EXAM SAMPLE TEST - 2021 PSI GUIDE

Question 1

A farmer temporarily installs produce coolers in a leased farm stand in order to prevent spoilage. The coolers would be considered which of the following?

a. Trade fixtures that are real property.
b. Trade fixtures that are personal property.
c. Temporary real property.
d. Emblements.

Answer 1

b. Trade fixtures that are personal property.

Question 2

Property can be converted from real to personal property and from personal property to real property by means of which processes, respectively?

a. Assemblage and plottage.
b. Application and dissolution.
c. Severance and affixing.
d. Planting and harvesting.

Answer 2

c. Severance and affixing.

Question 3

The highest form of ownership interest one can acquire in real estate is the

a. legal life estate.
b. conventional life estate.
c. defeasible fee simple estate.
d. absolute fee simple estate.

Answer 3

d. absolute fee simple estate.

Question 4

The distinguishing feature of a defeasible fee simple estate is that

a. it can be passed on to heirs.
b. it has no restrictions on use.
c. the estate may revert to a grantor or heirs if the prescribed use changes.
d. it is of unlimited duration.

Answer 4

c. the estate may revert to a grantor or heirs if the prescribed use changes.

Question 5

Maria acquires a property from her uncle Alfonso. When Maria dies, the estate will pass to Alfonso’s other niece, Serena. The type of estate that Maria has in the property is a

a. conventional life estate.
b. legal life estate.
c. fee simple defeasible estate.
d. tenancy by the entireties.

Answer 5

a. conventional life estate.

Question 6

One difference between a cooperative estate and a condominium estate is that

a. a condominium owner owns a unit of air space whereas the co-op owner owns a proprietary lease.
b. a condominium sale adversely affects other unit owners.
c. the coop owner owns stock and a freehold real estate interest whereas the condominium owner simply a proprietary lease.
d. the condominium owner owns the common elements and the airspace whereas the coop owner only owns the apartment.

Answer 6

a. a condominium owner owns a unit of air space whereas the co-op owner owns a proprietary lease.

Question 7

Who are the essential parties involved in an estate in trust?

a. Owner, trustor and lawyer.
b. Owner, trustor and trustee.
c. Trustee, title company, and beneficiary.
d. Trustor, trustee and beneficiary.

Answer 7

d. Trustor, trustee and beneficiary.

Question 8

A condominium owner enjoys a

a. share in an association that owns one’s apartment.
b. tenancy in common interest in airspace and common areas of the property.
c. fee simple ownership of the airspace in a unit and an undivided share of the entire property’s common areas.
d. fee simple ownership of a pro rata share of the entire property.

Answer 8

c. fee simple ownership of the airspace in a unit and an undivided share of the entire property’s common areas.

Question 9

With various types of junior liens, the order of payment priority is generally established according to

a. the date of recordation.
b. what form of tax is in question.
c. the order of disbursement.
d. whether the lien was subordinated.

Answer 9

a. the date of recordation.

Question 10

What is a lien-theory state in contrast to a title-theory state?

a. A state in which liens are given priority over other encumbrances.
b. A state in which a mortgagor retains title to the property when a mortgage lien is created.
c. A state in which the holder of a mortgage lien receives title to the mortgaged property until the debt is satisfied.
d. A state in which liens must be recorded to be enforceable.

Answer 10

b. A state in which a mortgagor retains title to the property when a mortgage lien is created.

Question 11

A property owner has an easement appurtenant on her property. One day the property is sold to another party who is opposed to the easement. Following the closing, this particular form of easement

a. terminates.
b. transfers with the property.
c. transfers with the owner to a new property.
d. becomes a license on the property.

Answer 11

b. transfers with the property.

Question 12

What fundamental legal purpose is fulfilled by title records?

a. Keeping the county apprised of tax payments.
b. Preventing identity theft.
c. Giving constructive notice of one’s rights and interests in the property.
d. Assembling all relevant documents in a single place.

Answer 12

c. Giving constructive notice of one’s rights and interests in the property.

