PSI EXAM Flashcards
A purchase contract required that the property be free of tenants when the property conveyance occurred. On the day of closing, the tenants were still living in the property. Who is responsible for ensuring that the tenants vacated the property prior closing?
The Seller
A real estate broker enters into an agreement to represent to a buyer who is seeking a property to purchase and remains a single agent throughout the transaction. A seller with whom this broker negotiates is this brokers?
Customer
An investor has come to the broker because he may be interested in selling one of his residential properties. His family has owned the eight unit building for several years and have kept accurate records of income expenses. The investor brings out a file of lavish improvements that he has completed inside each of the units, including granite counters, top of the line appliances and marble floors. He has no idea what the property is worth and has asked the broker to tell him what his potential profit will be before he guess to list it. In this situation what is most important for the broker to explore before counseling the investors and putting his units on the market?
Explain that he will develop his opinion of valve by using the income approach and that the investors may not be able to recover all the cost of his improvements.
A broker has a listing agreement to deliver to his out of town, to properly secure this listing the agreement
May be in electronic format.
Working to convince a potential buyer that a single family house near a university could be converted to student housing, broker guarantees the buyer a substantial profit. Such a guarantee
Constitutes failure to engage in competent practice under the real estate rules and regulations.
A recently widowed farm owner has called a broker to list a one acre building site in order to raise the money to pay the property taxes. How should the broker proceed?
Contact the municipality to determine if this is possible, an then have surveyor prepare the description.
A listing broker has recently sold a house to an investor. Prior to making an offer, the investor told the broker he planned to turn the large property into apartments. It was around many multi family properties. The buyer has now discovered that the other properties are non confirming, and that the area is zoned single family. The broker
Should have advised the buyer to check the zoning in the area before purchasing property
A real estate professional working with a buyer has disclosed the options for representation under the state law but has not signed a buyer representation agreement and considers that buyer a customer. While showing the buyer a property, which of the following statements by the professional could create implied agency in a jurisdiction where the common law of agency prevails ?
“You should offer $20,000 less than the asking price due to repairs needed on the property.”
A seller is unhappy with the effort being put forth by the listing broker and wishes to terminate the listing and relist wit a different broker. How should the broker advise the seller?
Tell the seller to ask the listing broker to agree to terminate the listing. Agency is a bilateral relationship which may be terminated by mutual agreement.
Seller A entered into an option contract with buyer B. The contract allowed for a price of $200,000 which seller A will honor for 12 month period exclusively for buyer B. This would be an example of
Bilateral contract where both parties have an obligation to perform
A licensee representing a seller has which of the following duties?
Advising the seller to obtain advice about material matte beyond the licensee’s expertise.
A licensee representing a seller has which of the following duties?
Advising the seller to obtain advice about material matte beyond the licensee’s expertise.
A broker hires an inactive broker to conduct open houses. Which of the following statements about this situation is Correct?
The broker may face disciplinary action for incompetent practice
A property is listed at $450,000 and the pre qualified buyer believes no additional financing will be needed. The buyer is then notified the property is encumbered with $30,000 mortgage. The buyers agent advises his buyer to assume equity by paying the $30,000 mortgage. The sales contract with no mention of existing mortgage terms. The closing statement reflects the price of the property at $450,000 with a credit for $30,000 mortgage. The deed to the buyer was exempt and the loan did not fund. When the mortgage debt was not paid, the mortgage foreclosed. Who is liable for the foreclosure?
Buyer
Which of the following is a feature of a quitclaim deed?
It need not contain warranties
A broker has listed a property for $225,000. An offer of $210,000 contingent upon inspection comes in the first week and the seller accepts it. Another offer of $205,000 comes in the second week. The seller accepts it as a secondary offer contingent upon the termination of the first offer. The first offeror demands the seller spends $5000 in repairs before going through with the purchase. The seller may do all of the following except?
Ignore the demand and sell the property to the second offeror
The buyer gave the broker an earnest money deposit of $5,000. As closing was approaching the buyer discovered he needed $2,000 back in order to pay a charge card and get his debt to income ratio where it needed to be to obtain the loan. The broker wrote to him a check for $2,000 from the trust account. Is this acceptable, Ann why or why not?
Yes, because this practice would be permissible with the seller and the buyers written permission.
A potential buyer seems to be very knowledgeable about home purchases, and decides not to require an inspection, hoping that the lack of an inspection contingency will help to convince the seller that his offer is the best deal. The buyers broker has noticed a few things that have raised his concerns about the condition of the house. What responsibility if any, does the buyers agent have in this situation ?
The agent should explain his concerns to the buyer and work to persuade the buyer include an inspection contingency.
