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PSI REAL ESTATE STATE EXAM (NJ)
QUESTION AND ANSWERS RA TED A+
Question : Water Rights
Correct answer: The terms "littoral," "riparian," and
"appropriative" refer to
Question : A salesperson lists a property with a contract that
allows for subagency and dual agency. The salesperson is
Correct answer: an agent to the broker and a subagent to the
principal.
Question : Depreciation is calculated based on the
Correct answer: Cost of the building only.
Question : When a property owner uses his home as collateral
for a loan and creates a lien in favor of the lender, title is held by the
Correct answer: mortgagor
Question : A competitive market analysis is MOST often used
for
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Correct answer: setting a listing price
Question : A seller tells the listing agent that her home was
treated for termites 10 years ago, so there are no termites now.Before listing the property, the agent should
Correct answer: tell the seller not to disclose, because the statute
of limitations has run out.
Question : All of the following are methods to calculate the
reproduction or replacement cost of a building EXCEPT the
Correct answer: straight-line method
Question : The buyer is assuming a mortgage presently on the
property in the amount of $110,000. What is the adjustment made at closing?
Correct answer: Credit buyer $110,000; debit seller $110,000.
Question : If conditions for purchase are included in a deed and
these conditions are violated, what is the penalty?
Correct answer: Return of the property to the original owner.
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Question : The purpose of requiring an earnest money deposit in
a real estate sales contract is to
Correct answer: provide evidence of the buyer's intention to
carry out the contract.
Question : A judgment has been properly recorded. Any
subsequent purchasers, whether they have actually examined the record or not, have been given
Correct answer: constructive notice
Question : What type of map is MOST useful for describing the
terrain of a very hilly lot?
Correct answer: contour map
Question : The Department of Housing and Urban Development
estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA,
Correct answer: Require the buyer to acknowledge disclosure of
the presence of any known lead paint.
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Question : At the time of listing, the seller tells the listing agent
they are moving because the neighbor has loud parties every weekend. The agent should
Correct answer: tell potential buyers about the parties. (Any
social information expressed to an agent can be shared)
Question : A major reason for buying and owning a
condominium rather than a detached single-family home is that
Correct answer: a condominium tends to be more affordable.
Question : A buyer was negotiating the purchase of a house for
himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have?
Correct answer: The buyer may sue the seller for specific
performance.
Question : A loan which requires the borrower to pay interest
only until the maturity date (or due date), and then to pay the entire principal on the maturity date, is called a