Question 13

What is “chain of title?”

a. The list of all parties who have ever owned real estate.
b. The bundle of rights linked to the recorded title to a parcel.
c. A chronology of successive owners of record of a parcel of real estate.
d. Involuntary conveyance of title by statutory rules of descent.

Answer 13

c. A chronology of successive owners of record of a parcel of real estate.

Question 14

Which of the following provides the strongest evidence of marketable title?

a. A general warranty deed.
b. A title certificate.
c. Title insurance.
d. An attorney’s opinion.

Answer 14

c. Title insurance.

Question 15

A store owner enters into a lease that charges rent per square foot, a common area fee, and a portion of the store owner’s gross income from the property. This kind of lease is a

a. triple charge, or triple net lease.
b. proprietors lease.
c. percentage lease.
d. retailer’s gross lease.

Answer 15

c. percentage lease.

Question 16

An owner leases a property to a business in exchange for rent. The tenant is required to pay all operating expenses as well. This is an example of a

a. proprietary lease.
b. percentage lease.
c. gross lease.
d. net lease.

Answer 16

d. net lease.

Question 17

A lease automatically terminates under which of the following circumstances?

a. The tenant fails to pay rent.
b. The leased property is foreclosed.
c. The tenant goes out of business.
d. The landlord cancels the lease.

Answer 17

b. The leased property is foreclosed.

Question 18

A county or municipal authority usually grants a certificate of occupancy for new construction only after

a. all contractors’ work has been inspected.
b. all work has been completed for at least sixty days.
c. the construction conforms to building codes.
d. the tax assessor has valued the improvement.

Answer 18

c. the construction conforms to building codes.

Question 19

A property owner is precluded by deed restriction from developing a thirty foot boat dock. The limitation prompts the owner to sell to another party. The new owner

a. is free to build the dock since the next door a. neighbor built a similar dock two weeks later.
b. takes title subject to the same restriction.
c. can build the dock with special permission from the zoning board.
d. may build, since the restriction is extinguished by the sale.

Answer 19

b. takes title subject to the same restriction.

Question 20

Emily sells Rycole a property containing a deed condition. The condition stipulates that the forested portion of the property must never be razed for development. Three months later, Rycole proceeds to harvest the trees and turn the area into an executive golf course. What recourse, if any, does Emily have under the deed condition?

a. She has the right to re-possess the property because the grantee has violated the condition.
b. The condition has ceased to apply because she allowed the violation to continue for a certain
period of time.
c. She can claim the proceeds from the harvested trees.
d. She can force Rycole to sell the property to a new owner who agrees to comply with the
condition.

Answer 20

a. She has the right to re-possess the property because the grantee has violated the condition.

Question 21

What is the essential purpose of legal descriptions of real property?

a. To create a consistent, unchanging standard for uniquely locating a property.
b. To enable courts and attorneys to calculate property size accurately.
c. To comply with common law for real property.
d. To eliminate cumbersome metes and bounds descriptions.

Answer 21

a. To create a consistent, unchanging standard for uniquely locating a property.

Question 22

Which of the following characterizes metes and bounds descriptions?

a. They use meridians and base lines.
b. They identify an enclosed area, beginning and ending at the same point.
c. They use lot and block numbers.
d. They incorporate elevation into the descriptions

Answer 22

b. They identify an enclosed area, beginning and ending at the same point.

Question 23

A buyer agrees to all terms of a seller’s offer except the length of time for a contingency to procure financing. The buyer extends the financing period in the offer by one week, signs the form, and mails it back to the seller. At this point, the seller’s offer

a. is void.
b. becomes an executory contract.
c. becomes a counteroffer.
d. has been accepted, since the modification was a contingency.

Answer 23

a. is void.

Question 24

Real estate contracts that are not personal service contracts

a. may be assigned.
b. are not assignable.
c. must be in writing.
d. are exempt from the statute of frauds

Answer 24

a. may be assigned.

