Question 1

Personal property can be:
a.  hypothecated
b.  turned into real property, alienated and/or hyopthecated
c.  turned into real property
d.  alienated

Accepted Answer

B  Personal property are items that are generally moveable and do not go with real estate.  Personal property can be turned into real property (fixture), it can be alienated (you can get rid of it) and hopothecated (pledged as collateral to secure loan)

Question 2

Under federal income tax law, the "basis" of real property's:
a.  cost
b.  purchase price minus any existing assumed loans
c.  assessed value prior to sale
d.  fair market value

Accepted Answer

A  The cost basis of a property is the purchase price or investment amount including commission and other expenses.  Cost basis is used to determine capital gains and capital losses for tax purchases.

Question 3

When purchasing with FHA financing, a new buyer would normally do each of the following except:
a.  pay for MI
b.  apply directly to a bank or savings & loan
c.  buy a home conforming with FHA requirements & restrictions
d. apply to local FHA office

Accepted Answer

D  FHA does not make laons, it insures loans.

Question 4

The most comprehensive and complete appraisal report is the:
a.  oral form report
b.  certificate report
c.  letter form report
d.  narrative report

Accepted Answer

D narrative report includes all info obtained by appriaser as well as the methodology behind the calculations & falue conslcusions but does NOT contain the buyers financial condition because how you pay for the property is not relevant to the value.

Question 5

The major cause of loss of value in real property is due to:
a.  old age
b.  obsolescence
c.  wear and tear
d.  deferred maintenance

Accepted Answer

B Obselescence refers to functional or economic onsolescence.  Litterally means the condition of no longer being used or useful or condition of being obsolete.

Question 6

An optioner & optionee make a contract for an option on a commercial piece of property.  If the optioneeedecides to exercise his option, when must he perform?
a.  Under terms of option contract
b.  whenever he wants
c.  within 6 moths
d.  when demands

Accepted Answer

A options are generally concerned with on ly 2 things, the time and price.  Whategver the parties agree to in those regards defines the terms of the option and the obligations of the parties.

Question 7

Unless otherwise specified, the rights to minerals which lie benath the surface of land:
a.  cannot be conveyed apart from real estate surrounding the minerals
b.  automatically transferred w/ sale of real property
c.  kep by original grantor

Accepted Answer

B  Appurtenances are said to run with the land & require no separate conveyance.  Appurtenances include easements, stock in a mutual water co., covenants and minerals.  They are considered real property.

Question 8

"Intestate Succession" occurs when:
a.   the deceased leaves only holographic will
b.  not all heirs are named in a formal ill
c.  there is no will
d.  there is a will

Accepted Answer

C  Interstate succession occurs when someone dies w/o leaving a will, or leaving an invalid will so that the property of the estate passes by the laws of succession rather than by the direction of the deceased

Question 9

Insurance  for a mortgage loan may be provided by:
a.  FNMA
b.  VA
c.  FHA or PMI
d.  GNMA

Accepted Answer

C  FHA insures lenders against loss in event of  default.

Question 10

Which of the following docs is usually prepared when a real estate buyer also purchases a seller's riding lawn mower?
a.  conidtional sale contract
b.  wraparound loan
c.  bill of sale
d.  an option

Accepted Answer

C bill of sale is a written document that serves as evidence of the transfer of title to personal property.

Question 11

What do liens and easements have in common?:
a.  neither can be done w/o consent of owner
b.  both are money claims against property
c.  both must be on public recor 2b valid
d.  both are encumbrances

Accepted Answer

D  liens are of course, serious in that they indicate the owner has failed to pay a debt secured directly or indirectly by the property.  Easements on the other hand are a partial necessity for many residential properties.

Question 12

A mortgage results in which of the following:
a.  contractual greement between a lender and a borrower w/ no ien
b.  a judgement lien placed on property being financed
c.  a specific contractual lien on financed property
d.  general lien placed on all

Accepted Answer

C  a mortgage is the most common example of a specific and voluntary lien.  The lien is created by a contractual agreement and it is specific to the property being financed.

