National Exam Practice (PSI)

It is capped.

What is done to a landfill that is put out of commission?

$349,698.87

A buyer with a $350,000 loan has a monthly principal and interest payment of $2,102.36. If $1,801.23 is interest, what's the new principal balance after the first payment is applied? (If $1,801.23 of the $2,102.36 is interest, that leaves $301.13 for principal. Subtract $301.13 from $350,000 for a new principal balance of $349,698.87.)

$117,687.80

A buyer with a 15-year, $250,000 loan at a fixed 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?

$315,789

A seller wants to break even after the broker's commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?

Yes (because title defects not revealed in a title search can crop up even with marketable title).

Aldrich is conveying marketable title to a property buyer. Should he also furnish a title insurance policy?

$174,000

An appraiser used the cost approach to estimate a property's value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?

Ordinary

Angelo's aging mother needs a place to live out her remaining years. Angelo conveys a home to her, but only for her lifetime. This is an example of what type of life estate?

Encroachment

Because of the topography of Elsie's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What word or phrase best describes Elsie's fence?

Use variance

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission?

Jane will need to fill out a W-9 for IRS reporting purposes.

Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true?

4

Buyer Peter is eager to make an offer on the two-story home you just showed him, but you're concerned about the back bedroom, since it looks like a relatively recent addition. When Peter asks you why it's an issue, how do you respond? 1. It doesn't fit aesthetically with the rest of the house. 2. The extra bedroom is inconsistent with the rest of the neighborhood, reducing its value. 3. You're certain it's not built to code, so Peter shouldn't make an offer on the property. 4. You recommend that Peter check on the permits for it, so that he doesn't buy the house and then have to correct or even remove the addition because it wasn't built to code.

A

Cambridge Apartments provides an open parking lot for its residents. There is adequate parking, and all spaces are available on a "first-come, first-served" basis. Alton has multiple sclerosis and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests? A) Cambridge must allow an exception to the first-come, first-served policy for Alton. B) Provided at least two parking spaces per living unit are available, a parking space need not be reserved for Alton. C) Cambridge must provide a space for Alton that is no farther than 50 feet from an accessible building entrance. D) As long as the current parking policy were already in place before Alton made application, Cambridge need not make an exception.

Amendment

Camille, a buyer, wants to change the price already agreed to in a sales contract. What document should she use?

With the transfer of deed from the seller to the buyer

Christina purchased a house from Thomas. When did she officially gain ownership of the property?

Loft

Dean's new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean most likely has a _______ lease for the office space.

Property taxes

Deirdre lost her job, and the bank foreclosed on her condo. Which of the following of her outstanding debts will the bank pay first?

Eviction

Drew violated the terms of his lease by having pets, so property manager Sheila has started ______ proceedings to get him removed from the apartment.

5

Imagine that you're an active real estate licensee as well as an architect, and you'd like to partner with a builder who's just beginning a development. Which of these creates agency coupled with interest? 5. You agree to design the houses for this builder in return for getting the listings when the properties are finished. 6. You agree to list the properties for a reduced commission once they're built. 7. You have the builder and developer sign listing agreements now that will be effective when the properties are complete. 8. You tell the builder that he has to hire you to design the houses if the builder wants you to list them when they're finished.

Clean Water Act

Johannes must obtain a permit for a construction project that is located right next to a wetlands. Which federal law or regulation requires him to get the permit?

185 X 5 X 225 (Multiply 185 by .5; multiply your answer by 225.)

John's property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John's property?

D

Lamar closes on his new home next week. It's a 37-year-old split level, so his agent asked if he's interested in purchasing a home warranty. "Why would I need a warranty?" he wondered. "Didn't the home inspection identify all of the issues?" What's the agent's best response to Lamar's question? A) Buying a home warranty almost guarantees you won't have any issues! B) If you purchase a home warranty and something breaks, you can sue the seller. C) Buying a home warranty almost guarantees you won't have any issues! D) A home warranty covers things the inspection didn't address, like appliances, as well as structural issues that occur.

