National PSI (6)

21) Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______. Covenant Easement Grant License

A license is permission to do something on another's land without actually possessing any interest or ownership in the land.

46) Which of the following is an example of a universal agent? Buyer's agent Conservator Escrow officer Listing agent

A universal agent has broad authority to act on behalf of the principal, such as a person with a power of attorney or a conservator.

100) Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______. Accepting liquidated damages Accepting partial performance Suing for damages Suing for specific performance

Accepting liquidated damages All of the answer options are actual remedies to breach of contract, but in this scenario, Kenneth kept the earnest money, which is known as accepting liquidated damages.

23) Which type of agent is an escrow officer? General agent Limited agent Single agent Universal agent

An escrow officer works in limited agency capacity.

35) What does the Federal Trade Commission consider to be an unfair ad? Any ad or business practice that causes or is likely to cause injury Any ad that is likely to mislead consumers acting reasonably under the circumstances Any ad that makes a health claim Any ad with a claim that's difficult to evaluate

Any ad or business practice that causes or is likely to cause injury is considered an unfair ad, according to the FTC's Unfairness Policy Statement.

75) Lydia put the minimum 3.5% down on her $210,000 home. She'll have to pay an MIP. What type of loan does Lydia have? Conventional FHA Standard VA

Based on the minimum down payment amount of 3.5% and the fact that she's paying MIP, Lydia has an FHA loan.

52) Which of these is a violation of the RRP Rule? A homeowner performs DIY work in a home built prior to 1978. A seller of a home built in 1952 doesn't make the appropriate lead disclosures. Contractors from a home improvement store install windows or doors. Contractors perform renovations that disturb lead-based paint without holding proper certification.

Contractors perform renovations that disturb lead-based paint without holding proper certification. The federal Lead Renovation, Repair, and Painting (RRP) Rule requires firms that do renovation or repair work in homes built prior to 1978 to be properly certified in using lead-safe work practices, but it doesn't prohibit DIY work.

50) State usury laws are typically not applicable to what type of lending? Consumer loans Credit cards Loans from private lenders Personal loans

Credit cards, retail installment contracts, and consumer leases are typically exempt from usury laws.

4) Why are galvanized pipes a problem in older homes? They are not a problem. They are out of date and can lead to a variety of electrical problems. They can rust and cause leaks and low water pressure. They indicate the heating and cooling system(s) are outdated.

Galvanized pipes can be a problem if they start to rust. The rust can cause the pipe to deteriorate, causing leaks and low water pressure.

51) Two essential elements of a deed are the ______. Grantee's signature and the habendum clause Grantor's signature and conveyance clause Grantor's signature and grantee's signature Habendum clause and the habeus corpus clause

Grantor's signature and conveyance clause. Only the grantor's signature is required, not the grantee's. The habendum clause is required only if the deed is conveying less than a fee simple estate.

66) Charlie represents Sue, a buyer, in a transaction. A licensee from another firm represents the seller, Claude. Claude will pay a 6% commission to his listing firm, and that firm will split the commission with Charlie's firm. Charlie will be compensated through his brokerage. What's true about this situation? Charlie and the other licensee are engaging in undisclosed dual agency. Charlie's compensation comes from Claude, so Charlie is also Claude's agent. In this transaction, Charlie only represents Sue and the other licensee only represents Claude. Sue is now Charlie's customer because she's not compensating Charlie for his services as her buyer's agent.

In this transaction, Charlie only represents Sue and the other licensee only represents Claude. Compensation doesn't determine agency—the agency relationship agreement does.

83) Drake's offer to purchase Kevin's condo currently has a financing contingency, an inspection contingency, an appraisal contingency, and a sale of current home contingency. Kevin also got an offer from Lucy, which came in at $5,000 less than Drake's offer but with only an appraisal contingency. What is true about Drake's offer compared to Lucy's? It's likely viewed as a less favorable offer. It's likely viewed as a lowball offer. It's likely viewed as a more favorable offer. It will likely set off a bidding war.

It's likely viewed as a less favorable offer. Multiple contingencies make an offer less attractive to a seller. Even though Drake offered $5,000 more than Lucy, Kevin will probably find Lucy's offer more favorable. He won't have to wait for the sale of another home or worry about financing.