Question 13

A balloon payment is usually associated with a:
a.  package mortgage
b.  variable mortgage that varies w/ cost of living index
c.  blanket mortgage
d.  large payment during the term or at end of payment schedule

Accepted Answer

D  a balloon payment is a large payment due at the end of a balloon loan.  Such a mortgage, commercial loan, or other ammortized loan.  A balloon loan typically features a relatively short term and only a portion of the loan's principal balance is amortiz

Question 14

A family rents a house from January 1st to June 30th.  This is considered a(n):
a.  periodic tenancy
b.  tenancy at will
c.  estate for years
d.  tenancy at sufferance

Accepted Answer

C an estate for years is a leashold created by landlord and tenant for a particular period of time.  This could be a fixed number of years, months, weeks or even days.  An estate for years will always have a definite term date.

Question 15

TRUE or FALSE  An agent has to prove that they were the procuring cause of the sale in a right to sell listing.

Accepted Answer

False.  Under an exclusinve authorization and right to sell listing, the broker is entitled to a commission regardless of who sells the property as long as the listing was signed under a valid license.

Question 16

When a government agency takes possession of private property for public use it is exercising the right of:
a.  reversion
b.  dedication
c.  eminent domain
d.  adverse possession

Accepted Answer

C Emient domain is one of the 4 government powers ( police, eminent domain, escheat and taxation) PEET

Question 17

The rights of ownership of real preoprty do NOT include the right of:
a.  exclusivity
b.  compatibility
c.  control
d.  disposition

Accepted Answer

B  compatibility.  within the context or real property, applies to the transaction process but not the property itself.  That is, buyers and sellers have reached compatibility when they mutually agree to all terms of an agreement.

Question 18

Governments use police power to regulate:
a.  safety
b.  zoning
c.  all of the other options are correct
d.  building codes

Accepted Answer

C  Police power is the constitutional authority and inherent power of a state to adopt and enforce laws & regulations to promote and support the public health, safety, morals and general welfare.

Question 19

Which of the following is not an example of police power?
a.  building codes
b.  rent control
c.  zoning
d.  declaration of restrictions

Accepted Answer

D  Declaration of restrictions is a statment made by a developer of a new subdivion which sets out the restrictions of general application throughout the new development.  Police power is the power & authority of the gov. to enforce the laws to protect.

Question 20

TRUE or FALSE:  The easement will transfer with the title with the buyer's only choice being to terminate the purchase contract if the easement is an issue.

Accepted Answer

True  Easemenets are non-revocable rights so the seller or buyer cannot terminate or revoke the easement.  The buyer's only choice is to take the property with the easement or terminate the purchase contract.

Question 21

The Fair Housing Act of 1968 prohibits discrimination based on:
a.  race
b.  familial status
c.  sexual orientation
d.  public assistance income

Accepted Answer

A  race.  The Civil Rights Act of 1968 defines housing discrimination as the "refusal to sell or rent a dwelling to any person because of his race, color, religion or natural origin".  The VII of this Act is commonly referred to as the FHA 1968.

Question 22

Statements by a real estate licensee that somewhat exaggerate the intangibles of a property w/o committing fraude are called:
a.  polishing
b.  marketing
c.  puffing
d.  prospecting

Accepted Answer

C Puffing is gernerally an expression or exaggeration made by a salesperson or found in an advertisement that concerns the quality of goods offered for sale.  It presents opinions rather than facts and is usually not considered a legally binding promise.

Question 23

If Carol wishes to sell her own house, does she need a real estate license?
a.  she does not need a license
b.  she must have a license issued yb the real estate commission
c.  she may obtain a temporary license to do this

Accepted Answer

A  An owner selling her own property is exempt from real estate licensing requirements.

Question 24

A real estate licensee has a buyer agency agreement.  What is the relationship of the seller to the licensee in this situation?
a.  customer
b.  fiduciary
c.  client
d.  agent

Accepted Answer

A ?

