PSI Oklahoma Real Estate Practice Test (2022/2023) Already Passed

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PSI Oklahoma Real Estate Practice Test (2022/2023) Already Passed MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social securit... y number(s) and ✔✔the sale price An owner hired a construction company to build a swimming pool at a new home. The owner failed to pay the bill once the work was completed and the construction company filed a lien to obtain payment of the debt. The encumbrance created is called ✔✔a mechanic's lien. Legal descriptions using the government survey system are NOT generally used in ✔✔the original 13 states. Three people buy a house as tenants in common. Subsequently, two of the owners want to sell, but the third discourages each potential purchaser. The two owners who wish to sell the house can ✔✔file an action for partition against the third owner. A major difference between freehold and nonfreehold estates is that all freehold estates ✔✔are of indeterminable duration. A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these balances. Which of the following statements is FALSE regarding the distribution of funds? ✔✔The second mortgagee receives nothing unless he forced the foreclosure auction. Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of ✔✔prior appropriation. In the sale of property, there is often confusion over whether an item is a fixture or personal property. What is the best way to avoid this confusion? ✔✔Specify questionable items of property in the written sales contract. A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store? ✔✔Conditional use permit or zoning variance. An Environmental Impact Statement (EIS) ✔✔projects the impact on the environment of a proposed project. A deed restriction is applicable to the activities of ✔✔present and future owners. An escheat occurs when ✔✔a property owner dies without heirs or a valid will. Ordinances that specify construction standards are ✔✔building codes. When preparing a market data estimate of value, which of the following categories of adjustment is NOT essential? ✔✔The original cost of the building. A competitive market analysis takes into consideration ✔✔square footage of the subject property. Three identical homes in a neighborhood were listed at the same time in a market where demand was constant. According to the law of supply and demand, which would have sold for the lowest price? ✔✔The first sold. A formal appraisal will ALWAYS be REQUIRED when the ✔✔lender wants to sell the mortgage to the secondary market. A competitive market analysis is MOST often used for ✔✔setting a listing price. According to the principle of progression, a three-bedroom, one-story home is MOST likely to bring the highest sales price if located in a neighborhood in which ✔✔most homes are larger than the sale home. If an older building cannot be air-conditioned, it is an example of ✔✔functional obsolescence. A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest ✔✔a competitive market analysis to determine the property's value. The FHA functions MOST like ✔✔an insurance company. Which of the following consumers would be able to derive the most benefit from a reverse mortgage? ✔✔A couple in their late 60?s who need to tap their home equity to help cover their expenses but do not want to sell their house. A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to ✔✔demand immediate payment of the entire note. In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT ✔✔more variety of loan programs available. According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the ✔✔prepayment penalties and rebates. Which of these Federal laws regulates the advertisement of a lender's credit terms (rates, payment, etc.)? ✔✔Regulation Z. When a principal authorizes an agent to perform a particular act or transaction, it is an example of a ✔✔special agency. The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that ✔✔he is no longer the listing agent. A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm has an agency relationship with ✔✔the builder. An agency relationship between a property owner and a property manager is usually created by ✔✔a management agreement. Even after an offer has been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist on a mutual release? ✔✔The buyer finds a better property for better terms. To what party or parties does the broker owe the fiduciary duty of care? ✔✔the party or parties employing the broker A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is ✔✔an agent to the broker and a subagent to the principal. Under the common law of agency, licensees owe the broker with whom they are associated all of the following duties EXCEPT ✔✔indemnification. Which of the following real estate contracts is a service contract? ✔✔a listing agreement A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should ✔✔tell the seller that the buyer will pay more. State laws differ on whether a buyer is entitled to know about ✔✔a suicide that occurred in the house last year. Unrepresented buyers ask the licensee who listed the home whether they should order a property inspection as a part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to respond? ✔✔If you feel it is in your best interest, please do so. What is the duration of a home warranty's coverage? ✔✔as disclosed in the contract that offers the warranty A licensee is listing a property in a known flood plain. The seller flatly denies that the structure and the property have ever been flooded. What is the licensee required to do in this situation? ✔✔Inform the seller of the legal obligation to disclose facts regarding flood plains. 