7) Which of the following is an example of sub-agency? Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller. Kermit is represented by Bert, an agent with Street Realty. Today they're seeing Oscar's house, which has been listed by Oscar's agent, Ernie, from Energy Realty. Rita is a licensee with Hawthorne Realty. She has a client, Dinah, who's selling her condo. Rita thinks Dinah's house will be perfect for Ruby, a customer. Tim and Tom are both licensees with Acme Realty. Tim is the listing agent on a home where Tom represents the buyer.

Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller. Only the agent working with a buyer customer on behalf of another firm's listing is an example of sub-agency. In this case, that would be Maurice.

85) A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest? $10,869.57 $3,500.93 $3,593.75 $3,750.27

Multiply the principal balance by the interest rate: $750,000 x .0575 = $43,125. Then find the monthly rate by dividing $43,125 by 12 to get $3,593.75. Since the principal balance is less the next month, the interest amount will change too.

74) Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed? Each licensee owes all fiduciary duties to both clients. Katherine owes Elena the duty of loyalty. Nate owes no duties to Timothy, and Katherine owes no duties to Elena. Nate owes Timothy the duty of disclosure.

Nate owes Timothy the duty of disclosure. A licensee owes all parties the duty of disclosing material facts, as well as honesty, fairness, and accounting. Only a client would be owed obedience, loyalty, and confidentiality.

19) Eileen is preparing a report pursuant to the terms of a property management agreement. This report attempts to predict the income and expenses associated with running the property over the next year. What report is she preparing? Budget comparison statement Cash flow report Operating budget Profit and loss statement

Operating reports project the income and expenses of operating the property, usually over a one-year period.

79) Eleanor is moving from a starter home into something a little larger. Her agent has cautioned her against making the offer on the new place contingent on the sale of Eleanor's starter home. Why the caution? Eleanor might want to keep and rent out her smaller home as an income source. Eleanor should include a minimum of two contingencies to let the sellers know she is serious. Eleanor's lender might be wary of contingencies. Sellers would view an offer without that contingency as a stronger offer.

Sellers would view an offer without that contingency as a stronger offer. Contingencies make offers less attractive. The sellers might consider an offer without a prior home sale contingency more favorably, since it will likely have a faster close.

45) Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting? She avoids commingling trust funds with her firm's operating funds. She discloses the terms of the listing agent's compensation to her client. She meticulously manages all her clients' transactional paperwork. She properly records the earnest money her buyer client gave her.

She discloses the terms of the listing agent's compensation to her client. The fiduciary duty of accounting means that the licensee properly handles all funds, paperwork, and property.

31) If a private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply? Housing designated for senior use "Mrs. Murphy" exemption Owner-occupied buildings with no more than six units Single-family housing sold or rented without the use of a broker

Single-family housing sold or rented without the use of a broker is exempt, provided the owner doesn't own more than three single-family homes at one time.

13) What's the capitalization formula used in the income approach? Value = cap rate minus income Value = income multiplied by cap rate Value = income plus cap rate Value = net operating income divided by cap rate

The basic capitalization formula used in the income approach has three parts: value, capitalization (cap) rate, and net operating income. The formula is value = net operating income divided by cap rate.

20) Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and a previously unknown title defect has been revealed. What happens now? Jorge has to take steps to remove the defect before he can close. The seller is still required to clear the title defect before closing. The seller may not be required to attempt to clear the defect before closing. The title insurance company is required to cover the title defect.

The seller may not be required to clear the defect before closing, depending on the type of defect (e.g., an easement) it may not impact closing. Other types of defects may require action before closing.

42) Starla, 35, and Gwen, 32, are going into business! Gwen is buying a share of Starla's franchise. Their attorneys drew up a contract that had Gwen providing $45,000 to Starla in return for 50% ownership. Gwen and Starla happily signed the contract, Gwen paid Starla the $45,000, and Starla presented Gwen with a notarized certificate showing Gwen's 50% ownership in the company. What type of contract is this? Executory Valid Void Voidable

This contract contains all of the essential elements, and so it is valid. The terms of the purchase contract have been completed, so it's an executed contract, not an executory one.

30) Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, what may they apply for and be granted? Area variance Moratorium Special use permit Use variance

This is a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use.