3 hour final Exam ( MI sales person PSI exam)

1. A veteran buying a home from a for sale by owner and financing it with a VA loan can do all of the following except:

Immediately rent the home after closing to make the monthly payments

2. After Charlie's death, his will indicates that all of his real property must go to charity what can Charlie's wife do?

Nothing

3. Two Brokers decide to go broke 60/40 in favor of the listing broker, and each broker split 50 Dash 50 with his sales person. How much will the listing sales person make if the house is sold for $134,500 & commission rate is 6%?

$2,421

4. The real estate board, appointed by the governor and consisting of nine voting members, has authority to decide on all of the following except

Waiving continuing education requirements for an individual who proves to be very competent.

5. Property is appraised for $158,000 and tax rate is 33 mills. How much tax is due?

2,607

6. A shape six miles by six miles square that results from intersection of range lines and township lines is called a:

Township

7. A parcel of land measuring 485 ft by 1,210 ft sold for $122,000. Calculate the approximate price per acre.

9,056

8. The following is an example of functional obsolescence?

Outdated plumbing.

9. An agent's exaggerated opinion of property features is known as:

Puffing

10. After purchasing a home, the Johnson's purchased a dishwasher and installed it into the kitchen cabinets. This item has now become:

A fixture

11. David and Susan purchased real estate as tenants in common. All of the following is true regarding their ownership except:

C. When David dies, his share belongs to Susan automatically and without probate court.

12. John deeded property to his mother with the stipulation that the mother could own it for as long as she lived and upon her death property will go to charity. This is an example of:

C. life estate.

13. David's architect told him that the house built on the lot must be within 20 feet from the lot line, while the zoning ordinance requires a 30-ft setback. David must apply and receive:

A. A variance.

14. As a special agent of the owner, the salesperson needs written authority to do all of the following except:

D. Disclose all known material facts to a potential buyer.

15. After noticing the opening of a new group home in a neighborhood, a licensee contacts the surrounding subdivision owners to notify them of that fact, suggesting that they may want to sell their property before it loses value. This illegal conduct is known as: A.

Block-busting

16. After renting a house to a family of four, the landlord is notified by the tenant that their daughter is now in a wheelchair after having surgery and asks permission to build a ramp at the family's own expense. The owner must:

Approve the ramp after making sure it is constructed according to codes and handicap specifications.

17. A buyer wants to buy a parcel of land but only if he can get the zoning changed. He is able to place a $10,000 deposit on the purchase agreement subject to obtaining a change in the zoning or purchase a 90-day option by paying a $10,000 option fee. Which of the following is true regarding the buyer's choices?

He loses his option unless he exercised it before expiration of the 90-day period.

18. Seller is asking $300,000 for property and received an offe for $250,000. He countered for $280,000, but before the buyer was able to sign the counteroffer, seller received a full-price $300,000 offer; therefore he contacted the first buyer to revoke the counteroffer before it was accepted. Which of the following is true regarding this situation?

As long s as as the first buyer has not accepted the counteroffer yet, seller has the right to revoke it and accept the second, full-price offer.

19. House is sold for $250,000 and the lender's appraiser decided that the house is worth $220,000. Based on an 80% loan ratio and one point origination fee, how much is the loan origination fee?

$1,760

20. When Sharon leased a store in a strip center for three years to open up her ice cream store, she wanted to make sure that at the end of the lease she had the right to renew it or leave the premises after lease expiration in case the business was not as good as she thought it would be. Sharon is advised to negotiate:

A lease option

21. When a title search reveals a cloud, the best cure is:

D. Initiate "quieting title proceedings".

22. The Real Estate Settlement Procedures Act applies to:

Federally related loans for one-to four-family dwellings.

23. The amount of points $120,000. How many points was the bank charging? paid were $2,400 and the loan was

2

24. The price is $150,000, loan-to-value ratio 80% with 3 points. How much does buyer need to close transaction?

33,600

25. Sarah sold property for $200,000 and agreed to pay 6% commission as well as 2 points for the buyer's loan as concessions based on 90% loan. What would she clear at closing?

$184,400

26. A deed that contains all the covenants of title is a:

General warranty deed

27. A tax that is due to the county and the state for recording a deed and is paid by the seller is?

Transfer tax (revenue stamps)

28. The right of the government to enforce zoning laws, building codes, health codes, and environmental protection laws is exercised under:

Police power

29. When a buyer finances property and signs a promissory note in favor of the lender, what accompanies the promissory note?

Mortgage

30. Where would an agent refer a potential buyer who wants to obtain an FHA loan?

B. To a local lending institution.

31. John is a veteran who obtained a VA loan but has just been notified that he is being transferred. What could John do with his present home?

