PSI REAL ESTATE SALESPERSON PRACTICE EXAM Questions and answers, 2022/2023.

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PSI REAL ESTATE SALESPERSON PRACTICE EXAM Questions and answers, 2022/2023. 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? 1. Difficulty of finding competent inspectors. 2. Appropriate fee splitting between inspectors and brokers. 3. Need for inspections to be completed within the time stated in the contract. 4. 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.) 1. $158,100 2. $158,300 3. $175,900 4. $176,100 - ✔✔$176,100 State laws differ on whether a buyer is entitled to know about 1. a suicide that occurred in the house last year. 2. possible lead paint in the property. 3. the flooding of the basement every spring. 4. 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? 1. An individual entrepreneur who owns several apartment buildings. 2. The Department of Housing and Urban Development. 3. The investment division of a bank. 4. 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 1. a bank or savings and loan association. 2. a mortgage company. 3. an investment group. 4. 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? 1. Apply the legal tests of a fixture. 2. Apply local court decisions dealing with similar items. 3. Specify questionable items of property in the written sales contract. 4. 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 1. the owner is disclosing known latent defects. 2. nothing, because the seller will not be responsible for any defects. 3. the property is fully suitable for the uses contemplated by the buyer. 4. 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 1. listing the property at the price the owner believes it is worth. 2. listing the property at least 30% above the current mortgage. 3. a competitive market analysis to determine the property's value. 4. 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? 1. 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 1. loyalty. 2. competence. 3. indemnification. 4. 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 1. he is no longer the listing agent. 2. he will set up an appointment for showing the home. 3. he will leave the key under the door mat. 4. 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 1. $100,000. 2. $250,000. 3. $500,000. 4. $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? 1. Rely on the face value of seller's statement. 2. Inform the seller of potential legal consequences if this claim is untrue. 3. Inform the seller of the legal obligation to disclose facts regarding flood plains. 4. 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 1. the current owner only. 2. all owners, present and future. 3. tenants. 4. mortgagors. - ✔✔all owners, present and future. To be valid, every deed must 1. contain a warranty. 2. include granting language. 3. be executed by the grantor. 4. 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 1. the builder. [Show More]

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