Question 25

Which of the following contracts must be in writing to be enforceable? a. A parol contract. b. A six-month lease. c. A two-year lease. d. An executory contract

Answer 25

c. A two-year lease.

Question 26

Agent Bob, who works for Broker Bill, obtains an owner listing to lease a building. Bill's other agent, Sue, locates a tenant for Bob's listing. Broker Bill in this instance is a. an implied agent. b. a dual agent. c. a single agent. d. a subagent.

Answer 26

b. a dual agent.

Question 27

A transaction broker should disclose his or her agency relationship to prospective buyers and sellers a. upon first substantive communication. b. upon completion of the listing agreement. c. immediately following completion of any offer. d. immediately prior to closing

Answer 27

a. upon first substantive communication.

Question 28

A transaction facilitator in a residential transaction represents a. the seller. b. the buyer. c. both seller and buyer. d. neither seller nor buyer

Answer 28

d. neither seller nor buyer

Question 29

A principal instructs an agent to inform minority buyers that the property for lease was just leased an hour ago and is no longer available. The agent refuses to comply. In this case, a. the agent should exercise caution until the listing expires, then decline to renew it. b. the principal has proposed an illegal act, which should not be obeyed. c. the agent is liable for breaching the listing terms. d. the agent may sue the principal for discrimination and misrepresentation.

Answer 29

b. the principal has proposed an illegal act, which should not be obeyed.

Question 30

The amount of a real estate broker's commission is established by a. agreement among competing brokers. b. negotiation with clients. c. the local Board of Realtors®. d. state real estate license law

Answer 30

b. negotiation with clients.

Question 31

A client revokes an exclusive right-to-sell listing two months prior to expiration. The reason stated: the client is too busy to meet with the agent. In this case, a. the client is criminally liable for negligence. b. the client may be liable for a commission and marketing expenses. c. the agent can sue the client for specific performance, even if no customer had been located. d. the agent must accept the revocation without the possibility of damage recovery.

Answer 31

b. the client may be liable for a commission and marketing expenses.

Question 32

A protection period clause in an exclusive listing provides that a. the owner is protected from all liabilities arising from the agent's actions performed within the agent's scope of duties. b. the agent has a claim to a commission if the owner sells or leases to a party within a certain time following the listing's expiration. c. agents are entitled to extend a listing agreement's term if a transaction is imminent. d. an owner is not liable for a commission if a prospective customer delays in completing an acceptable offer.

Answer 32

b. the agent has a claim to a commission if the owner sells or leases to a party within a certain time following the listing's expiration.

Question 33

Real estate advertising must conform to regulatory standards and requirements. One requirement is a. a broker may only place blind ads in social media outlets. b. a broker must have all advertising approved by the local real estate board. c. the advertising must not be deceptive. d. sales agents may only advertise in their own name.

Answer 33

c. the advertising must not be deceptive.

Question 34

The three principal brokerage firms in a market agree to pay sales agents 15% more than any other competitor currently in practice. This is an example of a. collusion. b. price fixing. c. allocation of markets. d. steering

Answer 34

a. collusion.

Question 35

Two leading agencies jointly agree to raise commissions charged to residential sellers to 7.5% of the sales price. Which of the following is true? a. This is a perfectly legitimate business practice. b. The brokers have illegally fixed prices. c. The brokers have allocated markets. d. The brokers have engaged in legal collusion

Answer 35

b. The brokers have illegally fixed prices.

Question 36

A sale contract contains an open-ended financing contingency: if the buyer cannot obtain financing within a reasonable time, the deal is off. Six months later, the buyer still cannot secure financing. Which of the following is true? a. The seller may cancel the contract, since it can be ruled invalid. b. The buyer can continue indefinitely to seek financing, and the seller's property must remain off the market, since “reasonable” is not defined. c. The escrow agent is entitled to the buyer's deposit. d. The seller can force a lender to commit to a loan under fair financing laws

Answer 36

a. The seller may cancel the contract, since it can be ruled invalid.

