PSI national real estate exam practice test 1(solved)

All of the following would be considered real property EXCEPT - Answer- a leasehold estate The servient estate in an easement appurtenant is the property - Answer- on which the easement is placed Which of the following statements concerning encumbrances is NOT true - Answer- All encumbrances are liens Which of the following is NOT a specific lien - Answer- State inheritance taxes You have entered into a lease that requires you to pay 20% of the owners expenses. Your lease would be an example of a - Answer- net lease If a husband and wife own an apartment building and the husband owns an undivided three-fourths interest and the wife owns a one-fourth interest, what type of tenancy exists? - Answer- Tenancy in common The highest form of ownership interest a person may hold in real estate is - Answer- fee simple Two unrelated people own a three-unit apartment building as tenants in common. One wants to sell but the other does not which of the following statement describes the legal rights of the party who wants to sell? - Answer- The party may request a court to partition the building Your aunt died in-estate and you inherited her house, The way in which you acquired the title to her house is by - Answer- descent All of the following statements correctly describe a legal life estate EXCEPT - Answer- During his or her life estate, the life tenant is generally answerable to the holder of the future interest A time share estate isn't a - Answer- lease hold estate A state wants to build a publicity owned convention center to attract private development in its largest city. Can the state use eminent domain to acquire the land - Answer- Yes, if just compensation is paid to the owners of the land The city in which you live has a zoning ordinance. The basis for the city to have such an ordinance is - Answer- Police Power Police power-deed restriction - Answer- are not related Strict liability under Superfund means that... - Answer- the owner is responsible to the injured party without excuse All of the following correctly describes how real estate licensees should handle the possibility of hazardous substances on a property being sold EXCEPT - Answer- Licensees should not disclose the problem, becuase it might harm the seller Sources of groundwater contamination do NOT include - Answer- Radon your neighbor has given you revocable permissions to go hunting on his farm. You have a - Answer- license A claim based on adverse possession of property must NOT be - Answer- secretive A person who receives real property by will is called a - Answer- devisee Riparian rights would exist in a - Answer- cooperative on a river A developer was able to buy two adjoining single-family lots for $20,000 each. He combined the lots into one parcel with a value of $90,000. The developers action reflects the process of - Answer- plottage In the appraisal of a public building, an appraiser would use the - Answer- cost approach A restaurant opened in a neighborhood and was enjoying substantial profits. Within a year, another restaurant was built across the street and resulted in the first restaurant losing, in the next year 30% of its profits. This is an example of the principle of - Answer- competition A meatpacking plant has just been built one block from your house. The strong odors are lowering property values in your neighborhood. The loss in value would be classified as - Answer- external obsolescence A four-bedroom house with one bathroom would be an example of - Answer- functional obsolescence Which of the following is NOT a stage in the appraisal process - Answer- Analyze the tax consequences of the property owner An appraiser uses the cost approach in appraising a home. The appraiser should NOT use which of the following types of information - Answer- Depreciation of land A house that is the least expensive in its neighborhood has nevertheless grown significantly in value over the years because of an increasing number of larger, more expensive houses being built nearby. This growth in value is an example of the principle of - Answer- progression You are preparing a competitive market analysis on a house that you hope to list for sale. Which of the following approaches to value will be used in the development of estimated value? - Answer- Sales comparison approach A competitive market analysis reflects the use of the - Answer- sales-comparison approach First Bank holds a lien on a home on which Second Bank already had a lien. The lenders subsequently entered into an agreement in which First Bank moved into a first lien position. This is a example of a - Answer- Subordination agreement If the Federal Reserve Board raises its discount rate, which of the following is likely to occur? - Answer- Mortgage money will become less available You have a mortgage in which you make the same payment each month for principal and interest, with the principal payment increasing and the interest payment decreasing from month-to-month. This is called a - Answer- amortized mortgage Which agency is involved in purchasing government-related loans? - Answer- Ginnie Mae All of the following agencies are included in the secondary mortgage market EXCEPT - Answer- FHA All loans subject to the Real Estate Settlement Procedures Act (RESPA) require lenders to - Answer- deliver a settlement statement form to