PSI REAL ESTATE SALESPERSON PRACTICE EXAM/A+ Rated/2024-2025, Exams of Real Estate Management

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PSI REAL ESTATE SALESPERSON

PRACTICE EXAM/A+ Rated/2024- 2025

A couple listed their home with a broker. After 2 months, the seller found a buyer, and the sale closed. The seller was not obligated to pay a commission to the broker. This listing was MOST likely

1. an exclusive agency listing.
2. an exclusive right to sell listing.
3. a net listing.
4. an advance fee listing. an exclusive agency listing What critical aspect of the property inspection process MUST licensees convey to prospective buyers?
5. Difficulty of finding competent inspectors.
6. Appropriate fee splitting between inspectors and brokers.
7. Need for inspections to be completed within the time stated in the contract.
8. Likelihood that the inspection will generate a list of items sellers must repair. Need for inspections to be completed within the time stated in the contract. An exception to title insurance coverage is

1. forged documents.
2. defects found in public newspapers.
3. incorrect records of marital status.
4. defects that clearly appear in the title search. defects that clearly appear in the title search. 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.)
5. $158,
6. $158,
7. $175,
8. $176, $176, State laws differ on whether a buyer is entitled to know about
9. a suicide that occurred in the house last year.
10. possible lead paint in the property.
11. the flooding of the basement every spring.
12. the fact that the sellers are getting a divorce. a suicide that occurred in the house last year.

Three identical homes in a neighborhood were listed at the same time in a market where demand was constant. According to the law of supply and demand, which would have sold for the lowest price?

1. The first sold.
2. The second sold.
3. The last sold.
4. Cannot tell from the information given The first sold. A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes maintenance of value over profitability?
5. An individual entrepreneur who owns several apartment buildings.
6. The Department of Housing and Urban Development.
7. The investment division of a bank.
8. A corporate Real Estate Investment Trust. The Department of Housing and Urban Development.

Federal Truth-in-Lending laws are also known as

1. the Freedom of Information Act.
2. the Equal Credit Opportunity Act.
3. Regulation Z.
4. Title VIII. Regulation Z. The FHA functions MOST like
5. a bank or savings and loan association.
6. a mortgage company.
7. an investment group.
8. an insurance company. an insurance company. 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?
9. Apply the legal tests of a fixture.
10. Apply local court decisions dealing with similar items.
11. Specify questionable items of property in the written sales contract.
12. Use the legal definition of a fixture as any permanently attached item.

Specify questionable items of property in the written sales contract. A salesperson in a branch office is sued for damages by a buyer after the salesperson misrepresents a property. Who has the ultimate responsibility for the salesperson's actions?

1. the owner of the property
2. the supervising broker
3. the branch manager
4. the salesperson the supervising broker A seller's statement in a property disclosure document means
5. the owner is disclosing known latent defects.
6. nothing, because the seller will not be responsible for any defects.
7. the property is fully suitable for the uses contemplated by the buyer.
8. the owner creates a warranty that there are no defects in the property. the owner is disclosing known latent defects. When compiling a competitive market analysis, a broker would look for comparable properties that

1. were sold for all cash.
2. had been extensively advertised.
3. were offered by owner with no broker.
4. were located near the property being listed. were located near the property being listed. A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest
5. listing the property at the price the owner believes it is worth.
6. listing the property at least 30% above the current mortgage.
7. a competitive market analysis to determine the property's value.
8. setting the price at the value of the most recent sale in the neighborhood. a competitive market analysis to determine the property's value. 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?
9. The contract on the first house is not enforceable.

2. Neither contract is enforceable.
3. Only the first contract is valid.
4. Both contracts are valid. Both contracts are valid. Under the common law of agency, licensees owe the broker with whom they are associated all of the following duties EXCEPT
5. loyalty.
6. competence.
7. indemnification.
8. full disclosure. indemnification. 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
9. he is no longer the listing agent.
10. he will set up an appointment for showing the home.
11. he will leave the key under the door mat.
12. the house is currently off the market.

he is no longer the listing agent. 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

1. all homes are similar in size.
2. most homes are smaller than the sale home.
3. most homes are larger than the sale home.
4. most of the homes are rental properties. most homes are larger than the sale home. An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than
5. $100,000.
6. $250,000.
7. $500,000.
8. $1,000,000. $250,000. The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should

1. include the provision for the mortgage as the buyer requests.
2. suggest the buyer ask a lawyer to furnish the wording.
3. consult the supervising broker for advice.
4. refer the matter to the seller's agent. suggest the buyer ask a lawyer to furnish the wording. A licensee is listing a property in a known flood plain. The seller flatly denies that the structure and the property have ever been flooded. What is the licensee required to do in this situation?
5. Rely on the face value of seller's statement.
6. Inform the seller of potential legal consequences if this claim is untrue.
7. Inform the seller of the legal obligation to disclose facts regarding flood plains.
8. Refuse to list the property and explain to the seller that all properties in this area flood. Inform the seller of the legal obligation to disclose facts regarding flood plains. A deed restriction is applicable to the activities of
9. the current owner only.
10. all owners, present and future.

