PSI TRAINING EXAM
ASSESSMENT QUESTIONS
AND CORRECT ANSWERS
GRADED A+ 2025-2026
An easement can be terminated by - ANS-merger of titles.
Although states make specific laws governing water rights and the rights in land that
borders water, most states generally follow one of two basic doctrines regarding water
rights. Either riparian and littoral rights are automatically conveyed with property, or
all water rights are controlled by the state under the doctrine of prior appropriation.
The doctrine of prior appropriation is MOST likely to be followed in states where -
ANS-water is scarce.
A property is encumbered by a first mortgage of $60,000 and a second mortgage of
$23,500. The property has just been sold at a foreclosure auction to a speculating
investor for $88,000. Assume that all costs of the foreclosure sale are included in these
balances. Which of the following statements is FALSE regarding the distribution of
funds? - ANS-The second mortgagee receives nothing unless he forced the foreclosure
auction.
A distinguishing characteristic of owning property by land trust is that - ANS-the
identity of the legal owner is kept confidential.
A broker hires a salesperson as an independent contractor. In order for the
salesperson to be considered an independent contractor for federal income tax
purposes, the broker's written contract with the salesperson MUST specify - ANS-that
the salesperson will not be treated as an employee for federal income tax purposes.
A broker is teaching newly hired salespersons the correct way to complete a listing
agreement form. The broker is attempting to show the value of putting the correct
,property address on the listing. The BEST visual aid to help them learn how to do so
accurately would be - ANS-a subdivision plat.
A landowner wishes to build a neighborhood grocery store on a busy street in an area
zoned for residential use. Which would MOST likely be used to obtain permission for
this store? - ANS-Conditional use permit or zoning variance.
New sidewalks installed only on one particular street will probably be paid for by -
ANS-a special assessment.
A property owner died, having willed his real property to his two daughters. There is
still a chance that they could lose the land for a variety of reasons, but it CANNOT be
taken through - ANS-escheat.
A potential buyer is interested in the residential property of your client. The buyer
earns a living by making crafts and selling them from home and caring for children in
the late afternoons. In this situation, you should - ANS-suggest the buyer check the
zoning ordinances.
A competitive market analysis is MOST often used for - ANS-setting a listing price.
A formal appraisal will ALWAYS be REQUIRED when the - ANS-lender wants to sell the
mortgage to the secondary market.
A competitive market analysis takes into consideration - ANS-square footage of the
subject property.
An appraiser MUST be licensed or certified to handle Federally related work on
residential property valued at more than - ANS-$250,000.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to - ANS-demand immediate payment of the entire
note.
, Even if a loan applicant's current income seems adequate to qualify for a certain loan,
the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the
applicant's main source of income is - ANS-commission sales.
The FHA functions MOST like - ANS-an insurance company.
When a home is purchased using an ARM, the monthly loan payment on the mortgage
will - ANS-vary over the life of the loan depending on fluctuations in the interest rate
to which the loan is referenced.
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 - ANS-more variety of loan programs available.
Which Federal law regulates the advertisement of a lender's credit terms (rates,
payment, etc.)? - ANS-Regulation Z.
To what party or parties does the broker owe the fiduciary duty of care? - ANS-the
party or parties employing the broker
Under the terms of their listing contract, the owners may sell their house themselves
and pay no commission. If their agent sells it, a commission will be due. What kind of
listing contract do the owners have? - ANS-Exclusive agency listing.
Which of the following events would AUTOMATICALLY cancel a listing agreement? -
ANS-Property owner's death.
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 - ANS-he
is no longer the listing agent.
Under the common law of agency, licensees owe the broker with whom they are
associated all of the following duties EXCEPT - ANS-indemnification.
ASSESSMENT QUESTIONS
AND CORRECT ANSWERS
GRADED A+ 2025-2026
An easement can be terminated by - ANS-merger of titles.
Although states make specific laws governing water rights and the rights in land that
borders water, most states generally follow one of two basic doctrines regarding water
rights. Either riparian and littoral rights are automatically conveyed with property, or
all water rights are controlled by the state under the doctrine of prior appropriation.
The doctrine of prior appropriation is MOST likely to be followed in states where -
ANS-water is scarce.
A property is encumbered by a first mortgage of $60,000 and a second mortgage of
$23,500. The property has just been sold at a foreclosure auction to a speculating
investor for $88,000. Assume that all costs of the foreclosure sale are included in these
balances. Which of the following statements is FALSE regarding the distribution of
funds? - ANS-The second mortgagee receives nothing unless he forced the foreclosure
auction.
A distinguishing characteristic of owning property by land trust is that - ANS-the
identity of the legal owner is kept confidential.
A broker hires a salesperson as an independent contractor. In order for the
salesperson to be considered an independent contractor for federal income tax
purposes, the broker's written contract with the salesperson MUST specify - ANS-that
the salesperson will not be treated as an employee for federal income tax purposes.
A broker is teaching newly hired salespersons the correct way to complete a listing
agreement form. The broker is attempting to show the value of putting the correct
,property address on the listing. The BEST visual aid to help them learn how to do so
accurately would be - ANS-a subdivision plat.
A landowner wishes to build a neighborhood grocery store on a busy street in an area
zoned for residential use. Which would MOST likely be used to obtain permission for
this store? - ANS-Conditional use permit or zoning variance.
New sidewalks installed only on one particular street will probably be paid for by -
ANS-a special assessment.
A property owner died, having willed his real property to his two daughters. There is
still a chance that they could lose the land for a variety of reasons, but it CANNOT be
taken through - ANS-escheat.
A potential buyer is interested in the residential property of your client. The buyer
earns a living by making crafts and selling them from home and caring for children in
the late afternoons. In this situation, you should - ANS-suggest the buyer check the
zoning ordinances.
A competitive market analysis is MOST often used for - ANS-setting a listing price.
A formal appraisal will ALWAYS be REQUIRED when the - ANS-lender wants to sell the
mortgage to the secondary market.
A competitive market analysis takes into consideration - ANS-square footage of the
subject property.
An appraiser MUST be licensed or certified to handle Federally related work on
residential property valued at more than - ANS-$250,000.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration
clause. This permits the lender to - ANS-demand immediate payment of the entire
note.
, Even if a loan applicant's current income seems adequate to qualify for a certain loan,
the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the
applicant's main source of income is - ANS-commission sales.
The FHA functions MOST like - ANS-an insurance company.
When a home is purchased using an ARM, the monthly loan payment on the mortgage
will - ANS-vary over the life of the loan depending on fluctuations in the interest rate
to which the loan is referenced.
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 - ANS-more variety of loan programs available.
Which Federal law regulates the advertisement of a lender's credit terms (rates,
payment, etc.)? - ANS-Regulation Z.
To what party or parties does the broker owe the fiduciary duty of care? - ANS-the
party or parties employing the broker
Under the terms of their listing contract, the owners may sell their house themselves
and pay no commission. If their agent sells it, a commission will be due. What kind of
listing contract do the owners have? - ANS-Exclusive agency listing.
Which of the following events would AUTOMATICALLY cancel a listing agreement? -
ANS-Property owner's death.
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 - ANS-he
is no longer the listing agent.
Under the common law of agency, licensees owe the broker with whom they are
associated all of the following duties EXCEPT - ANS-indemnification.
