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National PSI Exam Prep complete exam review 2022 complete solution
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National PSI Exam Prep complete exam review 2022 completesolution
A broker is completing a CMA to determine the potential listing price of a seller's home.
Which of the following is NOT part of the final CMA given to the seller?
A) Highest and best use evaluation
B) Comparable sales analysis
C) Adjustments to past sales
D) Pictures of comparables - A
Houses in the local area have had an increase in sales price and a decrease in days on
the market. A broker who is attempting to determine the current market value for a
residential listing would get the BEST estimate of value by using
A) a GRM as the primary consideration to determine value.
B) the cost approach with reproduction estimates.
C) comparables that are no more than six months old.
D) comparables that are no more than 12 months old. - C
Rental rates have increased by 2% in the last six months. Which appraisal principle
BEST explains this rate increase?
A) Principle of substitution
B) Principle of supply and demand
C) Principle of contribution
D) Principle of highest and best use - B
The current monthly GRM in a neighborhood is 200, and the annual income is $24,000.
What is the estimated value of a property in this neighborhood?
A) $200,000
B) $240,000
C) $400,000
D) $4,800,000 - C
The subject property has two baths and one fireplace. The property across the street
sold for $181,000 and has two baths and two fireplaces. The property behind the
subject sold for $175,000 and has two baths and no fireplace. In the area, baths are
worth $5,000 and fireplaces are worth $3,000. What is the subject property worth?
A) $175,000
B) $177,000
C) $178,000
D) $180,000 - C
,According to federal government lending regulations, a buyer purchasing a home must
have an appraisal for all the following types of financing EXCEPT
A) FHA.
B) VA.
C) loan sold to FNMA.
D) seller carry. - D
A buyer chooses a loan with an LTV ratio of 90%, which requires the purchase of PMI,
instead of a loan with an 80% LTV, which would not require the insurance. The buyer
MOST likely made this choice because
A) if the buyer defaults, PMI will protect the buyer by paying off the full loan.
B) the buyer will make a larger down payment but have smaller monthly payments,
including PMI.
C) paying PMI will mean that all mortgage payments and homeowners association fees
are deferred in case of default.
D) the buyer wants a smaller down payment, even though the buyer will have to pay
PMI. - D
A buyer is getting a new mortgage with a 95% loan-to-value ratio. The final loan amount
the lender will lend the buyer is determined by the
A) lower of the sales price or appraised value.
B) higher of the sales price or appraised value.
C) sales price only.
D) appraised value only. - A
The difference between using a partially amortized loan or an interest-only term loan is
that the partially amortized loan would result in
A) smaller payments and a smaller balloon payment.
B) larger payments and a smaller balloon payment.
C) smaller payments and a larger balloon payment.
D) larger payments and a larger balloon payment. - B
A borrower is using leverage on a new home loan at 90% loan to value. The
disadvantage of this type of leveraging is that
A) the borrower is at higher risk of defaulting on the loan.
B) it allows the borrower to pay less interest over the life of the loan.
C) a larger down payment is required.
D) there is rarely any requirement for PMI. - A
,A property owner has a large amount of equity in his home but does not want to sell it to
gain access to his money. What type of loan could the owner use to access the equity in
his home without having to make monthly loan payments?
A) Contract for deed
B) Purchase money mortgage
C) Reverse mortgage
D) Growth equity mortgage - C
A lender in first position filed documents to initiate foreclosure on a property. The
borrower offered to give the lender a deed in lieu of foreclosure. If the lender accepts
the deed in lieu, which of the following is TRUE?
A) The lender must continue with the foreclosure.
B) Upon receiving the deed, the lender acquires the property free and clear of all liens.
C) The lender will take title subject to any junior liens.
D) The lender needs to obtain a mortgagee's title policy to clear all liens. - C
A seller has agreed to act as the buyer's bank. The seller and the buyer signed a
contract for deed to help the buyer purchase the seller's home. When will the buyer
receive possession and title?
A) Full rights of possession and full legal title are received upon making the final loan
payment.
B) Partial legal title and full rights of possession are received at closing.
C) Title is received as agreed to in the contract, and possession is received upon
making the final loan payment.
D) Possession is received as agreed to in the contract, and title is received upon
making the final loan payment. - D
A contract for the purchase of real property might be terminated by all of the following
EXCEPT
A) the buyer, while under contract, has found a different property he prefers and has
asked the seller to terminate so he can purchase the other property.
B) a buyer sends written notice during the financing contingency; he is terminating the
contract due to being unable to qualify for a loan and requests the return of earnest
money.
C) the buyer has given the seller a large amount of repair items and the seller and the
buyer have agreed to mutually rescind the agreement due to inspection issues.
D) the buyer found out the property is not zoned to be used as the buyer wishes. The
buyer sends a notice to terminate based upon the contract contingency giving the buyer
10 days to verify the property use. - A
Which of the following is TRUE about the executory stage of a contract to purchase real
property?
, A) The seller has possession and equitable title.
B) The buyer has legal title and possessory rights once all the contingencies have
terminated.
C) This stage is for the seller to determine if the buyer's offer is acceptable or if the
seller should counteroffer.
D) The seller has legal title and the buyer is the equitable owner until title is conveyed at
closing. - D
A property is under contract. During the inspection, the buyer finds major structural
issues that the seller is unable to correct before closing. The buyer and the seller agree
to terminate the contract, which is known as
A) a valid contract which has become voidable by both parties.
B) specific performance for both parties with no monetary remedy.
C) mutual rescission of the contract.
D) a void contract with parties in agreement. - C
A buyer has requested that the seller give him a six-month opportunity to purchase the
seller's property for $400,000 with 10% down. The buyer has agreed to give the seller
$4,000 to hold the offer open for the next six months, with the seller keeping the $4,000
if the buyer decides not to purchase. The contract is
A) an open listing agreement.
B) an option agreement.
C) an implied sales agreement with both parties bound.
D) a bilateral agreement with both the buyer and seller bound because there was a
payment. - B
A minor has inherited a large old house from her father. The minor sells it to her aunt. Is
the purchase contract valid?
A) Yes, it is valid and enforceable.
B) No, it is void.
C) No, it is voidable by the minor.
D) No, it is unenforceable by the minor. - C
All of the following are common law requirements for a valid listing agreement EXCEPT
A) a definite termination date.
B) specific performance remedies should one of the parties default.
C) a negotiable commission clause.
D) be an expressed written agreement in order to enforce the commission clause. - B
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