Question 37

In the event of a buyer's default, a provision for liquidated damages in a sale contract enables a seller to a. sue the buyer for specific performance. b. force the buyer to quitclaim equitable title. c. sue the buyer for the broker's marketing expenses. d. claim the deposit as compensated damages for the buyer's failure to perform.

Answer 37

d. claim the deposit as compensated damages for the buyer's failure to perform.

Question 38

Which of the following is true of an option-to-buy agreement? a. The potential buyer, the optionee, is obligated to buy the property once the option agreement is completed. b. The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so. c. The contract can be executed at no cost to the optionee. d. It is a bilateral agreement.

Answer 38

b. The optionor must perform if the optionee takes the option, but the optionee is under no obligation to do so.

Question 39

If a manufacturer that is the major employer in a small city moves its operations to another city, it is reasonable to expect a. a fall in housing demand, but no other changes in the real estate market. b. a decline in demand for all types of real estate in the real estate market. c. an immediate fall in the demand for industrial real estate, but no other changes in the real estate market. d. an immediate decline in the prices for industrial and office real estate, but no impact on the residential market.

Answer 39

b. a decline in demand for all types of real estate in the real estate market.

Question 40

If a commercial real estate market is undersupplied, it is likely that a. rental prices in that market will fall. b. rental prices in that market will rise. c. rental prices will remain stable until equilibrium is reached. d. construction will increase to the point of equilibrium.

Answer 40

b. rental prices in that market will rise.

Question 41

The amount of available property that becomes occupied over a period of time is called a. vacancy. b. absorption. c. equilibrium. d. occupation

Answer 41

b. absorption.

Question 42

The roof of a property cost $20,000. The economic life of the roof is 20 years. Assuming the straight-line method of depreciation, what is the depreciated value of the roof after 3 years? a. $20,000. b. $17,000. c. $14,000. d. $3,000.

Answer 42

b. $17,000.

Question 43

The income capitalization approach to appraising value is most applicable for which of the following property types? a. Single family homes. b. Apartment buildings. c. Undeveloped land. d. Churches.

Answer 43

b. Apartment buildings.

Question 44

In the income capitalization approach, an appraiser a. estimates gross income and multiplies times the gross income multiplier. b. estimates effective income, subtracts tax, and applies a capitalization rate. c. estimates net income and applies a capitalization rate to it. d. estimates potential income and applies a capitalization rate to it.

Answer 44

c. estimates net income and applies a capitalization rate to it.

Question 45

Net operating income is equal to a. potential income minus expenses minus debt service. b. effective gross income minus potential income. c. potential gross income minus vacancy and credit loss minus expenses. d. effective gross income minus vacancy and credit loss.

Answer 45

c. potential gross income minus vacancy and credit loss minus expenses.

Question 46

If net income on a property is $40,000 and the cap rate is 10%, the value of the property using the income capitalization method is a. $100,000. b. $400,000. c. $1,000,000. d. $4,000,000.

Answer 46

b. $400,000.

Question 47

The key feature of an adjustable mortgage loan is that a. the interest rate may vary. b. the monthly payment increases over the life of the loan. c. the principal balance does not amortize. d. the loan term can be shortened or lengthened

Answer 47

a. the interest rate may vary.

Question 48

Why is a wraparound mortgage loan potentially interesting to a home seller as an investment? a. It is a senior loan that can be easily subordinated for additional debt. b. A wraparound lender can profit when the interest rate of the wraparound exceeds that of the underlying mortgage. c. The underlying loan is retired early. d. The second mortgage borrower may make payments directly to the first mortgage lender.

Answer 48

b. A wraparound lender can profit when the interest rate of the wraparound exceeds that of the underlying mortgage.

Question 49

A builder is required to secure a loan with mortgages on three properties. This is an example of a. a participation mortgage loan. b. a blanket mortgage loan. c. a permanent mortgage loan. d. a bridge loan.

Answer 49

b. a blanket mortgage loan.

Question 50

Which of the following is true of a loan with negative amortization? a. The interest rate on the loan increases as the principal balance decreases. b. Payments are not sufficient to retire the loan. c. The loan balance is diminishing, or going negative. d. Additional interest is being added to the monthly payment.

