PSI NJ Real Estate Exam Updated 2024/2025;Actual

Questions and Answers Verified 100%(ACE in your NJ

PSI 2024 test)

The terms "littoral," "riparian," and "appropriative" refer to... - ANSWERwater rights

A salesperson lists a property with a contract that allows for subagency and dual
agency. The salesperson is - ANSWERan agent to the broker and a subagent to the
principal.

Depreciation is calculated based on the - ANSWERCost of the building only.

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 - ANSWERmortgagor

A competitive market analysis is MOST often used for - ANSWERsetting a listing price

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 - ANSWERtell
the seller not to disclose, because the statute of limitations has run out.

All of the following are methods to calculate the reproduction or replacement cost of a
building EXCEPT the - ANSWERstraight-line method

The buyer is assuming a mortgage presently on the property in the amount of $110,000.
What is the adjustment made at closing? - ANSWERCredit buyer $110,000; debit seller
$110,000.

If conditions for purchase are included in a deed and these conditions are violated, what
is the penalty? - ANSWERReturn of the property to the original owner.

The purpose of requiring an earnest money deposit in a real estate sales contract is to -
ANSWERprovide evidence of the buyer's intention to carry out the contract.

A judgment has been properly recorded. Any subsequent purchasers, whether they
have actually examined the record or not, have been given - ANSWERconstructive
notice

What type of map is MOST useful for describing the terrain of a very hilly lot? -
ANSWERcontour map
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, - ANSWERRequire the buyer to acknowledge
disclosure of the presence of any known lead paint.

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 - ANSWERtell potential
buyers about the parties. (Any social information expressed to an agent can be shared)

A major reason for buying and owning a condominium rather than a detached single-
family home is that - ANSWERa condominium tends to be more affordable.

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? - ANSWERThe buyer may sue the seller
for specific performance.

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 -
ANSWERstraight (term) loan (AKA term loan)

The real estate contract for a specific property for use as an unlicensed whiskey sales
operation was forced to terminate. The termination was the result of -
ANSWERImpossibility of performance. - - (Key word: *Unlicensed* whiskey sales
operation).

A broker lists a property, with a listing contract allowing subagency and dual agency.
One of the broker's salespersons shows the property. The salesperson would be
classified as - ANSWERa subagent of the seller. — (Think - brokerage is the AGENCY,
salesperson is working under the agency)

The relationship in which the agent is placed in the position of trust and confidence to
the principal is known by the term - ANSWERfiduciary

An agreement to purchase that has NOT yet closed is - ANSWERan executory contract.

When compiling a competitive market analysis, a broker would look for comparable
properties that - ANSWERwere located near the property being listed.

The power vested in the government to establish legislation to preserve order, protect
the public health and safety, and promote the general welfare is known as -
ANSWERpolice power

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 8-1/2%, how large a loan (rounded to the nearest
$100) can this buyer afford? (BE SURE TO USE THE AMORTIZATION TABLE.) -
ANSWER$130,000

An Environmental Impact Statement (EIS) - ANSWERprojects the impact on the

environment of a proposed project.

In an exclusive right-to-sell listing, an owner lists the property for sale with how many
brokers? - ANSWEROne

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 - ANSWERthe owner withdraws
the counteroffer before it is accepted.

Antitrust laws prohibit competing brokers from all of the following EXCEPT -
ANSWERreceiving compensation from both the buyer and the seller.

Without checking the facts, a broker who is the seller's agent tells a buyer that the
property taxes in a particular neighborhood are among the lowest in the area. The buyer
relies on the broker's statement and makes an offer on a house in the neighborhood.
Before closing, it is determined that the taxes are actually among the highest in the
area. The buyer could seek to rescind the contract on the basis of -
ANSWERmisrepresentation

The sellers have agreed to give the buyers an allowance of $16.95 per square yard to
retile the kitchen. If the kitchen is 10 feet x 14 feet, how much will it cost the sellers (to
the nearest dollar)? - ANSWER$264

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? - ANSWERthe first sold

Which of the following is the first action to take when mold problems are found? -
ANSWERIdentify and remedy the cause of the problems.

A borrower has defaulted on the mortgage. The mortgage contains an acceleration

clause. This permits the lender to - ANSWERdemand immediate payment of the entire
note.

A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the
loan for 15 years at 5 1/2% or for 30 years at 6 1/2%. To the nearest cent, what is the
difference between the monthly payments for these two loans? (BE SURE TO USE
THE AMORTIZATION TABLE.) - ANSWER$409.20

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 maintenance of value over profitability? -
ANSWERAn individual entrepreneur who owns several apartment buildings.

