PSI PA Real Estate Practice Exam Flashcards

PSI PA Real Estate Practice Exam Flashcards 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 tell the seller that the buyer will pay more.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?Agency coupled with an interest.The economic characteristics of land are scarcity, location, and durability In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers?One.A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when the seller accepts the offer.Real property can be converted to personal property byseverance.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 an option contract.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?Debit seller $300; credit buyer $300.During the listing presentation, the seller questions the amount of commission to be paid and is told the amount of commission is negotiable.If conditions for purchase are included in a deed and these conditions are violated, what is the penalty?Return of the property to the original owner.When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential?The original cost of the building.An agreement to purchase that has NOT yet closed isan executory contract.The PRIMARY purpose of zoning ordinances is to implement a local master plan Antitrust laws prohibit competing brokers from all of the following EXCEPT receiving compensation from both the buyer and the seller.Too much leverage may result innegative cash flow.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 tell the seller to disclose the termite treatment on the property disclosure.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?The buyer may sue the seller for specific performance.What type of map is MOST useful for describing the terrain of a very hilly lot?Contour map.

A lawsuit for inverse condemnation may be brought bya homeowner Ownership of common stock in a corporation gives an interest that is classified as personal property.A major difference between freehold and nonfreehold estates is that all freehold estates are of indeterminable duration An Environmental Impact Statement (EIS)projects the impact on the environment of a proposed project.A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease terms?No notice is required.Which of the following approaches MOST reliably estimates the sales price of a single-family residence?Market data The FHA functions MOST likean insurance company.The purpose of requiring an earnest money deposit in a real estate sales contract is to provide evidence of the buyer's intention to carry out the contract.In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT more variety of loan programs available.Which of the following events would AUTOMATICALLY cancel a listing agreement?Property owner's death.Two buyers bought a house with a $178,000 mortgage.The interest rate is 6 1/2% per annum payable for 30 years.To the nearest dollar, what is their monthly principal and interest payment? (BE SURE TO USE THE

AMORTIZATION TABLE.)

$1,125

A commercial property lost value because a recently constructed highway moved traffic away from the property.This is an example of economic or external obsolescence.Regulation Z addresses all of the following issues EXCEPTusury.All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the straight-line method 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?None of the above.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?Both contracts are valid.

The purpose of usury laws is to regulate interest rates charged by lenders.MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and the sale price.The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing?Credit buyer $110,000; debit seller $110,000.At the time of harvest, crops that require annual planting are generally considered to be personal property An agency relationship between a property owner and a property manager is usually created by a management agreement.When someone has living heirs but dies without leaving a will, the estate is distributed according to the statute of descent.A prospective buyer made an offer to purchase a property.The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if the owner withdraws the counteroffer before it is accepted.Earnest money should be deposited into a trust accountin a timely manner, according to state laws.The document used in a real estate sale that establishes the legal rights of the buyer and seller is the purchase contract.Which of the following is the first action to take when mold problems are found?Identify and remedy the cause of the problems.A property owner died, having willed his property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through escheat A deed restriction is applicable to the activities ofall owners, present and future When a principal authorizes an agent to perform a particular act or transaction, it is an example of a special agency.A major reason for buying and owning a condominium rather than a detached single-family home is that a condominium tends to be more affordable.The real estate broker who is listing a house for sale should personally verify the number of square feet in the building.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?Tenancy at will.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, require the buyer to acknowledge disclosure of the presence of any known lead paint.An environmental impact statement typically describes the effects of a proposed on factors such as public health and safety An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than

$250,000