PSI EXAM Flashcards
(100 cards)
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
