THE CE SHOP NATIONAL EXAM (PSI) PART 1 WITH ALL
CORRECT & 100% VERIFIED ANSWERS|LATEST UPDATE|
ALREADY GRADED A+
When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to
the contract requesting that an attorney review the contract. What is Dashiell looking at? ✔Correct
Answer-Addendum
What might the government do if property owners fail to pay taxes on their property? ✔Correct
Answer-Place a lien on the property
Unpaid taxes become a lien on real estate.
A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a
material fact that the seller didn't disclose. Which of these statements about Ajit's liability is true?
✔Correct Answer-Ajit may be liable if he operates in a state that requires licensees to make a
reasonable effort to discover adverse material facts.
Licensees must follow state laws regarding disclosure of all material facts, but typically there's no
distinction between disclosure of material facts or adverse material facts. Ajit may be liable even if
the seller didn't disclose the fact, depending on state law.
Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet.
The main floor is 1,200 square feet, including an unfinished laundry area that's 225 square feet. The
1,200-square-foot basement is finished. Bonnie's MLS system disregards below-grade square
footage. What square footage will Bonnie mention in her MLS listing and marketing materials?
✔Correct Answer-1,425
Only finished above-ground space should be counted in Bonnie's MLS listing. That means the square
footage of the upper floor plus the main floor (minus the unfinished laundry area). Bonnie should
report 1,425 square feet (450 + 1,200 - 225).
Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental
education center on the site. There are a few structures on the property, but they are in disrepair,
and it will likely be less expensive to tear them down and build new than to rehabilitate them.
However, the new owners are sure that they've made a great investment because the land is in great
shape. This reflects which physical characteristic of real property? ✔Correct Answer-
Indestructibility
Indestructibility is the physical characteristic that states that while improvements may deteriorate,
land can't be destroyed.
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest
payment totaling $2,042.71. What's the total amount the borrower will pay back over the life of the
loan? ✔Correct Answer-$367,687.80
To find the total amount paid back, multiply the monthly payment ($2,042.71) by the total number of
payments (180 = 12 payments/year x 15 years). The total paid back is $367,687.80.
What attracts borrowers to adjustable rate mortgages? ✔Correct Answer-lower initial interest rate
, A rental property owner purchased a property for $400,000 and pays $36,000 in ownership
expenses, plus $30,000 in operating expenses. The owner would like to achieve an ROI of 8%. What's
the minimum annual rent that would accomplish this? ✔Correct Answer-98,000
Minimum rent = Operating expenses + Owner expenses + ROI Margin. ROI margin is the owner's
initial investment x ROI. In this example $32,000 ($400,000 x .08). The minimum rent to achieve the
owner's goals is $98,000.
Many market conditions impact housing prices. Which of the following is a true statement?
✔Correct Answer-Reduced consumer confidence makes new buyers wary of purchasing and
homeowners hesitant to trade up.
Identifying the purpose of the appraisal leads the appraiser to do what next? ✔Correct Answer-
Identify data needed.
The first step is to state the problem so the appraiser can then identify the data that is needed.
An owner purchased a rental property for $750,000. What annual cash flow would result in a return
on investment (ROI) of 7%? ✔Correct Answer-$52,500
Stan decides to not sell his property to Crandall, even after they've signed a legal sales contract.
Crandall found a property he likes better, so they mutually agree to ______ the contract. ✔Correct
Answer-Rescind
When two parties agree to back out of a contract, they're agreeing to rescind the contract.
You're a real estate broker supervising 24 licensees. What's the most effective way for you to protect
your firm from lawsuits? ✔Correct Answer-Develop, implement, and train firm members on
policies and procedures.
Having policies and procedures in place and training staff on them may be the best preventive
measure.
When market conditions indicate top-of-the-market pricing, is it always in your client's best interest
to price it there? ✔Correct Answer-No, it still has to appraise.
If an appraiser has difficulty coming up with comparables that will support the pricing, the seller
could be at risk for a sale fail.
Landlords must abide by all fair housing, civil rights, and ADA regulations as well as comply with all
state and federal landlord-tenant legislation. What responsibility does the property manager have
related to this? ✔Correct Answer-The property manager, as the landlord's general agent, is
responsible for upholding all the laws and regulations required of the landlord.
The landlord--and by extension, the property manager who's acting as a general agent--must adhere
to all federal, state, and local regulations related to fair housing, civil rights, ADA, and landlord-tenant
laws.