The property management agreement

Lance is a property manager who receives his management fees on a bi-monthly basis. He draws them from a trust account set up in the property owner's name. What gives him the authority to take these disbursements as his fee?

Fee simple

Leon and Beth own 1/13 of a timeshare estate. They own weeks 20 and 21, and also weeks 40 and 41. These weeks are inheritable. What type of ownership is this?

3

Licensee Kennie Mae's neighbor, Buzz, wants to sell his house but doesn't want to sign an agency agreement. Kennie Mae works with Buzz to list and show the property and negotiate offers. After the property sells, Buzz discovers that Kennie Mae didn't present all offers to him, and he sues Kennie Mae. Kennie Mae claims that because she didn't have an agency agreement with Buzz, she wasn't required to perform all fiduciary duties. What legal principle applies here? 1. Agency after the fact, because Kennie Mae continued to perform tasks for Buzz through the closing date. 2. Law of agency, because Kennie Mae defined her agency relationship with Buzz through the tasks she performed. 3. The doctrine of estoppel keeps Kennie Mae from disavowing the agency relationship because she provided agency tasks for Buzz. 4. The ratification doctrine states that Kennie Mae ratified her relationship with Buzz by signing the closing paperwork.

Divide the room into two rectangles, calculate the area of each, and add those together.

Margaret has an L-shaped living room. How would you calculate the area of this room?

The firm pays her a salary.

Marge works for Morgan Realty as a transaction coordinator. Which of these factors may cause the IRS to classify Marge as an employee?

Mediation

Most often, what's the first course of action for disputed home warranty claims?

This is a breach of confidentiality because confidentiality survives forever.

Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate's buyer customer. Monica tells Kate, "You know Reuben inherited a bunch of money right before he sold his house, right?" Which of these statements is true?

Accounting

Newt's buyer client isn't happy with him. The buyer has accused Newt of breaching his duty of ______ by mishandling the earnest money.

The original sales agreement and any addenda

Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?

Possession

Rohit bought 31 acres of undeveloped and mostly forested land. He is planning a weekend with friends where they'll camp on the property while scouting good locations to place a cabin. Which right in the bundle of rights allows Rohit to do the camping weekend on undeveloped land?

Indestructibility

Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair, and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property?

The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year's property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?

Legal description

Shannon is reading through paperwork related to her upcoming home purchase when she comes across the following: "Southwest quarter of Southwest quarter (SW ¼ of SW ¼) and West Half of Southeast quarter of Southwest quarter (W½ SE¼ SW¼) of Section Eleven (11), Township Four (4) North of Range Eight (8) West." What did Shannon just find?

Zero

Steve is preparing a market analysis for the Joneses and has selected three comparable properties. How many adjustments should Steve make to the Joneses' property?

1

Supply and demand determine competition within a market. Which of the following is a true statement? 1. When there are fewer houses on the market, sellers can demand more for their properties. 2. When there are fewer houses on the market, neighborhood blight occurs. 3. When there are fewer houses on the market, buyers will pay less. 4. When there are fewer houses on the market, demand wanes, as well.

Voidable

Sylvia, who's 15 years old, and her neighbor Marge, who's 24, sign an agreement that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

Fee simple determinable

The Crows gave their son, Gibson, the family property, so long as he doesn't join his friend's rock band. If he joins the band, the property goes back to them. What type of estate is this?

Downzoning

The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______.

Property taxes ()

What's a typical prepaid item that goes into a seller's credit column and a buyer's debit column on a closing statement? ()

3,575

The main floor of Kinsey's home is 1,425 square feet. The upper level is 875 square feet with one unfinished bedroom that measures 150 square feet. The finished basement is 1,425 square feet with 7.5-foot ceilings. Kinsey's MLS listing includes below-grade square footage in livable area. What's the reportable square footage for Kinsey's home?

HUD

Title II of The Americans with Disabilities Act of 1990 prohibits discrimination based on disability in programs, services, and activities provided or made available by public entities. Which agency enforces Title II when it relates to state and local public housing, housing assistance, and housing referrals?

