National PSI Broker Exam Post test Questions With Correct Answers 2023 Update

National PSI Broker Exam Post test Questions With Correct Answers 2023 Update In the appraisal process, the capitalization rate is used by an appraiser to determine which type of value? A) Future value of any type of property B) Past value of a unique and income-producing property C) Present value of an income-producing property D) Probable value of residential property - Correct Answer-C) The answer is present value of an income-producing property. The capitalization formula uses current net operating income (NOI) to determine the present value of an income-producing property. If the current monthly GRM on a single-family home is 100 with an estimated annual income of $24,000, what is the estimated value of the property? A) $120,000 B) $200,000 C) $240,000 D) $2,400,000 - Correct Answer-B) The answer is $200,000. Monthly gross rent multiplier (GRM) × monthly income = value. 100 × 2,000 ($24,000 ÷ 12) = $200,000. An appraiser is using the sales comparison approach to estimate the value of a residential home. The appraiser will make positive and negative adjustments to the sold comparables for all of the following factors EXCEPT A) square footage of the sold properties. B) lot size and location of each sold comparable in relation to the subject. C) actual replacement and reproduction cost. D) date of sale of each sold comparable. - Correct Answer-C) The answer is actual replacement and reproduction cost. Appraisers using the sales comparison approach will adjust for square footage, lot size and location, and date of sale in a rapidly changing market. Reproduction cost is used in the cost approach to value, not the sales comparison approach. The BEST approach for an appraiser trying to determine market value of a shopping center, apartment building, or office building would be the A) replacement approach to value. B) income approach to value. C) sales comparison approach to value. D) summation approach to value. - Correct Answer-B) The answer is income approach to value. The income approach is used when a property, such as a shopping center, generates revenue. An active real estate professional must be able to help consumers determine the probable sales price of a real property. A broker's or salesperson's competitive market analysis would be used for all of the following EXCEPT A) setting the loan value. B) determining the listing price. C) assisting sellers and buyers in determining market value. D) estimating the probable sales price. - Correct Answer-A) The answer is setting the loan value. Appraisals, not competitive market analyses (CMAs), are used to set or determine loan value. CMAs are often used to provide an estimate of market value or a probable price. Appraisals also estimate market value. An appraiser has been asked to determine the value of a church. The appraiser has determined the best approach to value for this property is the cost approach. While completing the process of determining the value, the appraiser will consider all of the following EXCEPT A) reproduction cost of the subject property. B) value of the land under the church. C) adjusted square footage of the subject and comparables. D) current depreciation of the property improvements. - Correct Answer-c) The answer is adjusted square footage of the subject and comparables. An appraiser using the cost approach does not make adjustments for square footage or any other items All of the following are true of FHA and VA loans EXCEPT A) there can be no prepayment penalty. B) the loan is assumable by a qualified buyer. C) the loan-to-value (LTV) ratio may typically be higher than that of conventional loans. D) an appraisal is not required. - Correct Answer-D) The answer is an appraisal is not required. FHA and VA loans require no prepayment penalty. The loans are assumable by qualified buyers, and the LTV ratio is usually allowed to be higher than on conventional loans. Like all federal loans, an appraisal is required for FHA and VA loans. A state statute has set the maximum interest rate allowed on loans originated within the state. This type of law is known as A) discount points. B) usury law. C) nominal interest rate. D) statute of limitations. - Correct Answer-b) The answer is usury law. Discount points are paid to increase a lender's yield. The nominal interest rate is the note rate without other charges. The statute of limitations set the amount of time lawsuits can be filed. A borrower has applied for a loan and has been told the funds will be held because there is a three-day right of rescission. Which of the following loans would have such a three-day right of rescission? A) Home purchase first position B) Home equity loan C) Purchase of a vacation home D) Construction loan for a new home - Correct Answer-B) The answer is home equity loan. The Truth in Lending Act gives borrowers of home improvement loans three days to rescind the loan. This is not available for any purchase or construction loans for homes. A buyer is getting a new loan with a 95% loan-to-value (LTV) ratio. The full amount of money for the new loan that the lender will be able to provide the buyer will be determined by the A) lower of the sales price or appraised value. B) sales price only. C) appraised value only. D) higher of the sales price or appraised value. - Correct Answer-A) The answer is lower of the sales price or appraised value. LTV is determined by the lower of the sales price or appraised value. A borrower is looking for a loan with a low down payment and does not mind if the loan has a large balloon at payoff. The type of loan that would MOST likely meet this borrower's criteria is A) partially amortized. B) adjustable rate. C) term. D) fully amortized. - Correct Answer-C) The answer is term. Term, or straight, loans are interest only. These loans have no payment of principal; therefore, they will have the highest balloon payment at the end. Which of the following does the federal RESPA law require the lender to provide to all loan applicants within three days of application? A) HUD-1 settlement form B) Good-faith estimate of all closing costs C) Truth-in-lending statement D) Notice of the three-day rescission right - Correct Answer-B) The answer is good-faith estimate of all closing costs. RESPA requires the lender to provide the borrower with a good-faith estimate at the time of loan application or within three days after application. The HUD-1 statement must be provided to the parties at closing. A different federal law requires the truth-in-lending statement and a three-day rescission right. A borrower is in default on his home loan and has offered to give the lender a deed in lieu of foreclosure. The lender declined the borrower's offer. This is MOST likely because A) the loan to value is too high. B) there is a junior or secondary lien. C) it will take more time and cost more than foreclosing on the property. D) the lender would not get possession or title upon transfer. - Correct Answer-B) The answer is there is a junior or secondary lien. The foreclosure process gives all secondary liens the right to redeem, buy out the first, or lose their lien rights. Taking a deed (in lieu of foreclosure) with junior liens would leave these debts in place. Ann has a contract with Ben in which she must perform if Ben decides to go forward. This is what type of contract? A) Unilateral for Ben B) Bilateral for both C) Unilateral for Ann D) Nonbinding - Correct Answer-C) The answer is unilateral for Ann. Ann has to perform if Ben takes action by going forward. This makes the contract unilateral for Ann. A buyer and a seller have been through several counteroffers on a property and finally reached an agreement that was accepted by all parties. During this stage of the process when the contract has yet to be performed, the status of the contract is A) executory. B) executed. C) voidable. D) unilateral. - Correct Answer-A) The answer is executory. Executory contracts have not been completed (executed). The seller has requested that the earnest money be 5% of the purchase price, but the buyer is concerned about giving such a large amount of money, which might not be returned. The purpose of the buyer's earnest money is to A) act as consideration, which is required in all valid contracts. B) give the seller specific performance as a remedy if the buyer fails to get a loan. C) act as liquidated damages if the buyer defaults without meeting contingency requirements. D) give the seller a reason to allow a financing contingency, which states that if the buyer can't get a loan, the seller will always be able to keep the earnest money. - Correct Answer-C) The answer is act as liquidated damages if the buyer defaults without meeting contingency requirements. Earnest money is not required, is not consideration, and is typically tied to liquidated damages if the buyer defaults. The buyer typically gets the earnest money back if the buyer cannot obtain a loan and meet the requirements of the contingency, such as giving written notice before the contingency deadline. Mutual rescission, when the parties rescind a contract and return all things of value to each party, would likely occur in all of the following situations EXCEPT Continues...