Questions and Answers
What is the value limit for an appraiser to handle federally related work on residential property?
$250,000
Which of the following categories of adjustment is NOT essential when preparing a market data estimate of value?
Which of the following is NOT a method to calculate the reproduction or replacement cost of a building?
In which location is a parking lot likely to bring the highest sales price?
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What principle of value is demonstrated when parcels A, B, and C are assembled under one owner?
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What should a salesperson suggest when asked for a listing price recommendation?
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The FHA functions most like what type of entity?
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What is a loan that requires the borrower to pay interest only until the maturity date called?
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Which of the following statements about discount points is FALSE?
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When is flood insurance REQUIRED to obtain a loan?
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Usury laws were enacted to protect whom?
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What term describes a buyer who makes an offer on a property and allows the seller to retain title until the principal is paid off?
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The Equal Credit Opportunity Act addresses all of the following EXCEPT?
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What kind of listing contract allows the owners to sell their house themselves without paying a commission?
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What regulation might a real estate licensee violate by accepting an undisclosed fee for referrals?
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Which event would AUTOMATICALLY cancel a listing agreement?
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Another term for the owner of a property listed with your firm is what?
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When does a broker earn their commission in most listing contracts?
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What should a broker inform a caller if their listing expired and was relisted with another broker?
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What type of agency is demonstrated when a principal authorizes an agent to perform a specific act?
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What do the terms 'littoral,' 'riparian,' and 'appropriative' refer to?
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What is a salesperson who lists a property with a contract allowing subagency and dual agency classified as?
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Depreciation is calculated based on what?
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Who holds the title when a property owner uses his home as collateral for a loan?
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What is a competitive market analysis MOST often used for?
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What should a listing agent do if a seller informs them about past termite treatment?
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Which of the following is NOT a method to calculate reproduction or replacement cost of a building?
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What is the adjustment made at closing when a buyer assumes a mortgage of $110,000?
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What is the penalty if conditions of purchase in a deed are violated?
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What is the purpose of requiring an earnest money deposit in a real estate sales contract?
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What notice is provided to subsequent purchasers once a judgment is recorded?
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What type of map is MOST useful for describing the terrain of a very hilly lot?
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What do some Federal agencies require regarding lead paint disclosure?
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What should a listing agent communicate to potential buyers if the seller mentions neighbor disturbances?
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What is a major reason for buying a condominium over a detached single-family home?
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If a seller includes kitchen appliances in a sales contract and takes them, what can the buyer do?
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What is a loan requiring interest-only payments until maturity called?
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What was the reason for the termination of the real estate contract for an unlicensed whiskey sales operation?
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When an agency allows subagency and dual agency, what is a salesperson classified as?
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What term describes the relationship where the agent is in a position of trust to the principal?
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What is an agreement to purchase that has NOT yet closed called?
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What is the primary focus of a broker compiling a competitive market analysis?
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What is the power of the government to regulate for public welfare called?
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If a borrower can afford $1,000 monthly payments for a mortgage at 8.5% for 30 years, how large a loan can they afford?
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What is the purpose of an Environmental Impact Statement (EIS)?
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In an exclusive right-to-sell listing, how many brokers can an owner list the property with?
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What can an owner do if they receive a better offer while a counteroffer is pending?
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Antitrust laws prohibit competing brokers from which of the following?
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What can a buyer seek if misrepresentation occurs regarding property taxes?
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How much will it cost to retile a kitchen if the sellers give an allowance of $16.95 per square yard for a 10ft x 14ft kitchen?
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According to the law of supply and demand, which of three identical homes would sell for the lowest price?
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What should be done first when mold problems are found?
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What does an acceleration clause in a mortgage permit the lender to do if the borrower defaults?
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If a buyer is getting a fully amortized loan for $220,000, what is the difference between the payments for 15 years at 5.5% and 30 years at 6.5%?
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Who would most likely prefer a property manager emphasizing maintenance of value over profitability?
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What is a written agreement in which a purchaser agrees to buy and a seller agrees to sell called?
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What does Errors and Omissions insurance cover for a broker?
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What is an example of a contract terminated due to inability to perform?
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What disclosures must appear if 'trigger terms' are used in an advertisement?
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Who do deed restrictions apply to?
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In most states, how is foreclosed property sold?
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What type of leasehold does a tenant have after a 15-month lease and one month's rent payment?
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What adjustment category is NOT essential when compiling a market data estimate of value?
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Which Federal law regulates advertisements of a lender's credit terms?
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What principle explains the expected increase in value for a residential property in an area becoming commercial?
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What type of contract obliges sellers to convey title if buyers meet certain conditions?
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What type of agency is formed when a principal authorizes an agent to perform a specific act?
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What is the advantage of a Federal court hearing for a party alleging violation of Federal Fair Housing laws?
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Who is a managing broker responsible for?
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What can a trustee do when land is conveyed to them?
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What will be the seller's credit for property taxes if they paid $960 for the entire year and the closing is on March 1?
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If an owner lists her home at a 7% commission rate and wants to net $45,000 after fees, what should the selling price be?
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What did the Jones vs. Mayer decision of 1968 achieve?
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What describes a broker who finances a project with exclusive selling rights?
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What does a broker's claim about the property having 'the world's purest well water' exemplify?
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What should a broker do if a key is requested for a property that is no longer listed under their agency?
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What is the adjustment made at closing if the buyer assumes a mortgage with a $600 monthly interest charge?
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Is racial discrimination in rental of rooms or apartments permitted?
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What are crops that require annual planting considered at the time of harvest?
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Who retains fee ownership under a land contract for deed?