Answer 50

b. Payments are not sufficient to retire the loan.

Question 51

The loan-to-value ratio is used as an underwriting mechanism because a. the LTV determines the profitability of the loan. b. the loan amount needs to be less than the property's value. c. borrowers tend to inflate the true value of the property. d. a full-price loan overfinances the borrower.

Answer 51

b. the loan amount needs to be less than the property's value.

Question 52

In the past, borrowers were often surprised by unexpected or undisclosed borrowing fees and expenses at closing. This phenomenon has been largely corrected through disclosure requirements mandated by which of the following laws? a. Equal Credit Opportunity Act b. Truth-in-Lending laws c. National Disclosure Procedures Act d. Federal Fair Housing Laws

Answer 52

b. Truth-in-Lending laws

Question 53

Which of the following is an important function of the secondary mortgage market? a. Participants borrow funds from banks so the banks can make more loans. b. Participants issue tax certificates and sell them to primary lenders. c. Participants purchase pools of defaulted loans from lenders to keep them solvent. d. Participants sell mortgage-backed securities in order to buy pools of loans.

Answer 53

d. Participants sell mortgage-backed securities in order to buy pools of loans.

Question 54

Cash flow is a measure of how much pre-tax or after-tax cash an investment property generates. To derive cash flow it is therefore necessary to exclude a. cost recovery expense. b. interest expense. c. loan principal payments. d. net operating income.

Answer 54

a. cost recovery expense.

Question 55

The method for deriving an investor’s return on investment, or ROI, is by a. dividing net operating income by cash flow. b. multiplying the required yield times after-tax cash flow. c. dividing net income by the price paid for the property. d. multiplying cash flow times the price paid for the property

Answer 55

c. dividing net income by the price paid for the property.

Question 56

Which of the following items would affect a homeowner's adjusted basis? a. Installing a higher capacity air conditioning and purifying system. b. Replacing a washing machine. c. Stripping and staining hardwood floors. d. Replacing a broken picture window

Answer 56

a. Installing a higher capacity air conditioning and purifying system.

Question 57

Which of the following is true with respect to real property taxation by the federal government? a. It imposes ad valorem property taxes and capital gain tax. b. It may not impose property taxes or tax liens. c. There are no federal ad valorem taxes on real property. d. It imposes ad valorem tax, but not capital gain tax.

Answer 57

c. There are no federal ad valorem taxes on real property.

Question 58

Ad valorem taxes are based on a. the replacement value of property. b. the assessed value of property. c. the millage value of property. d. the broker's estimate of value.

Answer 58

b. the assessed value of property.

Question 59

A retirement facility prohibits ownership of any unit by persons under 55 years of age. The association claims it has made the prohibition properly. Which of the following is true? a. They are violating the Civil Rights Act of 1866. b. They are violating the Fair Housing Amendments Act of 1988. c. They are guilty of age discrimination. d. The prohibition may be legal if performed correctly.

Answer 59

d. The prohibition may be legal if performed correctly.

Question 60

An agent receives a full-price offer from a minority party. The agent presents the offer to the seller and discloses the buyer’s minority status. The seller at that point instructs the agent to inform the buyer that the property has just gone under contract. The agent duly complies, telling the offeror that the home has just been temporarily removed from the market and is unavailable – but may be available soon if the contract falls through. Which party or parties, if any, have violated fair housing laws? a. The agent only. b. The owner only. c. The agent and the owner. d. Neither agent nor owner

Answer 60

c. The agent and the owner.

Question 61

Which of the following are examples of closing items not prorated between buyer and seller? a. Taxes. b. Inspection fees. c. Utilities. d. Condominium assessments.

Answer 61

b. Inspection fees.

Question 62

Which of the following activities is not allowed under the Real Estate Settlements and Procedures Act? a. A broker having any business relationship with an insurance company that is involved in the broker's transaction. b. A broker pre-qualifying a buyer for a mortgage loan. c. A lender requiring a deposit from a borrower for a tax and insurance escrow account. d. A lender paying a fee to a broker for referring a borrower to the lender.