Question 25

If the tenant wrongfully stays past the term of his lease, this creates an:
a.  estate at will
b.  estate for years
c.  freehod estate
d.  estate at sufferance

Accepted Answer

D  An estate at sufferance arises when the tenant wrongfully holds over after the expiration of the term.  The landlord has the choice of evicting the tenant as a trespasser or accepting terms.  Also known as tenancy at sufferance

Question 26

The selling price on a buyer's closing statement is treated as:
a.  credit to the buyer
b.  debit to the buyer
c.  debit to the seller
d.  none of the other options are correct

Accepted Answer

B  closing statement is a cash accounting of a real estate transaction prepared by a broker, escrow officer, attorney or other person designtated to process the mechanics of the sales.  Selling price on buyer's closing statement is debit to buyer.

Question 27

A real estate broker should regard himself/herself as a:
a.  principal
b.  legal advisor
c.  fiduciary
d.  substitute for attorney

Accepted Answer

C.  Fiduciary means you put your client's interest above your own.  These are the highest duties known to law.

Question	Answer
Personal property can be: a. hypothecated b. turned into real property, alienated and/or hyopthecated c. turned into real property d. alienated	B Personal property are items that are generally moveable and do not go with real estate. Personal property can be turned into real property (fixture), it can be alienated (you can get rid of it) and hopothecated (pledged as collateral to secure loan)
Under federal income tax law, the "basis" of real property's: a. cost b. purchase price minus any existing assumed loans c. assessed value prior to sale d. fair market value	A The cost basis of a property is the purchase price or investment amount including commission and other expenses. Cost basis is used to determine capital gains and capital losses for tax purchases.
When purchasing with FHA financing, a new buyer would normally do each of the following except: a. pay for MI b. apply directly to a bank or savings & loan c. buy a home conforming with FHA requirements & restrictions d. apply to local FHA office	D FHA does not make laons, it insures loans.
The most comprehensive and complete appraisal report is the: a. oral form report b. certificate report c. letter form report d. narrative report	D narrative report includes all info obtained by appriaser as well as the methodology behind the calculations & falue conslcusions but does NOT contain the buyers financial condition because how you pay for the property is not relevant to the value.
The major cause of loss of value in real property is due to: a. old age b. obsolescence c. wear and tear d. deferred maintenance	B Obselescence refers to functional or economic onsolescence. Litterally means the condition of no longer being used or useful or condition of being obsolete.
An optioner & optionee make a contract for an option on a commercial piece of property. If the optioneeedecides to exercise his option, when must he perform? a. Under terms of option contract b. whenever he wants c. within 6 moths d. when demands	A options are generally concerned with on ly 2 things, the time and price. Whategver the parties agree to in those regards defines the terms of the option and the obligations of the parties.
Unless otherwise specified, the rights to minerals which lie benath the surface of land: a. cannot be conveyed apart from real estate surrounding the minerals b. automatically transferred w/ sale of real property c. kep by original grantor	B Appurtenances are said to run with the land & require no separate conveyance. Appurtenances include easements, stock in a mutual water co., covenants and minerals. They are considered real property.
"Intestate Succession" occurs when: a. the deceased leaves only holographic will b. not all heirs are named in a formal ill c. there is no will d. there is a will	C Interstate succession occurs when someone dies w/o leaving a will, or leaving an invalid will so that the property of the estate passes by the laws of succession rather than by the direction of the deceased
Insurance for a mortgage loan may be provided by: a. FNMA b. VA c. FHA or PMI d. GNMA	C FHA insures lenders against loss in event of default.
Which of the following docs is usually prepared when a real estate buyer also purchases a seller's riding lawn mower? a. conidtional sale contract b. wraparound loan c. bill of sale d. an option	C bill of sale is a written document that serves as evidence of the transfer of title to personal property.
What do liens and easements have in common?: a. neither can be done w/o consent of owner b. both are money claims against property c. both must be on public recor 2b valid d. both are encumbrances	D liens are of course, serious in that they indicate the owner has failed to pay a debt secured directly or indirectly by the property. Easements on the other hand are a partial necessity for many residential properties.
A mortgage results in which of the following: a. contractual greement between a lender and a borrower w/ no ien b. a judgement lien placed on property being financed c. a specific contractual lien on financed property d. general lien placed on all	C a mortgage is the most common example of a specific and voluntary lien. The lien is created by a contractual agreement and it is specific to the property being financed.