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Which statement about discount points is FALSE?
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What is the PRIMARY purpose of zoning ordinances?
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What can a creditor do to collect against a debtor who will not pay after having obtained a judgment?
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What are the economic characteristics of land?
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How can an easement be terminated?
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What event would AUTOMATICALLY cancel a listing agreement?
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If prospective buyers signed a counteroffer while also finding another acceptable property, what is the status of the contracts?
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What kind of leasehold does a tenant have if they signed a lease and then paid rent after it expired?
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What is the method a creditor uses to obtain satisfaction against a debtor who will not pay?
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What type of ownership form is MOST often used in timeshare ownership programs?
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How can real property be converted to personal property?
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What characteristic MOST likely explains the $20,000 price difference between two identical lots?
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What legal description should be used in MOST transaction documents?
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What would a landowner use to obtain permission for a grocery store in a residential area?
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What factors does an environmental impact statement typically describe?
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Who will likely pay for new sidewalks installed only on one street?
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Who can bring a lawsuit for inverse condemnation?
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Which doctrine is likely followed by states where water is scarce?
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What should be done when multiple approaches indicate different property values?
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Study Notes
Water Rights
- Terms associated: littoral, riparian, appropriative.
- These rights govern water use depending on the property's proximity to water bodies.
Agency Relationships
- Salesperson acting as an agent to the broker while being a subagent to the principal under specific listing contracts.
- Dual agency allows for both sides of a transaction to be represented by the same agent.
Property Valuation and Sale
- Depreciation is calculated based solely on the building's cost.
- Competitive market analysis assists in setting appropriate listing prices.
- Earnest money deposits show a buyer's commitment to a contract.
Legal and Tax Implications
- Properties can incur liens through mortgage agreements, with title held by the mortgagor.
- A judgment secures constructive notice for subsequent buyers.
- Property owners must disclose known issues within legal limits.
Financing and Mortgage Situations
- Assumption of an existing mortgage creates a financial adjustment at closing (debits and credits for buyer and seller).
- Various loan types exist, including straight (term) loans that require principal payment at maturity.
Property Management and Condominiums
- Property management balances maintenance of value with income generation.
- Condominiums are often more affordable than single-family homes.
Contracts and Agreements
- Executory contracts indicate ongoing obligations that have not been completed.
- Specific performance allows a buyer to enforce terms when a seller fails to comply with agreed conditions.
Environmental and Zoning Considerations
- Environmental Impact Statements (EIS) assess the potential consequences of proposed projects on the ecosystem.
- Zoning laws primarily implement local master plans and guide land use decisions.
Ownership and Transfer of Property
- Tenancy at will allows continued occupancy after lease expiration; all rental agreements must include legal descriptions.
- Deed restrictions apply to all present and future owners, impacting property use.
Legal Proceedings and Fair Housing
- Lawsuits related to federal fair housing violations can yield unlimited damages.
- The Jones vs. Mayer case reaffirmed civil rights protections against racial discrimination.
Sales and Marketing
- Market data estimates are informed by adjustments based on factors like location and square footage.
- The FHA operates similarly to an insurance company in the mortgage realm.
Economic Conditions and Land Characteristics
- Economic characteristics of land include scarcity, location, and durability, influencing property value.
- Legal methods exist to terminate easements, such as merging titles.
Property Assessments and Sales
- Special assessments fund specific improvements like sidewalks, while public auctions typically facilitate property foreclosure sales.
- Distinct process mechanics dictate property listing and sale dynamics within the real estate market.
Contractual Obligations and Adjustments
- Understanding contract validity amidst changing buyer interests is crucial.
- Mortgage adjustments during closing ensure fair distribution of financial responsibilities related to property ownership changes.
Additional Key Facts
- Discount points manage loan interest rates and costs, commonly understood by both buyers and sellers.
- Anticipation principle suggests increasing property values in a transitional neighborhood towards commercial use.### Payment of Commissions
- Commissions for real estate agents can be paid by either the buyer or the seller.
- Calculated as a percentage of the selling price of a property.
Flood Insurance Requirement
- Flood insurance is required when a property is located in a flood hazard zone to secure a loan.
Usury Laws
- Usury laws are designed to protect borrowers from excessive interest rates on loans.
Vendee in Real Estate
- When a buyer makes an offer on a property and pays a portion upfront while allowing the seller to retain title until the principal is paid off, the buyer is referred to as a vendee.
Equal Credit Opportunity Act
- This act addresses discrimination in lending and requires written statements for credit denial but does not standardize interest rates.
Listing Contracts
- An exclusive agency listing allows property owners to sell their house themselves without paying a commission, but a commission is due if the agent sells it.
Violation of RESPA
- Accepting an undisclosed fee for referring a buyer to a specific title company may result in a violation of the Real Estate Settlement Procedures Act (RESPA).
Listing Agreements Termination
- A listing agreement is automatically canceled upon the death of the property owner.
Client Definition
- The owner of a property listed with a real estate firm is referred to as the client.
Broker Commission Earned
- A broker typically earns their commission when the seller accepts the buyer's offer in most listing contracts.
Listing Agent Status
- After a listing expires, if the property is listed with another broker, the original broker should inform inquiries that they are no longer the listing agent.
Special Agency Definition
- When a principal grants an agent the authority to perform a specific act or transaction, it is termed special agency.
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Description
Prepare for the PSI NJ Real Estate Exam with this comprehensive practice test featuring flashcards on key terminology and concepts. Boost your understanding of water rights, agency relationships, and depreciation to excel in your exam. Ideal for real estate professionals seeking to enhance their knowledge.