Allow a non-veteran to assume the loan and go on to purchase another home.

32. When a primary lender uses all its funds for home mortgages and ends up with a number of notes and mortgages, then the normal procedure is to:

Sell mortgages and notes to the secondary market and use the cash obtained to lend to borrowers.

33. The primary purpose of the federal truth-in-lending (regulation Z) is to:

Make it possible for home borrowers to shop interest rates and terms by mandating the use of disclosures and Annual Percentage Rate (APR).

34. Sharon tried to sell her home on a land contract but was told by her lender that she must pay off the mortgage she owed to them if the home was sold. The lender could actually call the entire balance due if Sharon sells the home because the mortgage contains:

Due-on-sale [alienation] clause

the company badge and have a magnetic sign on her car door. 35. Sharon works for Sunshine Realty. She is required to wear She was told that she could work any number of hours she wants and gets paid only if she produces sales. Sharon's position is that of:

An independent contractor

36. Max works for Green Valley Realty and has a buyer who is from out of town looking for a house. Through the multiple listing network, Max finds out that Sunshine Realty has a house listed that his buyer will probably like. Max has been working with this buyer for 60 days (without signing a "Buyer-Broker Agreement") and really wants to help him, and even though the buyer works with other real estate companies once in a while, Max feels that as long as he finds him the right house the buyer will make an offer through his company. Max notices that the listing with Sunshine Realty has been on the market for several months and therefore the seller should be motivated, to say the least. Max also knew that the house is located in a neighborhood that at one time was supposed to have been affected by underground gas leaks from a neighboring oil refinery. Assuming that Max has never met the seller of the house before, which of the following is true regarding what Max should disclose to the buyer?

Alert the buyer to the contamination but make no statement as far as seller being anxious.

When charges are filed against a licensee, the licensee:

May attend an informal hearing and then may attend a formal hearing if the informal hearing

38. All of the following are examples of limitations except:

Turning licensee over to local prosecutor to bring criminal charges.

39. All of the following activities may be conducted by a Broker except:

D. Sell a mobile home.

40. A non-living entity such as a corporation may be licensed as a broker as long as it consists of at least:

One associate broker.

41. A temporary license will probably be allowed by the Department in which of the following circumstances?

Salesperson is trying to move between two companies and does not want to wait for the wall license to be processed.

42. Offer is received by salesperson and seller could not be reached in Canada on vacation. The licensee must:

As long as seller can be contacted, the offer must be communicated to him unless seller specifically instructs licensee to wait.

43. Deposit check is made payable to Sally Jones, a salesperson for Sunshine Realty. Sally must:

Refuse to accept the check.

44. John, a broker in Detroit who has a permanent office, wants to open up a branch in Grand Rapids. He must:

В. License the branch with the Department and make sure it is managed by an associate broker.

45. A condominium developer who wants to convert an apartment building into condominiums and sell the units one by one must:

Condominium buyer's handbook and disclosure statement.

46. A purchaser of a new condominium unit is giving nine business days to rescind (revoke) purchase agreement after developer delivers certain documents to purchaser. All of the following documents are included except:

Copy of the builders license

47. An adjustable rate mortgage (ARM) has a clause that cites a possible increase or decrease in the interest rate based on certain market conditions. Information regarding the changes would most likely be found in the:

Escalation clause

48. Sharon moved out from her apartment, ignoring her landlord's notice that she must give him a forwarding address within four (4) days after vacating. Which of the following is true regarding this situation?

If the landlord finds damages caused by the without sending the tenant any notice or details. tenant, he may use a portion or all of the deposit

49. The type of deed that provides the least liability to the grantor is:

Full warranty deed

50. All of the following are examples of federally chartered secondary markets except:

A. Commercial savings banks

51. To estimate the value of a 20-year old residence an appraiser would use which of the following appraisal methods?

C. After seller has had an opportunity to accept the agreement and declines

53. Which of the following is (are) true concerning the properties registered under the condominium law?

D. Each unit has its own deed and may be conveyed or encumbered as if it were separate and distinct from all other apartments

54. XYZ Mortgage Company does not lend money to applicants who intend to purchase property located north of Illinois Avenue and east of Highway 98. This practice is best described as:

Redlining

55. The following persons must have a license, to be able to perform Real Estate service, and receive compensation:

D. Person negotiating for the sale of a business opportunity.

56. If three brokers were involved in an open listing, and one of the brokers sold the property, then:

B. Only the broker who sold the property would receive the commission.

57. A lease, that calls for a certain amount of rent, and the landlord pays all the expenses, is:

A Gross Lease.