Answer 62

d. A lender paying a fee to a broker for referring a borrower to the lender.

Question 63

Which of the following communication records must (as opposed to should) be kept? a. Notes on every conversation. b. Copies of required communications to principals. c. Notes from company training sessions. d. Business cards of licensees one meets at open houses.

Answer 63

b. Copies of required communications to principals.

Question 64

To minimize the risk of violating fair housing laws, a licensee should a. refuse to use terms that refer to or describe any of the classes of persons protected by the laws. b. avoid working in neighborhoods that are predominantly occupied by a single ethnic group. c. make discriminatory or derogatory remarks in conversation only, never in writing. d. give better service to members of a protected class than is standard for other clients or customers.

Answer 64

a. refuse to use terms that refer to or describe any of the classes of persons protected by the laws.

Question 65

What are “tenant improvements?” a. Modifications to a rental suite to conform to a tenant’s usage specifications b. Marketing programs that yield a higher quality of tenant c. Increased revenue resulting from a rise in rental rates d. Increased occupancy resulting from a population increase in the market area

Answer 65

a. Modifications to a rental suite to conform to a tenant’s usage specifications

Question 66

For the proper handling of client and owner monies, a property manager is generally required to a. deposit all funds every month in the management firm’s central operating account. b. employ a notary to witness and record every deposit or payment received. c. maintain a special trust account in a qualified financial depository. d. disburse all funds to their legal owners on a weekly basis.

Answer 66

c. maintain a special trust account in a qualified financial depository.

Question 67

Jennifer advised her clients they needed to paint their living room before showing the property. The walls of these rooms were all 8’ high. The wall lengths were 14’, 18’, 16’, and 18’. If a gallon of paint covers 200 SF, how many whole gallons would the home sellers have to buy? a. 1 b. 2 c. 3 d. 6

Answer 67

c. 3

Question 68

An investor just purchased a rectangular 2-acre retail lot for $250 a frontage foot. If she paid $100,000 total, what was the depth of the lot? a. 400’ b. 250 c. 871’ d. 218’

Answer 68

d. 218’

Question 69

Andra can afford to spend $5,000 in closing costs to refinance her home. The lender quotes closing costs of $800 plus 2 points. The house appraised out at $240,000, and she can get an 80% loan. Can Annika afford to refinance? a. No, she is short by $64. b. No, she is short by $1,600. c. Yes, with $360 left over. d. Yes, she in fact breaks even

Answer 69

c. Yes, with $360 left over.

Question 70

A lender offers an investor a maximum 70% LTV loan on the appraised value of a property. If the investor pays $230,000 for the property, and this is 15% more than the appraised value, how much will the investor have to pay as a down payment? a. $93,150 b. $79,350 c. $90,000 d. $69,000

Answer 70

c. $90,000

Question 71

A house is being appraised using the sales comparison approach. The house has three bedrooms, two bathrooms, and a patio. The appraiser selects a comparable house that has three bedrooms, 2.5 bathrooms, and no patio. The comparable house just sold for $100,000. A half-bath is valued at $5,000, and a patio at $1,000. Assuming all else is equal, what is the adjusted value of the comparable? a. $100,000 b. $104,000 c. $96,000 d. $106,000

Answer 71

c. $96,000

Question 72

A family purchased a $90,000 lot to build a custom home. At the date of closing, the lot was assessed at $84,550 and the tax rate was $1.91 / $100 assessed valuation. When they completed the home, the assessment increased by $235,000 to include the new construction. If the monthly tax escrow is based on the assessed value, what will the monthly tax escrow be? a. $517 b. $6096 c. $508 d. $367

Answer 72

c. $508

Question 73

The James family purchased a home for $180,000 five years ago and obtained an 80% LTV loan. Now the property has appreciated 25%. In addition, the loan has been paid down $11,000. What is the James’s current equity in the home? a. $47,000 b. $81,000 c. $45,000 d. $92,000