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 ✔✔tell the seller to disclose the termite treatment on the property disclosure. A seller's statement in a property disclosure document means ✔✔the owner is disclosing known latent defects. What critical aspect of the property inspection process MUST licensees convey to prospective buyers? ✔✔Need for inspections to be completed within the time stated in the contract. 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, ✔✔require the buyer to acknowledge disclosure of the presence of any known lead paint. A broker has signed a listing contract for the sale of a home. Which of the following could make this contract voidable? ✔✔The seller is heavily under the influence of alcohol at the time of signing. Under the terms of their listing contract, the owners may sell their house themselves and pay no commission. If their agent sells it, a commission will be due. What kind of listing contract do the owners have? ✔✔Exclusive agency listing. A gross lease can be best defined as one where the tenant pays, as a part of the rent, ✔✔no operating expenses of the leased space. A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called ✔✔an option contract. When a listing broker is preparing an Offer to Purchase for a buyer customer, contingencies involving inspections or approval by a third party should ✔✔have short deadlines. A licensee has an agency representation agreement with a buyer. When showing another company's listing, what obligation does the licensee have to the seller and the listing broker at the other company? ✔✔Disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer. Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE? ✔✔Both contracts are valid. While an agent is showing a listed property, the seller and the buyer enter into an oral agreement for the purchase of the home. If a dispute over the terms arises later, the agreement may be unenforceable because ✔✔the agreement does not comply with the Statute of Frauds. A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if ✔✔the owner withdraws the counteroffer before it is accepted. A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as ✔✔void. A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when ✔✔the seller accepts the offer. Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising? ✔✔"Catholics preferred." A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that ✔✔there is no dollar limit on damages paid. Salesperson Susan was at the local coffee shop with some agents from other offices. The subject of commissions came up, and agents began to compare their commission rates. Susan should ✔✔advise her friends this could constitute a violation of Sherman Antitrust Act. An equal housing opportunity notice MUST be ✔✔displayed in the brokerage office. Antitrust laws prohibit competing brokers from all of the following EXCEPT ✔✔receiving compensation from both the buyer and the seller. During the listing presentation, the seller questions the amount of commission to be paid and is told ✔✔the amount of commission is negotiable. A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as ✔✔steering. Earnest money should be deposited into a trust account ✔✔in a timely manner, according to state laws. A managing broker can be held responsible for ✔✔all real estate activities of salespersons. Failure of a real estate agent to comply with Fair Housing practices is punishable by ✔✔license revocation and criminal prosecution. A salesperson in a branch office is sued for damages by a buyer after the salesperson misrepresents a property. Who has the ultimate responsibility for the salesperson's actions? ✔✔the supervising broker The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should ✔✔suggest the buyer ask a lawyer to furnish the wording. On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month. ✔✔$800 Davis, Hernandez, and Moore are vested as tenants in common on a parcel of land. Each received a pro-rata undivided interest in the parcel. The total price was $120,000. Davis put up 40% and Hernandez put up $22,500. What percentage does Moore own (to the nearest tenth of a percent)? ✔✔41.2% An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000? ✔✔$121,505 If a borrower can afford to make monthly principal and interest payments of $1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan (rounded to the nearest $100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION TABLE.) ✔✔$176,100 An investment property returns 12% of its value or $21,000 annually. What is the value of the property? ✔✔$175,000 A home buyer is obtaining a fully amortized loan in the amount of $140,000. The savings and loan will give him the loan for 15 years at 5% or for 30 years at 6%. To the nearest dollar, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.) ✔✔$267 A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes cash flow or income over the maintenance of value? ✔✔An individual entrepreneur who owns several apartment buildings. Which restrictive covenant would be considered illegal? ✔✔A covenant that restricts selected parcels within a defined subdivision. To be valid, every deed must ✔✔be executed by the grantor. At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing? ✔✔Debit seller $300; credit buyer $300. In MOST states, foreclosed property is sold through ✔✔public auction. MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and ✔✔the sale price. An exception to title insurance coverage is ✔✔defects that clearly appear in the title search. [Show More]

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