PSI PA Real Estate Practice Questions and Answers (Exam) Graded A+ 100% _ out of 100%

PSI PA Real Estate Practice Questions and Answers (Exam) Graded A+ 100% _ out of 100% The economic characteristics of land are - CORRECT ANSWER-scarcity, location, and durability A major difference between freehold and nonfreehold estates is that all freehold estates - CORRECT ANSWER-are of indeterminable duration An easement can be terminated by - CORRECT ANSWER-merger of titles The land description T3N, R4W Principal Meridian refers to what method of property description? - CORRECT ANSWER-Rectangular survey Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are - CORRECT ANSWER-tenants at sufferance A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these balances. Which of the following statements is FALSE regarding the distribution of funds? - CORRECT ANSWER-The second mortgage receives nothing unless he forced the foreclosure auction. At the time of harvest, crops that require annual planting are generally considered to be - CORRECT ANSWER-personal property A property owner died, having willed his property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through - CORRECT ANSWER-escheat An environmental impact statement typically describes the effects of a proposed on factors such as - CORRECT ANSWER-public health and safety A lawsuit for inverse condemnation may be brought by - CORRECT ANSWER-a homeowner A deed restriction is applicable to the activities of - CORRECT ANSWER-all owners, present and future The terms "littoral," "riparian," and "appropriative" refer to - CORRECT ANSWER-water rights If conditions for purchase are included in a deed and these conditions are violated, what is the penalty? - CORRECT ANSWER-Return of the property to the original owner. The PRIMARY purpose of zoning ordinances is to - CORRECT ANSWER-implement a local master plan An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than - CORRECT ANSWER-$250,000 If all other factors are equal, in which location is a parking lot likely to bring the highest sales price? - CORRECT ANSWER-Business district zoned for a six-story office building. A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest - CORRECT ANSWER-a competitive market analysis to determine the property's value. A formal appraisal will ALWAYS be REQUIRED when the - CORRECT ANSWER-lender wants to sell the mortgage to the secondary market. When compiling a competitive market analysis, a broker would look for comparable properties that - CORRECT ANSWER-were located near the property being listed. All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the - CORRECT ANSWER-straight-line method Which of the following approaches MOST reliably estimates the sales price of a single-family residence? - CORRECT ANSWER-Market data The purpose of usury laws is to regulate - CORRECT ANSWER-interest rates charged by lenders. Regulation Z addresses all of the following issues EXCEPT - CORRECT ANSWER-usury. Which of the following statements about discount points is FALSE? - CORRECT ANSWER-They are computed as a percentage of the selling price. An adjustable rate loan should include all of the following elements EXCEPT - CORRECT ANSWER-negative amortization 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. In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT - CORRECT ANSWER-more variety of loan programs available. When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the - CORRECT ANSWER-mortgagor. A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should - CORRECT ANSWER-tell the seller that the buyer will pay more. A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is - CORRECT ANSWER-an agent to the broker and a subagent to the principal. An agency relationship between a property owner and a property manager is usually created by - CORRECT ANSWER-a management agreement. In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers? - CORRECT ANSWER-One. 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. A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when - CORRECT ANSWER-the seller accepts the offer. 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. When a principal authorizes an agent to perform a particular act or transaction, it is an example of a - CORRECT ANSWER-special agency. During the listing presentation, the seller questions the amount of commission to be paid and is told - CORRECT ANSWER-the amount of commission is negotiable. 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 the first broker and asked for the key to show the home. The broker should inform the caller that - CORRECT ANSWER-he is no longer the listing agent. State laws differ on whether a buyer is entitled to know about - CORRECT ANSWER-a suicide that occurred in the house last year. A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should - CORRECT ANSWER-tell the seller to disclose the termite treatment on the property disclosure. 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, - CORRECT ANSWER-require the buyer to acknowledge disclosure of the presence of any known lead paint. 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. The real estate broker who is listing a house for sale should personally verify - CORRECT ANSWER-the number of square feet in the building. 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. 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. A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have? - CORRECT ANSWER-The buyer may sue the seller for specific performance. The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of - CORRECT ANSWER-impossibility of performance. A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called - CORRECT ANSWER-an option contract. A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as - CORRECT ANSWER-void. An agreement to purchase that has NOT yet closed is - CORRECT ANSWER-an executory contract. A written agreement in which a purchaser agrees to by and a seller agrees to sell is called - CORRECT ANSWER-a contract. 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 couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease terms? - CORRECT ANSWER-No notice is required. 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