3. tenants.
4. mortgagors. all owners, present and future. To be valid, every deed must
5. contain a warranty.
6. include granting language.
7. be executed by the grantor.
8. be signed by the grantee if there are covenants. be executed by the grantor. 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
9. the builder.
10. the buyers.
11. the builder and the buyers.
12. neither the builder nor the buyers. the builder.

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

1. excuse herself from the discussion as this could constitute illegal blockbusting.
2. advise her friends this could constitute a violation of Sherman Antitrust Act.
3. listen carefully so she can be more competitive in the market.
4. be certain her company is charging as much as the others. advise her friends this could constitute a violation of Sherman Antitrust Act. 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?
5. The first mortgagee receives $60,000.
6. The second mortgagee receives $23,500.
7. The second mortgagee receives nothing unless he forced the foreclosure auction.
8. The former owner receives $4,500. The second mortgagee receives nothing unless he forced the foreclosure auction.

A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is

1. an independent contractor to the broker and an agent to the principal.
2. an agent to the broker and a subagent to the principal.
3. a subagent to the broker and an agent to the principal.
4. an agent to the broker and an agent to the principal. an agent to the broker and a subagent to the principal. 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,
5. will no longer lend or guarantee loans on these older properties.
6. require evidence of testing for and disclosure of any type of lead contamination before they will lend or guarantee loans on such properties.
7. require funds to be escrowed for lead abatement as a condition of lending or guaranteeing loans on such properties.
8. require the buyer to acknowledge disclosure of the presence of any known lead paint.

require the buyer to acknowledge disclosure of the presence of any known lead paint. For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

1. Mortgage loan interest, local property taxes, mortgage loan origination fees.
2. Mortgage loan interest, homeowner's insurance premium, local property taxes.
3. Cost of essential repairs, mortgage loan origination fees, local property taxes.
4. Homeowner's insurance premium, mortgage loan origination fees, mortgage loan interest. Mortgage loan interest, local property taxes, mortgage loan origination fees. A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when
5. any offer is delivered to the seller.
6. the seller accepts the offer.
7. all contingencies are removed.
8. the sale closes. the seller accepts the offer.

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 mortgage, what is the adjustment made at closing?

1. Credit seller $300; credit buyer $300.
2. Debit seller $300; debit buyer $300.
3. Credit seller $300; debit buyer $300.
4. Debit seller $300; credit buyer $300. Credit seller $300; debit buyer $300. Unrepresented buyers ask the licensee who listed the home whether they should order a property inspection as a part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to respond?
5. If you feel it is in your best interest, please do so.
6. Since I represent the seller I am not able to answer your question.
7. I am not aware of any issues that such an inspection would identify.
8. Since the seller has provided a property disclosure, there should be no need for any further inspection.

If you feel it is in your best interest, please do so. Which of the following consumers would be able to derive the most benefit from a reverse mortgage?

1. Any homeowner whose property is free of any mortgage encumbrance.
2. A young couple whose mortgage loan has a higher interest rate than the current rate for new loans.
3. A 65-year-old man who has recently bought a condominium with a conventional loan for 90 percent of the purchase price
4. A couple in their late 60?s who need to tap their home equity to help cover their expenses but do not want to sell their house. A couple in their late 60?s who need to tap their home equity to help cover their expenses but do not want to sell their house. 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
5. tell the seller not to disclose, because the statute of limitations has run out.
6. tell the seller to disclose the termite treatment on the property disclosure.
7. talk to neighbors to see if there are termites in the neighborhood.

4. talk to the planning and zoning department for local termite eradication ordinance. tell the seller to disclose the termite treatment on the property disclosure Ordinances that specify construction standards are
5. building codes.
6. building permits.
7. construction alterations.
8. certificates of occupancy. building codes. An Environmental Impact Statement (EIS)
9. summarizes the environmental impact of an existing project.
10. projects the impact on the environment of a proposed project.
11. is used primarily for state and Federally funded projects.
12. must be approved by all affected water districts. projects the impact on the environment of a proposed project. An owner lists his home and agrees to pay a 6% commission provided he nets $10,000 after paying the commission and the balance of his mortgage, which is $75,000. To the nearest dollar, what should the selling price be to net the owner his

$10,000?