Answer 73

d. $92,000

Question 74

George and Mary have owned a rental house for 10 years. They bought it for $240,000 and estimated the land value @ 25%. If the property is depreciated on a 39-year schedule, and appreciation totals 50% over the period, what is their gain if they sell the property today? a. $159,230 b. $166,150 c. $181,538 d. $120,000

Answer 74

b. $166,150

Question 75

Adelpha’s home is valued at $250,000. She has insurance coverage of $160,000 with an 80% co-insurance clause. If Adelpha has a damage claim amounting to $100,000, how much will she receive from her policy? a. $32,000 b. $60,000 c. $80,000 d. $100,000

Answer 75

c. $80,000

Question 76

Who serves as the Chairperson of the Washington State Real Estate Commission? a. Director of the DOL b. Attorney General c. Commissioner elected by the other Commissioners d. Appointed by the Governor

Answer 76

a. Director of the DOL

Question 77

Real Estate licenses in the state of Washington are issued by the a. Real Estate Commission b. DOL c. Division of Real Estate d. Department of Real Estate

Answer 77

b. DOL

Question 78

An investigation of alleged misconduct by a real estate license is conducted by the a. Attorney General. b. Real Estate Commission. c. DOL. d. Superior Court.

Answer 78

c. DOL.

Question 79

The DOL may issue a cease order if someone has been found guilty of a. mishandling trust funds. b. practicing as a real estate broker without a license. c. incompetence that results in harm to someone else. d. false or deceptive advertising.

Answer 79

b. practicing as a real estate broker without a license.

Question 80

Which of the following does NOT require a real estate license? a. issuing a broker price opinion for a fee b. performing property management services for an agreed fee c. performing real estate services without compensation or the expectation of compensation d. designated agent.

Answer 80

c. performing real estate services without compensation or the expectation of compensation

Question 81

A managing broker license requires at least a. an 8th grade diploma or the equivalent. b. a high school diploma or the equivalent. c. 2 year college degree or the equivalent. d. 4 year college degree or the equivalent.

Answer 81

b. a high school diploma or the equivalent.

Question 82

A real estate firm must a. designate a broker to be the firm’s managing broker. b. have at least 1 branch office. c. designate a broker as the firm’s designated broker. d. designate a managing broker as the firm’s designated broker.

Answer 82

d. designate a managing broker as the firm’s designated broker.

Question 83

A designated broker may delegate certain responsibilities to a. a broker. b. office staff. c. the office manager. d. a managing broker.

Answer 83

d. a managing broker.

Question 84

A real estate firm may be paid by more than one party if a. all parties agree, in writing, before an offer is signed. b. all parties agree, in writing, before the transaction closes. c. the arrangement is kept confidential. d. the designated broker agrees.

Answer 84

a. all parties agree, in writing, before an offer is signed.

Question 85

If a real estate licensee exercises control over any transaction funds, those funds a. belong to the seller. b. are considered trust funds. c. belong to the buyer. d. belong jointly to the seller and buyer.

Answer 85

b. are considered trust funds.

Question 86

Interest that accrues on a firm’s trust account must be paid to the a. client. b. Secretary of State. c. the State Treasurer. d. DOL.

Answer 86

c. the State Treasurer.

Question 87

If funds in a firm’s trust account are claimed by more than one party, the designated broker must give all parties notice of the intended distribution and distribute the funds within a. 5 days. b. 10 days. c. 15 days. d. 30 days.

Answer 87

d. 30 days.

Question 88

Which of the following is NOT a record a real estate firm is required to keep? a. Notes of telephone conversations b. Log of all agreements and contracts for brokerage services c. A copy of all contracts for brokerage services d. A folder with all real estate related contracts

Answer 88

a. Notes of telephone conversations

Question 89

Which of the following is TRUE regarding records that must be kept by licensees? a. Licensees have privacy rights in the records they must keep for 1 year after termination of the agency relationship. b. Licensees have privacy rights in the records they must keep for 3 years after termination of the agency relationship. c. Licensees have privacy rights in the records they must keep as specified by their designated broker. d. Licensees have no privacy rights in the records they must keep.

