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A comprehensive overview of the key topics and questions covered in the psi real estate salesperson test. It covers a wide range of real estate concepts, including property management agreements, listing agreements, lease agreements, multiple offers, buyer contingencies, seller disclosures, financing options, property ownership types, licensing requirements, and various real estate transactions and legal aspects. Structured in a question-and-answer format, allowing readers to test their knowledge and understanding of the material. It is an invaluable resource for individuals preparing to take the real estate salesperson exam, as it offers detailed explanations and accurate answers to the most common and important questions. Whether you are a aspiring real estate professional or simply interested in the field, this document can serve as a valuable study guide and reference material to help you succeed in the real estate industry.
Typology: Exams
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Which of the following is an example of a contract used often in the real estate business? a. Property management agreement b. Listing agreement c. Lease agreement d. All of these are contracts used in real estate
b. The offer is no longer up for negotiation between the parties. c. No other offers can be presented or accepted by the sellers. d. The offer is not yet a contract because Agent Jay's clients have not accepted it. - ANSWERS-D. THe offer is not yet a contract because of Agent Jay's clients have not accepted it. The Reeves's agent submitted an offer of $349,500 on a property priced at $365,000. The seller's agent informed the buyer's agent that the sellers have made a(n) _____ of $359, instead. a. Counteroffer b. Novation c. Appraisal d. Acceptance
Which of the following is NOT considered a common addenda form? a. Exclusive Right to Sell b. Financing addendum c. Mineral reservations d. Lead-based paint
d. Secondary market
b. A mobile home c. A condominium d. An industrial facility
A license holder must not prepare which of the following documents? a. Option agreements b. Title commitments c. Wills d. A license holder must not prepare any of these documents
a. Impaired b. Intelligent enough c. Competent d. Sane
a. Broker, agent b. Agent, broker c. Broker, broker d. Agent, agent - ANSWERS-c. broker, broker Regardless of representation, all buyers should be provided with a(n) _____ disclosure of representation at first contact. a. Oral b. Written c. Email d. Any of the above - ANSWERS-D. any of these The T-47 Affidavit must be signed in the presence of a _____. a. Broker b. Notary c. Surveyor d. TREC committee advisor - ANSWERS-B. Notary 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 - ANSWERS-prepayment penalties and rebates. Federal Truth-in-Lending laws are also known as - ANSWERS-Regulation Z. When a home is purchased using an ARM, the monthly loan payment on the mortgage will - ANSWERS-vary over the life of the loan depending on fluctuations in the interest rate to which the loan is referenced.
Which of these Federal laws regulates the advertisement of a lender's credit terms (rates, payment, etc.)? - ANSWERS-Regulation Z. When the sellers are lending part of the purchase price, they may secure the debt either with a deed of trust or a mortgage. For the seller, one benefit of the deed of trust is that - ANSWERS-foreclosure is usually simpler and faster. A broker and the buyers he represents are anxiously awaiting the closing on their new home. The closing is scheduled in 4 days. The buyers inform the broker that they just received revised Loan Estimate and Closing Disclosure forms from the lender, indicating the Annual Percentage Rate on their loan has increased by 0.3%. Based on the TILA-RESPA Integrated Disclosure rule, what action should the broker take in this situation? - ANSWERS- Confirm with the seller's broker, the lender and the closing entity that the closing must be delayed to allow for a new seven-day waiting period because of the interest rate revision. A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to - ANSWERS-demand immediate payment of the entire note. Under the common law of agency, licensees owe the broker with whom they are associated all of the following duties EXCEPT - ANSWERS-indemnification. 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 - ANSWERS-the builder. 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 - ANSWERS- tell the seller that the buyer will pay more. 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 - ANSWERS-he is no longer the listing agent. 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? - ANSWERS-disclosing the highest price the buyer is willing to pay. 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 - ANSWERS-an exclusive agency listing. 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? - ANSWERS-Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer. A salesperson lists a property with a contract that allows for sub agency and dual agency. The salesperson is - ANSWERS-an agent to the broker and a subagent to the principal. 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? - ANSWERS-Agency coupled with an interest. When a principal authorizes an agent to perform a particular act or transaction, it is an example of a - ANSWERS-special agency. State laws differ on whether a buyer is entitled to know about - ANSWERS-a suicide that occurred in the house last year. 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? - ANSWERS-Inform the seller of the legal obligation to disclose facts regarding flood plains. What critical aspect of the property inspection process MUST licensees convey to prospective buyers? - ANSWERS-Need for inspections to be completed within the time stated in the contract. 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 - ANSWERS-tell the seller to disclose the termite treatment on the property disclosure. A seller's statement in a property disclosure document means - ANSWERS-the owner is disclosing known latent defects. A contract for the sale of a home has been signed by both parties. This contract will remain executory until - ANSWERS-the transaction has closed. When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should - ANSWERS-have short deadlines. A seller signs a listing agreement with a broker. The seller can cancel the listing at any time without legal liability if - ANSWERS-the broker violates the terms of the contract. 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? - ANSWERS-The buyer finds a better property for better terms. 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 - ANSWERS-an option contract.