1. $79,

2. $80,

3. $90,

4. $90,

$90,

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

1. a buy-sell agreement.
2. an option contract.
3. an installment contract.
4. a vendor's lien interest. an option contract. Which restrictive covenant would be considered illegal?
5. A covenant that is more restrictive than local zoning ordinances.
6. A restriction that is time-limited and expires after a stated period.

3. A covenant that restricts the type of building that may be constructed.
4. A covenant that restricts selected parcels within a defined subdivision. A covenant that restricts selected parcels within a defined subdivision. 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
5. steering.
6. blockbusting.
7. redlining.
8. conciliation. steering. An investment property returns 12% of its value or $21,000 annually. What is the value of the property?
9. $100,
10. $175,
11. $235,
12. $252,

$175,

Three people buy a house as tenants in common. Subsequently, two of the owners want to sell, but the third discourages each potential purchaser. The two owners who wish to sell the house can

1. sell without the third owner's consent.
2. file an action for partition against the third owner.
3. file for a lien against the third owner's interest as damages.
4. force the third owner to sell if they invoke the rule of specific performance. file an action for partition against the third owner. An agency relationship between a property owner and a property manager is usually created by
5. a management agreement.
6. payment of a management fee.
7. an exclusive agency agreement.
8. an independent contractor agreement. a management agreement. A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given

1. actual notice.
2. prescriptive notice.
3. constructive notice.
4. exculpatory notice. constructive notice. A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable?
5. The seller cannot write and sign with an "X".
6. The listing contract specifies that no other broker may show the house.
7. The seller is heavily under the influence of alcohol at the time of signing.
8. The listing contract specifies that a commission will be paid only if the house is sold within 3 weeks. The seller is heavily under the influence of alcohol at the time of signing. What is the duration of a home warranty's coverage?
9. the expected life of the purchaser
10. the expected life of the product or system covered
11. as disclosed in the contract that offers the warranty

4. a minimum of 5 years or the duration of the purchaser's ownership, whichever is shorter as disclosed in the contract that offers the warranty 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.
5. $225.00
6. $162.50
7. $150.00
8. $112.50 $225.00 If an older building cannot be air-conditioned, it is an example of
9. economic obsolescence.
10. functional obsolescence.
11. physical deterioration.
12. external deterioration. functional obsolescence.

A managing broker can be held responsible for

1. all actions of associated salespersons.
2. all real estate activities of salespersons.
3. only those real estate activities the broker is aware of.
4. no activities of independent contractors. all real estate activities of salespersons. A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to
5. confiscate the borrower's personal assets.
6. demand immediate payment of the entire note.
7. report the borrower to the Federal Housing Administration.
8. force the borrower to vacate the premises. demand immediate payment of the entire note. An example of a contract terminated due to inability to perform would be one in which the
9. purchaser had suffered financial reverses so that she could not make payment as required by the contract.

2. seller had died after the contract became binding but before the closing.
3. seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.
4. property had been severely damaged by fire after the contract became binding but before the closing. seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant. According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the
5. cash price or amount of the loan.
6. amount of down payment required.
7. number, amount, and frequency of payments.
8. prepayment penalties and rebates. prepayment penalties and rebates A competitive market analysis is MOST often used for
9. estate tax purposes.
10. setting a listing price.

3. divorce proceedings.
4. property tax assessment. setting a listing price. A competitive market analysis takes into consideration
5. square footage of the subject property.
6. neighborhood nuisances.
7. unemployment levels in the community.
8. age of the sellers. square footage of the subject property. Even after an offer has been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist on a mutual release?
9. The buyer finds a better property for better terms.
10. A title defect that will take months to clear is discovered.
11. A basement fire causes damage that requires extensive repairs.
12. The buyer is unable to obtain financing that meets the terms of the contract's financing contingency.

The buyer finds a better property for better terms. In MOST states, foreclosed property is sold through

1. sealed bids.
2. public auction.
3. deficiency judgment.
4. right of redemption. public auction. Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising?
5. "Nonsmoker preferred."
6. "Military discount."
7. "Seniors welcome."
8. "Catholics preferred." "Catholics preferred." A landlord may legally refuse to rent to a prospective tenant if the tenant
9. has a history of serious mental illness.
10. is unable to live alone without assistance.