An associated licensee has decided to disclose latent defects in properties he list for the brokerage firm only if a buyer makes a specific inquiry. The broker in charge has never discussed this issue with the licensee and does not require any reporting from associated licenseees because they are independent contractors. When the licensing board investigates complaints arising from this practice they are likely to find the broker in charge
Share the liability for this licensee’s wrongdoing
The current real estate market has been booming for the last 5 years and there is still demand for properties, though the market has slowed for both rental and sale analysis of the areas job market shows a rise in unemployment and stagnant wages, though living costs are still rising. For the last few years the area has welcomed influx of new residents but this has almost stopped as job opportunities decline. A real estate broker has been asked by a homeowner whether to sell now or wait until market goes higher in the net year or two. Give the facts, what courts of action would a prudent professional recommend to the seller?
Selling the property now, as the market appears likely to adjust downward.
Buyer Jim signs a purchase contract at the asking price with no contingencies and the 30 day closing date as specified by the seller. Seller Tom changes the contract closing date of 40 days and signed the contract. This contract in its present form is?
Invalid since the signed documents do not yet indicated mutually agreed upon terms
A real estate brokerage advertises specifically for buyer who wish to purchase using VA loans. Do these advertisements violate veterans rights or the advertising rules of the federal fair housing act?
No, because veterans from all protected classes can qualify for VA loans
A salesperson represents the seller of a commercial property. The salesperson tells the buyer a new highway exit ramp will be built within six months to give access to the property although that is only one of the several possibilities being considered by local planers. The exit ramp is subsequently located elsewhere. Could the salesperson be liable to the buyer for the statement about the ramp?
Yes, the statement was material misrepresentation
The buyer was given a loan estimate at the time of the application for the mortgage and it is now 3 business days before the closing. The appraisal and the closing disclosure have been given to the buyer. The buyers broker meets her client at the property for a walkthrough and to review the documents. Which of the following occurrences will result in the buyer having the right to an additional 3 days to review the documents ?
The loan product as changed from a fixed rate to one that is adjustable
Which of the following are most likely to be addressed by building codes?
Construction standards
A licensee Is the property manager for a shopping center. The shopping center owner tells the licensee to avoid internet marketing because he distrusts the technology. The licensee discuss this with the owner, but eventually complies. The licenses compliance Is due to the duty of?
Obedience
A feature of joint tenancy with a survivorship is that?
The surviving joint tenants acquire the property free and clear of any liens against the deceased
An appraisal made by a certified appraiser is required
When the buyer is using an FHA loan to purchase
A statement “ A contract for the transfer of an interest in land must be in writing. Best defines which of the following real estates concepts?
Statue of Frauds
To participate in a referral service, a broker company must
Have a written agreement with the cooperating broker
Jon sells a property for $80,000 and earns a 3% commission. Jon obtained the sales for this transaction based on a co brokerage agreement referral for a 50/50 split. Jon works under a managing broker who is owed 40%. How much did Jons managing broker earn from this transaction?
$4800
Neighbor A has a property adjoining to neighbor B. Neighbor A has been driving across the yard of neighbor B for the past 8 years to access his property even though there Is direct access to his property. The common principle created is
An easement by prescription
A sellers agent is contacted by a potential buyer whose financial status is questionable. When asked to write an offer, the agent should
Relay any reservations to the seller
Buyer and seller enter into a contract. The buyer refuses to purchase for a reason not to excused by a contingency. Which statement is correct?
The seller has the right to terminate the contract and keep the earnest money deposit
A buyer is purchasing a bank owned property. The broker explains the type Of deed she will be receiving only promises that the bank has the right to sell the property and that they have not encumbered it. What type of deed will the buyer most likely receive?
Special warranty
Borrower applied for a loan on the home of their dreams and were approved for very long specific terms based on their credit scores and income. At closing, the interest rate had doubled in the loan documents that were presented for their signatures. The borrowers were told that this was likely to be their only chance to receive any sort of loan and they must sign today. They were told if they did not sign that they would lose the house. This was?
Unacceptable because the borrowers were pressured to take the loan
A broker listed a home in a horse property area that is now surrounded by suburban residential subdivisions with much smaller lots. The listed property is immediately adjacent to a new subdivision and the city is demanding that the road separating the listing from the residential lots must be paved. There have already been neighborhood hearings regarding a proposed special assessment affecting both the horse property owners and the subdivision developer. Condemnation of some land to provide enough space for the road plu sidewalks is also being considered. Since there have been no formal actions on either of these proposals, the sellers instruct the broker not to disclose the meetings to any potential buyers. What are the brokers obligations?
The broker must inform the sellers that she has a duty to disclose these material facts even if the seller prefers not to disclose.
A broker with a license in referral status is permitted to do which of the following?
Refer listings to the brokers previous managing broker for a fee.
A broker listed home. The listing agreement must be delivered to the owner?
Upon signing the agreement
A broker notifies their broker company that they are moving to another firm at the end of the month. Which of the following statements is true?
The broker shall turn over to the broker company any listing obtained
