PSI Real Estate Exam (Broker 1)

Which of the following would be considered to be real property?

Fixtures

Your uncle died without a will, and you inherited his real estate. The way in which you would acquire his estate is by

the statute of descent and distribution.

Loans to low-income people in rural areas are made and guaranteed by

Rural Development.

A man receives possession of property under a deed that states that he will own the property as long as the present building standing on the property is not torn down.The type of estate the man holds is which of the following?

Determinable (defeasible) fee estate

You would like to hire more than one broker to sell your house and be able to sell the house yourself without paying a commission to a broker. Which of the following listing agreements should you choose?

Open

Which of the following is responsible for investigation and prosecuting violations of the federal fair housing laws?

Department of Housing and Urban Development (HUD)

Which of the following statements correctly identifies a defining characteristic of conventional mortgages?

Their interest rates are set by the lender.

A broker has been showing homes to some prospects. The prospects have learned of a home for sale by its owner, which they are interested in visiting. The broker calls the owner to arrange a showing, although the owner will not list with the broker.The bro

Neither the owner nor the prospects are legally bound to pay a commission to the broker.

A veteran wishes to receive a loan for $70,000 to buy a home. The home has been appraised by the VA at $68,000. Which of the following statements MOST accurately describes the veteran's situation?

The veteran may buy the home with a VA loan if he makes a down payment of $2,000.

You are paying interest on a $75,000 mortgage for three years after which the entire loan is due. This is called a(n)

term mortgage

A farmer is unable to pay the county taxes on his farm. The delinquent taxes would be considered

a lien.

A licensee's relative askes the licensee for information about one of the licensee's listings. After reviewing it, the relative arranges to see the property with the licensee. Two weeks later, the relative submitted an offer through another agency on the

The listing licensee should disclose the family relation with the buyer to the seller.

Which of the following Internal Revenue Service (IRS) forms is used to report commissions paid to salespeople by brokers?

1099 Misc

A retired woman owns her home free and clear and is looking for a mortgage that would provide her with monthly payments until she dies. This type of mortgage is called a

reverse annuity mortgage.

A man leased a store with the agreement that he would pay a fixed rent and the landlord would pay all operating expenses. This is an example of a

gross lease.

You have entered in to a land contract for the sale of your home. Which of the following statements is NOT correct?

The seller will retain possession during the term of the contract.

Which of the following terms identifies the practice of charging loan interest rates in excess of the maximum allowed by law?

Usury

Which of the following statements correctly describes the way in which a listing broker should represent her client?

The listing broker must present all offers to her client promptly when received.

Which of the following is TRUE as it relates to an easement appurtenant?

The dominant tenement owner pays taxes only on the dominant estate.

A died and left a will that transferred one-half of his 36-unit apartment building to his wife, one-fourth to his son, and one-fourth to his daughter. The devisees will be holding title as

tenants in common.

A licensee has entered into a written buyer-broker agreement with a client whereby the licensee will be compensated if the client buys a property of the type described in the agreement within the agreement period, regardless of whether or not the licensee

exclusive-buyer agency.

A mortgage is all of the following EXCEPT

an example of involuntary alienation.

A broker is selling a home for $85,900. The owner tells the broker that the roof needs repair, the basement leaks, and the house is a nonconforming use and that she will accept an offer well below $85,900. The broker now is negotiation with a prospect for

seller will accept an offer well below $85,900.

You listed a home for sale under an exclusive-right-to-sell agreement and showed the property to a person who wrote an offer with an earnest money check that was subsequently rejected by the owner. What should happen to the earnest money check?

It should just be returned to the buyer.

An investor finds that the cost of installing an air-conditioning system in an office building is greater than is justified by the rental increase that might result from the improvement of the property. However, the investor installs the air-conditioning

competition.

A loaned money to her sister and in return took a mortgage as security for the debt. She immediately recorded the mortgage. Thereafter, B loaned money to the same sister, took a morgage, and recorded it. The sister later defaulted, and the court determine

A had signed a subordination agreement in favor of B.

A broker has been asked to serve as an agent of a friend who wishes to sell his home. Prior to listing the friend's home, the broker is asked by another friend to serve as her agent in finding a home. Relatives of the two friends also have asked the broke

The broker may serve as agent for any of the buyers and sellers.

Which of the following types of depreciation is incurable?

A zoning variance of the neighbor's property for commercial use.

A salesperson would like to be classified as an independent contractor by her broker. What percentage of her income must be based on the sales production for her to qualify for independent-contractor status?

90 percent.

A couple is interested in buying a property located in an economically distressed section of town. Although the couple has an excellent credit history, they have been refused a loan by three different lenders. The MOST likely statement regarding these len

not engaging in illegal activities, as the rejections are based on independently made economic-based property reviews.

Which approach to value is an appraiser MOST likely to emphasize in the appraisal of a single-family home?

Sales comparison approach.

Which of the following installment sales amounts is NOT covered by the imputed interest law?

$2,000

The tax on the profit realized from an IRS 1031 exchange is

deferred.

Which of the following statements does NOT correctly describe joint tenancy?

Owners must be husband and wife.

Which of the following statements does NOT correctly describe radon gas?

Radon enters a house through the roof.

Strict liability under Superfund means that

the owner is responsible to the injured party without excuse.

Which of the following may NOT be governed by deed restrictions?

Ethnicity of tenants.

The business ownership structure of an S corporation provides which of the following benefits over the standard corporation structure.