The sellers want to accept a purchase offer, but only if the price is raised by $5,000. What should they give the prospective buyer? - ANSWERS-Counteroffer. 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 - ANSWERS-the agreement does not comply with the Statute of Frauds. 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 - ANSWERS-void. 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 - ANSWERS- unilateral contract in which only Party A has made a promise to perform. A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable? - ANSWERS-The seller is heavily under the influence of alcohol at the time of signing. An example of a contract terminated due to inability to perform would be one in which the - ANSWERS-seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant. A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called - ANSWERS-a contract. 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? - ANSWERS-The buyer may sue the seller for specific performance.
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? - ANSWERS-Both contracts are valid. A gross lease can be best defined as one where the tenant pays, as a part of the rent, - ANSWERS-no operating expenses of the leased space. 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 - ANSWERS-constructive eviction. An exception to title insurance coverage is - ANSWERS-defects that clearly appear in the title search. Which of the following statements best describes the risk taken by NOT recording a deed? - ANSWERS-A subsequent purchaser's recorded deed could take precedence over any unrecorded instrument. In MOST states, foreclosed property is sold through - ANSWERS-public auction. To be valid, every deed must - ANSWERS-be executed by the grantor. 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? - ANSWERS- Debit seller $300; credit buyer $300. What is the duration of a home warranty's coverage? - ANSWERS-as disclosed in the contract that offers the warranty.
Earnest money should be deposited into a trust account - ANSWERS-in a timely manner, according to state laws. 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 - ANSWERS-steering. 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 - ANSWERS-misrepresentation. Antitrust laws prohibit competing brokers from all of the following EXCEPT - ANSWERS- receiving compensation from both the buyer and the seller. Failure of a real estate agent to comply with Fair Housing practices is punishable by - ANSWERS-license revocation and criminal prosecution. 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 - ANSWERS-advise her friends this could constitute a violation of Sherman Antitrust Act. A broker represents a group of investors who purchase single family residences when they can be found at very low prices. Their offers are typically made with $500 deposits and cash closings within 7 days of acceptance of the offers. When the last property closed, the investors suggested the broker keep the deposit money to be used for their next purchase, as yet not identified. What must the broker do with these deposit funds? - ANSWERS- Return them to the purchasers.
A landlord may legally refuse to rent to a prospective tenant if the tenant - ANSWERS-has ever been convicted of selling illegal drugs. Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising? - ANSWERS-"Catholics preferred." 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? - ANSWERS-No, because it is appropriate to show any property for which the buyer is qualified. An equal housing opportunity notice MUST be - ANSWERS-displayed in the brokerage office. A buyer wants to purchase a home for $160,000 with a 15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase? - ANSWERS-$26, An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000? - ANSWERS-$121, On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month. - ANSWERS-$ 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? - ANSWERS-$90,
Davis, Hernandez, and Moore are vested as tenants in common on a parcel of land. Each received a pro-rata undivided interest in the parcel. The total price was $120,000. Davis put up 40% and Hernandez put up $22,500. What percentage does Moore own (to the nearest tenth of a percent)? - ANSWERS-41.2% A lender will make an 80% loan-to-value loan on a property that is appraised for $72, 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? - ANSWERS-He needs an additional $1,250 in order to make the down payment. An investment property returns 12% of its value or $21,000 annually. What is the value of the property? - ANSWERS-$175, On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360- day year and a 30-day month. - ANSWERS-$ Legal descriptions using the government survey system are NOT generally used in - ANSWERS-the original 13 states. A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor? - ANSWERS-A license. A legal easement can be created by any of the following EXCEPT - ANSWERS-merger of the titles. An owner hired a construction company to build a swimming pool at a new home. The owner failed to pay the bill once the work was completed and the construction company filed a lien to obtain payment of the debt. The encumbrance created is called - ANSWERS-a mechanic's lien.
A tenant rented an apartment, signing a 15-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have? - ANSWERS-Tenancy at will. 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? - ANSWERS-Specify questionable items of property in the written sales contract. Ordinances that specify construction standards are - ANSWERS-building codes. If conditions for property use are included in a deed and these conditions are violated, what is the most severe potential penalty? - ANSWERS-A court may order the return of the property to the original owner. A deed restriction is applicable to the activities of - ANSWERS-present and future owners. An escheat occurs when - ANSWERS-a property owner dies without heirs or a valid will. All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the - ANSWERS-straight-line method. A formal appraisal will ALWAYS be REQUIRED when the - ANSWERS-lender wants to sell the mortgage to the secondary market. 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 - ANSWERS-most homes are larger than the sale home. Depreciation is calculated based on the - ANSWERS-cost of the building only.
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? - ANSWERS-The first sold. When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential? - ANSWERS-The original cost of the building. 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 - ANSWERS-commission sales. which of the following is not a stage in the appraisal process?
All loans subject to the Real Estate Settlement Procedures Act (RESPA) require lenders to :
regulation Z in the Truth-In-Lending Act provides which of the following penalties for licensees who willfully fail to comply with its advertising guidelines for real estate financing?