both buyer and seller You mortgaged your property and just made the final payment. Recording which of the following documents will provide notice that the mortgage lien has been removed - Answer- satisfaction of mortgage Salesperson Alvarez for broker Brooks has listed a home. Salesperson Cooke for broker Davidson is acting as a buyer's agent and is trying to sell the same home to his buyer. Salesperson Cooke is primarily responsible to - Answer- broker Davidson In MOST states, the listing broker has a fiduciary duty with - Answer- the principal A broker was employed by an owner, as an agent to sell her home. All of the following statements correctly describe the broker's relationship to the owner EXCEPT - Answer- the broker is the general agent You listed a home that was subsequently shown by six cooperating outside brokers. How many seller-agency relationships are involved in this transaction - Answer- One A salesperson listed a home for sale and transferred to another brokerage firm two weeks later. Which of the following statements describes the status of the listing? - Answer- The listing will stay with the former brokerage firm of the salesperson A salesperson presented an offer that was accepted and received an earnest money payments for $2,000. The salesperson should - Answer- give the earnest money to his broker You are working as a buyer's broker for a client. All of the following would describe your role as a buyer's broker EXCEPT - Answer- You should show the buyer properties only in which your commission is protected According to the law of agency, a real estate broker owes the principal all of the following duties EXCEPT - Answer- offering legal advice A broker acting as the agent of a seller - Answer- must report all offers to the principal unless instructed otherwise A broker listed a residential property under a valid written listing agreement. After the sale was completed, the owner refused to pay the broker's fee. Which of the following can the broker do? - Answer- She can take the seller to court and sue for the commission Commissions and fees paid by the seller to a listing agency are determined by - Answer- negotiations between the seller and the listing licensee A listing broker is considered to have earned a commission from a principal when which of the following events occur? - Answer- A "ready, willing, and able buyer" signs a non-contingent or cash offer that meets the terms of the listing contract A broker listed an owner's home and later received an offer from another licensee that met all of the listing terms and conditions. After considering the offer, the owner informed the broker that the owner no longer wished to sell and asked to be immediately released from the listing agreement. Which of the following statements BEST describes the brokers position in the situation? - Answer- The broker may succeed in collecting an earned commission from the owner On July 1 an owner and a salesperson entered into a six-month exclusive-right-to-sell agreement for residential property. On July 15, the owner rejected a low offer and fired the listing agent. On August 1, there was a house fire that required extensive kitchen repairs. On September 12, the owner entered into another exclusive-right-to-sell agreement with a salesperson from a different agency. January 1, the property was still unsold. On which date was the first listing agreement MOST likely to terminate and why - Answer- September 12, because the owner breached the first listing agreement by signing a second An option prior to being exercised, is an example of - Answer- a unilateral contract Which of the following is a similarity between an exclusive-right-to-sell listing and an exclusive-agency listing - Answer- Both give the responsibility of representing the seller to just one brokerage firm A buyer has entered into agency agreement with more than one buyers agent but only owes compensation to the one who puts an actual transaction together. This arrangement is known as a - Answer- nonexclusive agency agreement Which of the following types of clauses governs the right of a listing broker to collect a commission form a owner who waits until the listing period expires and then personally contracts to sell the property to a party the broker had shown the property to during the listing period - Answer- protection You wrote an offer on a house for $214,000. The seller gave you a counteroffer for $218,000. The seller may withdraw the counteroffer any time - Answer- prior to the buyer's acceptance You signed a lease for one year and took possession of an apartment. When the lease expired, you continued to live in the apartment without the owner's consent. Your tenancy would be considered to be an - Answer- tenancy at sufferance A commercial lease that allows rent to be increased or decreased periodically based on changes in economic indicators is a - Answer- index lease In theory, which of the following types of deeds gives a property buyer the MOST protection against problems that may arise with the title? - Answer- general warranty You have entered into an installment land contract for the sale of your home. Which of the following statements is FALSE - Answer- The buyer will hold legal title during the term of the contract Personal property is generally conveyed by a - Answer- bill of sale The movement of land caused by an earthqu