A balloon payment is usually associated with a: a. package mortgage b. variable mortgage that varies w/ cost of living index c. blanket mortgage d. large payment during the term or at end of payment schedule	D a balloon payment is a large payment due at the end of a balloon loan. Such a mortgage, commercial loan, or other ammortized loan. A balloon loan typically features a relatively short term and only a portion of the loan's principal balance is amortiz
A family rents a house from January 1st to June 30th. This is considered a(n): a. periodic tenancy b. tenancy at will c. estate for years d. tenancy at sufferance	C an estate for years is a leashold created by landlord and tenant for a particular period of time. This could be a fixed number of years, months, weeks or even days. An estate for years will always have a definite term date.
TRUE or FALSE An agent has to prove that they were the procuring cause of the sale in a right to sell listing.	False. Under an exclusinve authorization and right to sell listing, the broker is entitled to a commission regardless of who sells the property as long as the listing was signed under a valid license.
When a government agency takes possession of private property for public use it is exercising the right of: a. reversion b. dedication c. eminent domain d. adverse possession	C Emient domain is one of the 4 government powers ( police, eminent domain, escheat and taxation) PEET
The rights of ownership of real preoprty do NOT include the right of: a. exclusivity b. compatibility c. control d. disposition	B compatibility. within the context or real property, applies to the transaction process but not the property itself. That is, buyers and sellers have reached compatibility when they mutually agree to all terms of an agreement.
Governments use police power to regulate: a. safety b. zoning c. all of the other options are correct d. building codes	C Police power is the constitutional authority and inherent power of a state to adopt and enforce laws & regulations to promote and support the public health, safety, morals and general welfare.
Which of the following is not an example of police power? a. building codes b. rent control c. zoning d. declaration of restrictions	D Declaration of restrictions is a statment made by a developer of a new subdivion which sets out the restrictions of general application throughout the new development. Police power is the power & authority of the gov. to enforce the laws to protect.
TRUE or FALSE: The easement will transfer with the title with the buyer's only choice being to terminate the purchase contract if the easement is an issue.	True Easemenets are non-revocable rights so the seller or buyer cannot terminate or revoke the easement. The buyer's only choice is to take the property with the easement or terminate the purchase contract.
The Fair Housing Act of 1968 prohibits discrimination based on: a. race b. familial status c. sexual orientation d. public assistance income	A race. The Civil Rights Act of 1968 defines housing discrimination as the "refusal to sell or rent a dwelling to any person because of his race, color, religion or natural origin". The VII of this Act is commonly referred to as the FHA 1968.
Statements by a real estate licensee that somewhat exaggerate the intangibles of a property w/o committing fraude are called: a. polishing b. marketing c. puffing d. prospecting	C Puffing is gernerally an expression or exaggeration made by a salesperson or found in an advertisement that concerns the quality of goods offered for sale. It presents opinions rather than facts and is usually not considered a legally binding promise.
If Carol wishes to sell her own house, does she need a real estate license? a. she does not need a license b. she must have a license issued yb the real estate commission c. she may obtain a temporary license to do this	A An owner selling her own property is exempt from real estate licensing requirements.
A real estate licensee has a buyer agency agreement. What is the relationship of the seller to the licensee in this situation? a. customer b. fiduciary c. client d. agent	A ?
If the tenant wrongfully stays past the term of his lease, this creates an: a. estate at will b. estate for years c. freehod estate d. estate at sufferance	D An estate at sufferance arises when the tenant wrongfully holds over after the expiration of the term. The landlord has the choice of evicting the tenant as a trespasser or accepting terms. Also known as tenancy at sufferance
The selling price on a buyer's closing statement is treated as: a. credit to the buyer b. debit to the buyer c. debit to the seller d. none of the other options are correct	B closing statement is a cash accounting of a real estate transaction prepared by a broker, escrow officer, attorney or other person designtated to process the mechanics of the sales. Selling price on buyer's closing statement is debit to buyer.
A real estate broker should regard himself/herself as a: a. principal b. legal advisor c. fiduciary d. substitute for attorney	C. Fiduciary means you put your client's interest above your own. These are the highest duties known to law.

"Know" box contains:
Time elapsed:
Retries:

Question

Question

Question

PSI Exam Prep