58. A developer who wants to build a retail outlet on land zoned for residential use must try to get

A zoning variance

59. The covenant that gives assurance by the Grantor to the Grantee that he does have the interest being conveyed in full is called the:

Covenant of Seisin

60. The discount points charged by a lender on a loan is a percentage of the:

Loan amount.

61. All of the following is true except:

A Broker is free to advertise his principal residence for sale as a private party.

62. An agent is usually considered to have earned a commission:

If he produces a buyer willing, able and ready to buy the property.

63. An installment contract (land contract) for the sale of estate does not give the buyer:

Legal title to the property.

64. A broker can take which of the following for a deposit with seller's approval?

An acceleration payment.

A balloon payment

66. Buyer made an offer at less than asking price. Seller then made a counter offer. Buyer would not accept the counter offer. If seller then agreed to accept the first offer, which of the following statements about the transaction is true?

The buyer was released from the offer when the seller made a counter offer

67. All but which one of the following would be considered in the cost approach appraisal method? A.

Operating expenses

68. Which of the following is permissible under the law?

Refusing to rent to a person because he is a social drinker

69. An investor took out a loan and gave three different parcels of land as collateral for the mortgage, this is known as:

Delivered and Accepted

69. An investor took out a loan and gave three different parcels of land as collateral for the mortgage, this is known as:

payment A blanket mortgage.

70. For a deed to pass title, it must be:

Delivered and Accepted

71. An estate that is held by husband and wife is called

Tenancy by the entireties

72. For a deed to be considered a General Warranty Deed, it must contain:

A. All covenants of title.

73. Deeds are recorded to provide:

Constructive/public notice.

74. A broker receiving a deposit:

Must deposit the funds in his trust account no all parties have signed the purchase agreement. later than 2 banking days after receiving notice that

75. A person who owns property alone is known as a:

Tenant in severalty

76. An appraiser measuring the area of a house would use the:

Exterior dimensions.

77. Which of the following situations is considered to violate the law?

Village must be at least 45 years old to be accepted. A. Persons applying for Green Acres Retirement

78. An owner of a 40-acre parcel of land who wants to split land without formally creating a subdivision can get the following number of parcels:

7

79. A person who authorizes another person to act on his behalf, is called:

D. The principal

80. The following does have the right of survivorship:

Joint tenants

81. An "acceleration clause" found in a mortgage would mean that:

A. upon the happening of a certain event, the entire

82. The size of a township is:

36 square miles

83. Michigan state housing and development authority (MSHDA) provides below market interest rates to a borrower who's income does not exceed a certain limit in all of the following circumstances except?

If the loan is for refinancing.

84. Which of the following conditions is an indication of functional obsolescence?

Celings lower tha customary

85. The right of government to take private property, for public use is called:

Eminent domain

86. Able, a landowner, builds a small factory in the city. After the factory is built, the city adopts a zoning ordinance in which the area in question is designated a residential area. Which of the following statements about Able's alternatives is true?

Able may continue to operate as a nonconforming use.

87. Which one of the following statements is correct?

A closing may be conducted contrary to the purchase agreement if there's another agreement ( amendment )made in writing to that affect between the buyers and sellers.

88. Under Truth-in-Lending, it is permissible to advertise which of the following statements alone?

89. All but which one of the following are included in the "finance charge" under the Truth-in-Lending provisions?

Attorney's fees

90. By which of the following forms of ownership may a school be sold with the provision that title will revert to the grantor if the property is no longer used as a school?

Determinable fee

91. Mr. Able owns unit 22 in the Blueridge condominium. What part of the condominium does Able own without sharing with the other co-owners?

The air space within Apt. 22

92. Zoning ordinances usually cover such matters as:

Setback lines.

93. A line of townships that runs in a North-South direction is called:

The Range.

94. What type of reduction in value is present when a noisy airport is located next to a property?

Economic obsolescence

95. How many acres are there in a parcel 348 by 625 feet?

C. 5 acres

96. Upon receipt of an offer to purchase, the licensee must recommend to the buyers that:

They get provided with title insurance.

97. In the process of obtaining a listing on a property that shares a driveway with the adjacent house, the owner insists that you don't mention this fact to any prospective purchaser. Regarding this problem, you should:

Refuse the listing.

98. An owner of land may stop another person from gaining adverse possession over her land by:

Either A or B.

99. Property that is of temporary and movable nature, is called:

Personal property

A quick claim Deed contains:

Conveyance of such interest, as the grantor has in the property without warrenty