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is
called - ANSWERa contract

Errors and Omissions insurance covers the broker for - ANSWERUnintentional

misrepresentation

An example of a contract terminated due to inability to perform would be one in which

the - ANSWERseller had contracted for sale of the entire property without the
knowledge or consent of the other joint tenant.

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... - ANSWERcash price or amount of the
loan, amount of down payment required and number, amount, and frequency of
payments. DO NOT NEED TO INCLUDE PREPAYMENT PENALTIES AND REBATES.

A deed restriction is applicable to the activities of - ANSWERpresent and future owners.

In MOST states, foreclosed property is sold through - ANSWERPublic Auction

A tenant rented an apartment, signing a 15-month lease. After the lease expired, the
tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant
have? - ANSWERtenancy at will

When preparing a market data estimate of value, which of the following categories of
adjustment is NOT essential? - ANSWERThe original cost of the building.

Which of these Federal laws regulates the advertisement of a lender's credit terms
(rates, payment, etc.)? - ANSWERRegulation Z

A couple owns an older home in a neighborhood that is becoming a commercial area.

Because of the change in the use of the land, the couple can expect the value of their
parcel to increase at some future time. This is an example of the principle of -
ANSWERanticipation

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 -
ANSWERan option contract

When a principal authorizes an agent to perform a particular act or transaction, it is an

example of a - ANSWERSpecial Agency
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 - ANSWERThere is no dollar limit on damages paid

A managing broker can be held responsible for - ANSWERall real estate activities of
salespersons.

When land is conveyed to a trustee, the trustee may - ANSWERdo whatever is

permitted under the trust agreement

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. - ANSWER$800

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? - ANSWER1.)$105,090.
2.) $110,753.
3.) $120,910.
*(A) 4.) None of the above.*

The escrow officer or closing agent MUST give information regarding the sales price
and seller's social security number to - ANSWERIRS

During the listing presentation, the seller questions the amount of commission to be
paid and is told - ANSWERthe amount of commission is negotiable.

The FHA functions MOST like - ANSWERan insurance company

Usury laws were enacted to protect the - ANSWERBorrower (From unscrupulous

activities)

Why was the Jones vs. Mayer decision of 1968 important? - ANSWERBy upholding the
Civil Rights Act of 1866, the Supreme Court removed all exceptions to racial
discrimination in housing.

A broker supplies the financing for a project to build condominiums with the stipulation
that he has the exclusive right to sell the completed condos. Which of the following
BEST describes this relationship? - ANSWERAgency coupled with an interest

A broker says, while showing a rural property, "This property has the world's purest well
water." This would be an example of - ANSWERan expression of opinion, or puffing,
which could lead to misrepresentation.
An appraiser MUST be licensed or certified to handle Federally related work on
residential property valued at more than - ANSWER$250,000

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 - ANSWERHe is
no longer the listing agent.

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? - ANSWERDebit the seller $300, Credit the buyer $300

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT
contain an automatic renewal clause. The couple plans to move out at the end of the
lease rather than renew it. How much notice MUST they give to comply with the lease
term? - ANSWERNo notice is required

When is racial discrimination in the rental of rooms or apartments permitted? -

ANSWERUnder no circumstances

At the time of harvest, crops that require annual planting are generally considered to be
- ANSWERPersonal Property

Under a land contract for deed, who retains fee ownership of the property? -
ANSWERVendor

Ownership of common stock in a corporation gives - ANSWERCo-ownership in any real

property held by that corporation.

Earnest money should be deposited into a trust account - ANSWERIn a timely manner
according to state laws.

Which of the following statements about discount points is FALSE? - ANSWER(A) —1.)
They are computed as a percentage of the selling price.
2.) They are used to buy down interest rate.
3.) They are a function of the marketplace.
4.) They are paid by either the buyer or the seller.

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing
contracts, the broker has earned his commission when - ANSWERThe seller accepts
the offer.

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 -
ANSWERsuggest the buyer ask a lawyer to furnish the wording.
The PRIMARY purpose of zoning ordinances is to - ANSWERimplement a local master
plan.

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 - ANSWERmore variety of loan programs available

The real estate broker who is listing a house for sale should personally verify -
ANSWERThe number of square feet in the building.

A lawsuit for inverse condemnation may be brought by - ANSWERa homeowner

How does a creditor who has obtained a judgment get satisfaction against a debtor who
will not pay? - ANSWERWrit of execution

The economic characteristics of land are - ANSWERScarcity, location, and durability.

An easement can be terminated by - ANSWERMerger of titles

Which of the following events would AUTOMATICALLY cancel a listing agreement? -

ANSWERProperty owner's death.

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? - ANSWERBoth contracts are valid.