Answer 89

d. Licensees have no privacy rights in the records they must keep.

Question 90

When different brokers with the same firm represent different parties, which licensees are dual agents? a. The designated broker, managing broker, and the individual brokers b. The designated broker and managing broker c. The designated broker d. The managing broker

Answer 90

b. The designated broker and managing broker

Question 91

An “agent” is defined by Washington real estate law as a broker who a. has performed real estate services for a buyer or seller. b. has been retained by a real estate firm to perform real estate services on behalf of the firm. c. has entered an agency relationship with a buyer or seller. d. has entered an independent contractor agreement with a real estate firm.

Answer 91

c. has entered an agency relationship with a buyer or seller.

Question 92

Which of the following is NOT a material fact? a. Information that substantially adversely affects the value of the property b. Information that substantially adversely affects a party's ability to perform its obligations c. That the property was the site of a violent crime d. Information that operates to materially impair or defeat the purpose of the transaction

Answer 92

c. That the property was the site of a violent crime

Question 93

To whom does a broker owe a duty to exercise reasonable skill and care? a. To all parties to whom the broker renders real estate brokerage services b. Only to a party with whom the broker has entered an agency relationship c. Only to the broker’s managing broker d. Only to the broker’s designated broker

Answer 93

a. To all parties to whom the broker renders real estate brokerage services

Question 94

Unless otherwise agreed a broker does NOT owe a duty to a. exercise reasonable skill and care. b. conduct an independent investigation of either party's financial condition. c. honestly and in good faith. d. present all offers

Answer 94

b. conduct an independent investigation of either party's financial condition.

Question 95

Does a dual agent owe a duty of loyalty to the buyer and seller? a. Yes b. To the seller, but not the buyer c. To the buyer but not the seller d. No, but a dual agent must take no action that is adverse or detrimental to either party’s interest.

Answer 95

d. No, but a dual agent must take no action that is adverse or detrimental to either party’s interest.

Question 96

A pamphlet on “The Law of Real Estate Agency” must be given to a party to a transaction a. before the party consents to dual agency. b. before the party enters a purchase contract. c. at the first substantial contact with the party. d. before a transaction closes.

Answer 96

a. before the party consents to dual agency.

Question 97

Which of the following duties of a broker survives the termination of the agency relationship? a. The duty exercise reasonable skill and care b. The duty to account for money and property received c. The duty to deal honestly and in good faith d. The duty to disclose all existing material facts known by the broker

Answer 97

b. The duty to account for money and property received

Question 98

The “Agency Disclosure” that must be given to all parties a. discloses who the broker represents. b. provides a summary of real estate agency law. c. explains the responsibilities of a designated broker, managing broker, and broker. d. explains the authority of the DOL.

Answer 98

a. discloses who the broker represents.

Question 99

A residential landlord must provide a tenant with information a. regarding the hazards of radon. b. regarding fire safety and protection. c. regarding asbestos. d. noxious weeds.

Answer 99

b. regarding fire safety and protection.

Question 100

A residential tenant with a physical disability a. is allowed, at the landlord’s expense, to make modifications to the premises. b. is allowed, at the tenant’s expense, to make modifications to the premises. c. is allowed, at the landlord and tenant’s shared expense, to make modifications to the premises. d. is not allowed to make modifications to the premises.

Answer 100

b. is allowed, at the tenant’s expense, to make modifications to the premises.

Question 101

Which of the following is permitted by Washington’s Law Against Discrimination? a. Refusal to rent to someone because the person has a sensory or mental disability b. Refusal to sell property to someone because of that person’s age. c. Refusal to rent to someone who belongs to a racial minority because the person cannot afford the rent d. Refusal to rent to a couple because they are not married

Answer 101

c. Refusal to rent to someone who belongs to a racial minority because the person cannot afford the rent