One in which only the person who finds the buyer gets paid

What is an open listing agreement?

The listing expires and is automatically terminated.

Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?

Group boycotting

Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer agents showing her listings to not do business with this company, either. What is this an example of?

Roof

Water buildup, ice damming, and a fascia damaged by moisture are common ______ issues.

Elements and units

What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach?

Any ad likely to mislead consumers acting reasonably under the circumstances

What does the FTC consider to be a deceptive ad?

An area where flood insurance is mandatory

What is a special flood hazard area?

Criminals may use social networking sites to identify properties that are vacant or have high-end possessions.

What's the biggest security issue with using social networking sites to market your listings?

Purchase a third-party home warranty to protect the buyer

When a buyer finances a newly built home with a Federal Housing Administration loan, what does the FHA require the builder to do?

Multiple listing clause

Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?

Defeasance

Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?

Americans with Disabilities Act

Which of the following acts requires commercial buildings to be accessible to disabled individuals, such as those who use wheelchairs?

Promissory note

Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?

Unpaid real estate taxes

Which of the following is a typical accrued adjustment?

The owner of a servient estate buys the property of the dominant estate.

Which of the following is an example of easement termination by merger?

Building code

Which of the following is most likely to establish workmanship standards when someone is building an addition to their property?

2

Which of the following statements about material facts is true? 1. Material facts are only those that can be easily seen or discovered. 2. A material fact may have more or less effect on a buyer based on the buyer's needs and values. 3. All parties considering a property would regard each material fact in the same way. 4. All material facts are related to physical conditions.

6

Which of these is NOT one of the ways in which an agency relationship may be terminated without penalty for either the agent or the principal? 5. Martha listed Sonja's home for sale. Martha helped Sonja negotiate an offer and performed the other tasks required of her. The closing has taken place. 6. Delaney signed a buyer's representation agreement with Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement. 7. Phyllis listed her home with Brad. Brad put the property on the MLS, but Phyllis hasn't heard from him in more than two months. 8. Richard listed Ole's ski chalet for sale. Two weeks later, an avalanche destroyed the property.

8

Which of these statements about the homeowner's right of redemption is true? 5. Homeowner right of redemption applies to foreclosures, short sales, and REOs. 6. Only foreclosures are subject to homeowner's redemption rights. 7. Right of redemption timelines are longer for foreclosures than they are for short sales. 8. Rights of redemption window with REOs may have expired.

Uniform Electronic Transactions Act

Which of these was enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures?

C

Which one of these situations represents the illegal practice of redlining? A) Eunice refused to allow her agent to show her house to families with children. B) Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods based on the neighborhood's demographics. C) Jaime was working with Korean clients, so he focused on showing them homes in Korean communities because he thought they would be more comfortable there. D) Arlo, a licensee, distributed a flyer in several neighborhoods warning of impending commercial developments that would negatively impact property values.

The property's legal ownership can be challenged.

Which option is true if a deed is not recorded after closing?

7

Which statement correctly identifies a federal fair housing law and what it addresses? 5. The Civil Rights Act of 1866 made it illegal to discriminate on the basis of age and gender. 6. The Fair Housing Act of 1968 attempted to eliminate discrimination based on gender. 7. Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion. 8. The Housing and Community Development Act of 1974 added marital status to the list of protected classes.

Fee simple absolute

Which type of estate gives the owner condition-free interest in a property? This type of estate conveys the highest possible interest.

Property owners and property managers

Who is responsible for ensuring accessibility requirements for a commercial property are met?

B

You're on a planning board that's discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response? A) "That applies to commercial areas only." B) "That's a great way to meet our objectives." C) "That's crazy. We're trying to reduce density, not increase it." D) "That will work for residential areas, but what about commercial?"

File a claim of inverse condemnation.

Your clients, the Harpers, live in Area B that's adjacent to Area C; Area C was recently downzoned. If the Harpers believe the rezoning has harmed their property values, what can they do?