Download PSI Exam Questions and Answers: Real Estate Principles and Practices and more Exams Nursing in PDF only on Docsity!
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Federal Truth-in-Lending laws are also known as - CORRECT ANSWER ✔✔Regulation Z A salesperson qualified a minority couple with two children and defined their price range as between $110,000 and $120,000 for the three- bedroom house they wanted. They asked to look at two listings in a nonminority neighborhood. The salesperson did not show them the properties because they were priced under $90,000 and had only two small bedrooms. Did the salesperson act appropriately and why or why not? - CORRECT ANSWER ✔✔No, because it is appropriate to show any property for which the buyer is qualified. An environmental impact statement typically describes the effects of a proposed project on factors such as - CORRECT ANSWER ✔✔public health and safety When a principal authorizes an agent to perform a particular act or transaction, it is an example of a - CORRECT ANSWER ✔✔special agency If an older building cannot be air-conditioned, it is an example of - CORRECT ANSWER ✔✔functional obsolescence
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If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan (rounded to the nearest $100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION TABLE.) - CORRECT ANSWER ✔✔$176, for 5.5% 30 yr 1000/5.67789 = 176. 176.121764 x1000 = $176, for 4.5% 20 yr 1000/6.324 = 158. 158.065531 x1000 = $158, FIRST OPTION IS LATGER A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as - CORRECT ANSWER ✔✔steering
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A real estate salesperson is representing only the buyer in a transaction. Which of the following actions would be a violation of the salesperson's agency duties to the client? - CORRECT ANSWER ✔✔disclosing the highest price the buyer is willing to pay 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. A licensee has an agency representation agreement with a buyer. When showing another company's listing, what obligation does the licensee have to the seller and the listing broker at the other company? - CORRECT ANSWER ✔✔Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer. In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers? - CORRECT ANSWER ✔✔one Failure of a real estate agent to comply with Fair Housing practices is punishable by - CORRECT ANSWER ✔✔license revocation and criminal prosecution.
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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. 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. A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable? - CORRECT ANSWER ✔✔The seller is heavily under the influence of alcohol at the time of signing. 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.
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between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.) - CORRECT ANSWER ✔✔$ monthly payment = loan/1000 x factor for 5% 15 yr 140000/1000 x 7.90794 = 1107. for 6% 30 yr 140000/1000 x 5.99551 = 839. 1107.11 - 839.37 = $ 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 counteroffer A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so? - CORRECT ANSWER ✔✔The person appointed by the court to act for the disabled person must contract on his or her behalf.
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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 Salesperson Susan was at the local coffee shop with some agents from other offices. The subject of commissions came up, and agents began to compare their commission rates. Susan should - CORRECT ANSWER ✔✔advise her friends this could constitute a violation of Sherman Antitrust Act 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. A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that - CORRECT ANSWER ✔✔there is no dollar limit on damages paid.
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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 couple bought a rental house for $195,000. Its assessed value was $180,000. If the tax rate is $1.50 per $100 of assessed value, what is the monthly contribution the lender will REQUIRE for taxes? Round to the nearest cent. - CORRECT ANSWER ✔✔$ 1.5/100 x 180000 180000/12 = 225 A lawsuit for inverse condemnation may be brought by - CORRECT ANSWER ✔✔the homeowner An Environmental Impact Statement (EIS) - CORRECT ANSWER ✔✔projects the impact on the environment of a proposed project. Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising? - CORRECT ANSWER ✔✔"catholics preferred"
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Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income is
- CORRECT ANSWER ✔✔commission sales Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of - CORRECT ANSWER ✔✔misrepresentation 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. 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
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State laws differ on whether a buyer is entitled to know about - CORRECT ANSWER ✔✔a suicide that occurred in the house last year. A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store? - CORRECT ANSWER ✔✔Conditional use permit or zoning variance. In the sale of property, there is often confusion over whether an item is a fixture or personal property. What is the best way to avoid this confusion? - CORRECT ANSWER ✔✔Specify questionable items of property in the written sales contract. A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm has an agency relationship with - CORRECT ANSWER ✔✔builder 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.
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If the terms of a contract indicate that Party A will be obliged to perform her part of the contract only if Party B chooses to take a certain action, then the contract is a - CORRECT ANSWER ✔✔unilateral contract in which only Party A has made a promise to perform. When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should - CORRECT ANSWER ✔✔have short deadlines. A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1/2% or for 30 years at 6 1/2%. To the nearest dollar, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.) - CORRECT ANSWER ✔✔$ 220000/1000x 6.32068 = 1390. 220000/1000x8.17083 = 1797. 1797.58-1390.54= Alex, 14, and Kent, 17, inherited a piece of property. The next year, Kent deeded the whole property to Alex, who immediately put it on the
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A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given - CORRECT ANSWER ✔✔constructive notice MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and - CORRECT ANSWER ✔✔the sale price According to the principle of progression, a three-bedroom, one-story home is MOST likely to bring the highest sales price if located in a neighborhood in which - CORRECT ANSWER ✔✔most homes are larger than the sale home. When a home is purchased using an ARM, the monthly loan payment on the mortgage will - CORRECT ANSWER ✔✔vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced. Under the common law of agency, licensees owe the broker with whom they are associated all of the following duties EXCEPT - CORRECT ANSWER ✔✔indemnification An investment property returns 12% of its value or $21,000 annually. What is the value of the property? - CORRECT ANSWER ✔✔175,
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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 legally can't be enforced If leased premises become unusable for the purpose state in the lease, the tenant may have the right to abandon the premises. This action is called - CORRECT ANSWER ✔✔constructive eviction A legal easement can be created by any of the following EXCEPT - CORRECT ANSWER ✔✔merger of the titles For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income? - CORRECT ANSWER ✔✔Mortgage loan interest, local property taxes, mortgage loan origination fees.
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Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property? - CORRECT ANSWER ✔✔seller A commercial property lost value because a recently constructed highway moved traffic away from the property. This is an example of - CORRECT ANSWER ✔✔economic or external obsolescence. A lender will make an 80% loan-to-value loan on a property that is appraised for $72,250 and sells for $73,500. If the buyer has saved $14,450 for a down payment, how much more (if any) will he need in order to make the down payment required under the terms of this loan? - CORRECT ANSWER ✔✔He needs an additional $1,250 in order to make the down payment. ???? Which rule-of-thumb formula for estimating property value is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000? - CORRECT ANSWER ✔✔GRM A seller signs a listing agreement with a broker. The seller can cancel the listing at any time without legal liability if - CORRECT ANSWER ✔✔the broker violates the terms of the contract.
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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. The FHA functions MOST like - CORRECT ANSWER ✔✔an insurance company