Profits are not taxed.

The rate of return an investor will require to invest in real estate is called a(n)

capitalization rate.

National advertising and economies of volume purchasing are advantages for

franchises.

A broker requires that all budgeted costs for the planning period be justified each time a new budget is developed. This requirement reflects

the concept of zero-base budgeting.

Which of the following statements does NOT correctly describe the independent-contractor relationship?

The broker must provide a pension plan.

A salesperson works for a broker. The salesperson may

work for the broker as an independent contractor.

A broker has listed a home. The broker generally will earn her commission when

she finds a "buyer ready, willing , and able" to buy on the terms of the listing.

A Hispanic buyer has asked a broker to show her homes in a white neighborhood. The broker's response to the buyer should be

I'll be happy to show you homes in that neighborhood or any other neighborhood.

During a listing presentation, the seller tells the broker that she will not sell to Hispanics. Should the broker follow the seller's instructions?

No. The broker should not accept the listing.

You are preparing a competitive market analysis (CMA) on a two-story, three-bedroom house with one bathroom on the first floor and all of the bedrooms on the second floor. The appraisal term that BEST identifies how this affects the list price is

functional obsolescence.

Which of the following is NOT an example of real property?

The clay bricks that you will use to build your patio wall.

A listing broker acting as a single agent in the course of selling the property would be in violation of the broker's fiduciary duties to the seller by

telling a prospective buyer the lowest price the seller will accept below the list price.

A CORRECT statement about a competitive market analysis (CMA) is that it

is based on the sales comparison (market data) approach to value.

Which of the following forms of ownership is characterized by double taxation?

Corporation.

In the cost approach, an appraiser makes use of which of the following?

An estimate of the building's replacement cost.

An appraisal of a church probably would be based on the

cost approach.

With an FHA loan, the buyer will NOT be required to

pay 20 percent down payment.

Which of the following statements regarding points is TRUE?

One point equals 1 percent of the loan.

The net spendable income from an investment is known as the

cash flow.

A broker has calculated the amount of income remaining after deducting all of the firm's commissions from the firm's gross income. The broker has calculated the

company dollar.

A broker has an annual overhead of $200,000; there are ten desks, each accommodating two salespeople. The broker's desk cost is

$10,000

The discriminatory practice of guiding ethnic minorities toward available housing in neighborhoods made up of residents of the same ethnic group is referred to as

steering.

Which of the following statements does NOT apply to both purchase money mortgages and land contracts?

The buyer has equitable title during the life of the contract.

Which of the following is covered by Regulation Z?

A personal property credit transaction for $20,000

Which of the following is exempted from the Federal Fair Housing Act?

The rental of rooms in an owner-occupied, four-family dwelling.

You purchased a residence and neither took possession for recorded the deed. Which of the following statements BEST describes the status of your property ownership?

You have not provided constructive notice of ownership.

The relationship of the broker to the listing owner who hired him or her is that of a(n)

fiduciary

Which of the following would NOT be deposited in your trust account?

The commission you earn on a transaction

Which of the following statements does NOT correctly describe a limited liability company?

It may not be directly managed by members.

In order to represent legally all parties in the same real estate transaction, a licensee must

obtain the informed consent to dual agency from all principals.

You are working as an agent for a prospective buyer. The buyer buys a house listed on the multiple-listing service (MLS) of which you are a member. Which of the following statements does NOT correctly describe the situation?

You acted as a disclosed dual agent.

Tenancy in common is distinguished by which of the following characteristics?

Each co-owner's interest may be conveyed separately.

A plumbing company installed a new furnace and filed a lien for nonpayment immediately on completion. This was MOST likely a

specific lien.

Which of the following is NOT an example of functional obsolescence?

A roof that leaks.

A broker listed and sold a seller's home. The broker MOST likely earned her commission when

she found a buyer "ready, willing, and able" to buy on the terms of the listing.

A salesperson has taken a four-month exclusive-right-to-sell listing on a house. Prior to the expiration of the listing, the salesperson leaves the state and inactivates her license. Which of the following correctly describes the status of the listing?

The listing will continue as a valid contract between the seller and the broker.

A parcel of property that measures 1/8 mile by 1/8 mile is equal to

10 acres.

Which of the following is NOT an advantage of the FHA-insured loan?

Buyer protection with FHA insurance.

Which of the following is NOT a legal requirement of an option?

The exercise of the option by the optionee

The process of reviewing the various approaches to value in order to arrive at a final estimate of market value is called

reconciliation.

A broker and a seller have just signed a listing contract for the sale of the seller's house. Which of the following statements does NOT correctly describe their situation?

The broker has become a general agent for the seller.

The Americans with Disabilities Act (ADA) requires that an employer with a minimum of how many employees must comply with the ADA requirements?

15

You have just listed a property, and the owner has informed you that the roof leaks and the fourth bedroom was added without a building permit being issued. Which of the following BEST describes the type of disclosure you should make to potential buyers?

You must disclose both the roof leak and the lack of a building permit.

A agreed to lease D's house on a month-to-month basis. This lease is an example of a(an)

tenancy at will.

According to federal fair housing laws, parties who fell that they have been aggrieved by a discriminatory housing practice have a maximum of how long after the event to file a complaint?

One year

The county zoo holds title to the land that includes a condition that the zoo will hold title so long as it does not charge an admission fee. This is an example of a

defeasible-fee estate.