PSI NATIONAL REAL ESTATE EXAM
COMPREHENSIVE PRACTICE (2026/2027 Edition)
PSI Examination Standards & National Real Estate Licensing Preparation
100 Questions with Correct Answers & Rationale
Format: 100 multiple-choice questions (single best answer, A–D).
Structure: Ten sections spanning the PSI national real estate content areas.
Cognitive ~30% recall • ~50% application • ~20% analysis.
levels:
Grading: One point per question; correct answer and rationale provided after each
item.
Content basis: PSI testing blueprint, ARELLO/AQB standards, current federal real estate
laws (Fair Housing, TILA/RESPA-TRID, ADA, lead-paint), and national
content.
Special 5 two-step math problems; 3 TRID/RESPA-TILA items; 2 comprehensive
inclusions: case studies (residential contingencies; commercial triple-net lease with CAM
& escalation).
Important These are practice questions for educational purposes only; actual PSI exam
note: content is proprietary and not publicly released. Verify your state’s licensing
requirements.
, Section 1: Property Ownership, Land Use, and Environmental Issues (12
questions)
Q1: A cooperative form of ownership is best described as ownership of a:
A. Share in a corporation that holds title to the building, with a proprietary lease [CORRECT]
B. Unit in a fee-simple condominium
C. Freehold estate in the entire building
D. Life estate in a common area
Correct Answer: A
Rationale: A is correct: in a cooperative, the buyer owns stock/shares in the corporation holding title and
receives a proprietary lease. B, C, and D describe other ownership forms.
Q2: Which of the following is a public land use control?
A. Restrictive covenant in a deed
B. Zoning ordinance [CORRECT]
C. Homeowners' association rule
D. Private easement
Correct Answer: B
Rationale: A is correct: zoning is a public (governmental) land use control. B, C, and D are private controls.
Q3: Environmental contamination that pre-exists a property transfer and is not caused by the new
owner may still create liability under which concern?
A. No liability ever transfers
B. Only the government can be liable
C. The principle of strict liability for contaminated land [CORRECT]
D. Liability is limited to one year
Correct Answer: C
Rationale: A is correct: environmental contamination can carry strict liability that may affect the owner. B, C,
and D are incorrect.
Q4: A purchaser is most likely to conduct a Phase I environmental site assessment to:
A. Determine the interest rate
B. Set the commission
C. Establish the property's assessed value
D. Identify potential environmental contamination before acquiring property [CORRECT]
Correct Answer: D
Rationale: A is correct: a Phase I ESA identifies potential contamination risks. B, C, and D are unrelated.
Q5: Which of the following best describes a condominium owner's interest?
A. Fee simple title to the individual unit plus an undivided interest in common areas [CORRECT]
B. Only a lease of the unit
C. Shares in a corporation only
D. A life estate in the building
Correct Answer: A
Rationale: A is correct: a condominium owner holds fee simple title to the unit and an undivided interest in the
common elements. B, C, and D are incorrect.
PSI National Real Estate Exam Practice (2026/2027 Edition) Page 2
, Q6: A public authority compensates a landowner for taking land for a public highway. This is an
exercise of:
A. Police power without compensation
B. Eminent domain with just compensation [CORRECT]
C. Escheat
D. Dedication
Correct Answer: B
Rationale: A is correct: eminent domain is the taking of private property for public use with just compensation.
B, C, and D are incorrect.
Q7: Radon, lead-based paint, asbestos, and underground storage tanks are all examples of:
A. Types of mortgages
B. Forms of title
C. Potential environmental hazards relevant to real estate transactions [CORRECT]
D. Agency duties
Correct Answer: C
Rationale: A is correct: these are environmental concerns that affect property transactions and disclosures.
B, C, and D are unrelated.
Q8: A homeowner's association covenant that requires all homes to be painted within a limited color
palette is a form of:
A. Public zoning control
B. Government taking
C. Easement by prescription
D. Private land use control (restrictive covenant) [CORRECT]
Correct Answer: D
Rationale: A is correct: restrictive covenants by a HOA are private land use controls. B, C, and D are not
private covenants.
Q9: Which ownership form provides the most complete bundle of rights with no restrictions on
disposition?
A. Fee simple absolute [CORRECT]
B. Life estate
C. Leasehold estate
D. Fee simple defeasible
Correct Answer: A
Rationale: A is correct: fee simple absolute is the highest form of ownership with full rights. B, C, and D have
restrictions or limited duration.
Q10: A 'fee simple defeasible' estate is one that:
A. Lasts only for one's life
B. Can be terminated if a specified condition is violated [CORRECT]
C. Is a leasehold
D. Cannot be conveyed
Correct Answer: B
Rationale: A is correct: a fee simple defeasible ends upon violation of a condition. B, C, and D are incorrect.
