answer -fiduciary
A salesperson lists a property with a contract that allows for subagency and dual
agency. The salesperson is - Answer -an agent to the broker and subagent to the
principal
If conditions for purchase are included in a deed and these conditions are violated, what
is the penalty? - Answer -Return of the property the original owner
, Which of the following BEST illustrates the concept and intent of a buffer zone? -
Answer -Garden apartments located between a single-family residential neighborhood
and a shopping center.
A deed restriction is applicable to the activities of - Answer -present and future owners
A lawsuit for inverse condemnation may be brought by - Answer -a homeowner
When a sewer line is installed down a rural road, it will probably be shared by - Answer
-all current owners of real estate fronting that road.
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? - Answer -Agency coupled with an interest.
The amount of commission to be paid is - Answer -agreed upon by the seller and the
agent on the contract
One common method for controlling the problems created by conflict of interest in dual
representation is - Answer -allowing a broker to designate separate salespeople within
the company as legal representatives of each of the clients.
A broker has brought a ready, willing, and able buyer to a seller. In MOST listing
contracts, the broker has earned his commission when - Answer -the seller accepts the
offer
Under the terms of their listing contract, the owners may sell their house themselves
and pay no commission. If their agent sells it, a commission will be due. What kind of
listing contract do the owners have? - Answer -Exclusive agency listing.
An agency relationship between a property owner and a property manager is usually
created by - Answer -a management agreement
The day after a broker's listing on a house expired, it was listed with another broker and
offered in the MLS. Several days later, a third licensee called for the first broker and
asked for the key to show the home. The broker should inform the caller that - Answer -
he is no longer the listing agent.
When a principal authorizes an agent to perform a particular act or transaction, it is an
example of a - Answer -special agency
The Department of Housing and Urban Development estimates that most private homes
built before 1978 contain potentially dangerous levels of lead. Because of this, some
Federal agencies, such as FHA, - Answer -require the buyer to acknowledge disclosure
of the presence of any known lead paint.