Smalltown is building a new interstate exchange to facilitate access to shopping and restaurants. In
order to do so, it purchased two homes and tore them down so the ramps to and from the interstate
CORRECT & 100% VERIFIED ANSWERS|LATEST UPDATE|
ALREADY GRADED A+
When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to
the contract requesting that an attorney review the contract. What is Dashiell looking at? ✔Correct
Answer-Addendum
What might the government do if property owners fail to pay taxes on their property? ✔Correct
Answer-Place a lien on the property
Unpaid taxes become a lien on real estate.
A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a
material fact that the seller didn't disclose. Which of these statements about Ajit's liability is true?
✔Correct Answer-Ajit may be liable if he operates in a state that requires licensees to make a
reasonable effort to discover adverse material facts.
Licensees must follow state laws regarding disclosure of all material facts, but typically there's no
distinction between disclosure of material facts or adverse material facts. Ajit may be liable even if
the seller didn't disclose the fact, depending on state law.
Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet.
The main floor is 1,200 square feet, including an unfinished laundry area that's 225 square feet. The
1,200-square-foot basement is finished. Bonnie's MLS system disregards below-grade square
footage. What square footage will Bonnie mention in her MLS listing and marketing materials?
✔Correct Answer-1,425
Only finished above-ground space should be counted in Bonnie's MLS listing. That means the square
footage of the upper floor plus the main floor (minus the unfinished laundry area). Bonnie should
report 1,425 square feet (450 + 1,200 - 225).
Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental
education center on the site. There are a few structures on the property, but they are in disrepair,
and it will likely be less expensive to tear them down and build new than to rehabilitate them.
However, the new owners are sure that they've made a great investment because the land is in great
shape. This reflects which physical characteristic of real property? ✔Correct Answer-
Indestructibility
Indestructibility is the physical characteristic that states that while improvements may deteriorate,
land can't be destroyed.
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest
payment totaling $2,042.71. What's the total amount the borrower will pay back over the life of the
loan? ✔Correct Answer-$367,687.80
To find the total amount paid back, multiply the monthly payment ($2,042.71) by the total number of
payments (180 = 12 payments/year x 15 years). The total paid back is $367,687.80.
What attracts borrowers to adjustable rate mortgages? ✔Correct Answer-lower initial interest rate
, A rental property owner purchased a property for $400,000 and pays $36,000 in ownership
expenses, plus $30,000 in operating expenses. The owner would like to achieve an ROI of 8%. What's
the minimum annual rent that would accomplish this? ✔Correct Answer-98,000
Minimum rent = Operating expenses + Owner expenses + ROI Margin. ROI margin is the owner's
initial investment x ROI. In this example $32,000 ($400,000 x .08). The minimum rent to achieve the
owner's goals is $98,000.
Many market conditions impact housing prices. Which of the following is a true statement?
✔Correct Answer-Reduced consumer confidence makes new buyers wary of purchasing and
homeowners hesitant to trade up.
Identifying the purpose of the appraisal leads the appraiser to do what next? ✔Correct Answer-
Identify data needed.
The first step is to state the problem so the appraiser can then identify the data that is needed.
An owner purchased a rental property for $750,000. What annual cash flow would result in a return
on investment (ROI) of 7%? ✔Correct Answer-$52,500
Stan decides to not sell his property to Crandall, even after they've signed a legal sales contract.
Crandall found a property he likes better, so they mutually agree to ______ the contract. ✔Correct
Answer-Rescind
When two parties agree to back out of a contract, they're agreeing to rescind the contract.
You're a real estate broker supervising 24 licensees. What's the most effective way for you to protect
your firm from lawsuits? ✔Correct Answer-Develop, implement, and train firm members on
policies and procedures.
Having policies and procedures in place and training staff on them may be the best preventive
measure.
When market conditions indicate top-of-the-market pricing, is it always in your client's best interest
to price it there? ✔Correct Answer-No, it still has to appraise.
If an appraiser has difficulty coming up with comparables that will support the pricing, the seller
could be at risk for a sale fail.
Landlords must abide by all fair housing, civil rights, and ADA regulations as well as comply with all
state and federal landlord-tenant legislation. What responsibility does the property manager have
related to this? ✔Correct Answer-The property manager, as the landlord's general agent, is
responsible for upholding all the laws and regulations required of the landlord.
The landlord--and by extension, the property manager who's acting as a general agent--must adhere
to all federal, state, and local regulations related to fair housing, civil rights, ADA, and landlord-tenant
laws.
Smalltown is building a new interstate exchange to facilitate access to shopping and restaurants. In
order to do so, it purchased two homes and tore them down so the ramps to and from the interstate