PSI National Real Estate Exam Practice (2026/2027 Edition) Page 3
COMPREHENSIVE PRACTICE (2026/2027 Edition)
PSI Examination Standards & National Real Estate Licensing Preparation
100 Questions with Correct Answers & Rationale
Format: 100 multiple-choice questions (single best answer, A–D).
Structure: Ten sections spanning the PSI national real estate content areas.
Cognitive ~30% recall • ~50% application • ~20% analysis.
levels:
Grading: One point per question; correct answer and rationale provided after each
item.
Content basis: PSI testing blueprint, ARELLO/AQB standards, current federal real estate
laws (Fair Housing, TILA/RESPA-TRID, ADA, lead-paint), and national
content.
Special 5 two-step math problems; 3 TRID/RESPA-TILA items; 2 comprehensive
inclusions: case studies (residential contingencies; commercial triple-net lease with CAM
& escalation).
Important These are practice questions for educational purposes only; actual PSI exam
note: content is proprietary and not publicly released. Verify your state’s licensing
requirements.
, Section 1: Property Ownership, Land Use, and Environmental Issues (12
questions)
Q1: A cooperative form of ownership is best described as ownership of a:
A. Share in a corporation that holds title to the building, with a proprietary lease [CORRECT]
B. Unit in a fee-simple condominium
C. Freehold estate in the entire building
D. Life estate in a common area
Correct Answer: A
Rationale: A is correct: in a cooperative, the buyer owns stock/shares in the corporation holding title and
receives a proprietary lease. B, C, and D describe other ownership forms.
Q2: Which of the following is a public land use control?
A. Restrictive covenant in a deed
B. Zoning ordinance [CORRECT]
C. Homeowners' association rule
D. Private easement
Correct Answer: B
Rationale: A is correct: zoning is a public (governmental) land use control. B, C, and D are private controls.
Q3: Environmental contamination that pre-exists a property transfer and is not caused by the new
owner may still create liability under which concern?
A. No liability ever transfers
B. Only the government can be liable
C. The principle of strict liability for contaminated land [CORRECT]
D. Liability is limited to one year
Correct Answer: C
Rationale: A is correct: environmental contamination can carry strict liability that may affect the owner. B, C,
and D are incorrect.
Q4: A purchaser is most likely to conduct a Phase I environmental site assessment to:
A. Determine the interest rate
B. Set the commission
C. Establish the property's assessed value
D. Identify potential environmental contamination before acquiring property [CORRECT]
Correct Answer: D
Rationale: A is correct: a Phase I ESA identifies potential contamination risks. B, C, and D are unrelated.
Q5: Which of the following best describes a condominium owner's interest?
A. Fee simple title to the individual unit plus an undivided interest in common areas [CORRECT]
B. Only a lease of the unit
C. Shares in a corporation only
D. A life estate in the building
Correct Answer: A
Rationale: A is correct: a condominium owner holds fee simple title to the unit and an undivided interest in the
common elements. B, C, and D are incorrect.
PSI National Real Estate Exam Practice (2026/2027 Edition) Page 2
, Q6: A public authority compensates a landowner for taking land for a public highway. This is an
exercise of:
A. Police power without compensation
B. Eminent domain with just compensation [CORRECT]
C. Escheat
D. Dedication
Correct Answer: B
Rationale: A is correct: eminent domain is the taking of private property for public use with just compensation.
B, C, and D are incorrect.
Q7: Radon, lead-based paint, asbestos, and underground storage tanks are all examples of:
A. Types of mortgages
B. Forms of title
C. Potential environmental hazards relevant to real estate transactions [CORRECT]
D. Agency duties
Correct Answer: C
Rationale: A is correct: these are environmental concerns that affect property transactions and disclosures.
B, C, and D are unrelated.
Q8: A homeowner's association covenant that requires all homes to be painted within a limited color
palette is a form of:
A. Public zoning control
B. Government taking
C. Easement by prescription
D. Private land use control (restrictive covenant) [CORRECT]
Correct Answer: D
Rationale: A is correct: restrictive covenants by a HOA are private land use controls. B, C, and D are not
private covenants.
Q9: Which ownership form provides the most complete bundle of rights with no restrictions on
disposition?
A. Fee simple absolute [CORRECT]
B. Life estate
C. Leasehold estate
D. Fee simple defeasible
Correct Answer: A
Rationale: A is correct: fee simple absolute is the highest form of ownership with full rights. B, C, and D have
restrictions or limited duration.
Q10: A 'fee simple defeasible' estate is one that:
A. Lasts only for one's life
B. Can be terminated if a specified condition is violated [CORRECT]
C. Is a leasehold
D. Cannot be conveyed
Correct Answer: B
Rationale: A is correct: a fee simple defeasible ends upon violation of a condition. B, C, and D are incorrect.
PSI National Real Estate Exam Practice (2026/2027 Edition) Page 3
