PSI REAL ESTATE SALESPERSON PRACTICE EXAM
QUESTIONS AND ANSWERS
1. A couple listed their home with a broker. After 2 months, the
seller found a buyer, and the sale closed. The seller was not
obligated to pay a commission to the broker. This listing was MOST
likely
1. an exclusive agency listing.
2. an exclusive right to sell listing.
3. a net listing.
4. an advance fee listing.
ANS an exclusive agency listing
2. What critical aspect of the property inspection process MUST
licensees convey to prospective buyers?
1. Difficulty of finding competent inspectors.
2. Appropriate fee splitting between inspectors and brokers.
3. Need for inspections to be completed within the time stated in the
contract.
4. Likelihood that the inspection will generate a list of items
sellers must repair.
ANS Need for inspections to be completed within the time stated in the contract.
,3. An exception to title insurance coverage is
1. forged documents.
2. defects found in public newspapers.
3. incorrect records of marital status.
4. defects that clearly appear in the title search.
ANS defects that clearly appear in the title search.
4. If a borrower can afford to make monthly principal and interest
payments of
$1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-
year loan at 4-1/2%, what is the largest loan (rounded to the nearest
$100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION
TABLE.)
1. $158,100
2. $158,300
3. $175,900
4. $176,100
ANS $176,100
5. State laws differ on whether a buyer is entitled to know about
1. a suicide that occurred in the house last year.
2. possible lead paint in the property.
,3. the flooding of the basement every spring.
4. the fact that the sellers are getting a divorce.
ANS a suicide that occurred in the house last year.
6. Three identical homes in a neighborhood were listed at the
same time in a market where demand was constant. According to
the law of supply and demand, which would have sold for the
lowest price?
1. The first sold.
2. The second sold.
3. The last sold.
4. Cannot tell from the information given
ANS The first sold.
7. A property management plan may serve different purposes
for different owners, and generally has to strike a balance
between preservation of the property's value and generation of
income. Which of the following owners would MOST likely prefer a
property manager who emphasizes maintenance of value over
profitability?
1. An individual entrepreneur who owns several apartment buildings.
2. The Department of Housing and Urban Development.
3. The investment division of a bank.
, 4. A corporate Real Estate Investment Trust.
ANS The Department of Housing and Urban Development.
8. Federal Truth-in-Lending laws are also known as
1. the Freedom of Information Act.
2. the Equal Credit Opportunity Act.
3. Regulation Z.
4. Title VIII.
ANS Regulation Z.
9. The FHA functions MOST like
1. a bank or savings and loan association.
2. a mortgage company.
3. an investment group.
4. an insurance company.
ANS an insurance company.
10. In the sale of property, there is often confusion over
whether an item is a fixture or personal property. What is the
best way to avoid this confusion?
1. Apply the legal tests of a fixture.
2. Apply local court decisions dealing with similar items.
QUESTIONS AND ANSWERS
1. A couple listed their home with a broker. After 2 months, the
seller found a buyer, and the sale closed. The seller was not
obligated to pay a commission to the broker. This listing was MOST
likely
1. an exclusive agency listing.
2. an exclusive right to sell listing.
3. a net listing.
4. an advance fee listing.
ANS an exclusive agency listing
2. What critical aspect of the property inspection process MUST
licensees convey to prospective buyers?
1. Difficulty of finding competent inspectors.
2. Appropriate fee splitting between inspectors and brokers.
3. Need for inspections to be completed within the time stated in the
contract.
4. Likelihood that the inspection will generate a list of items
sellers must repair.
ANS Need for inspections to be completed within the time stated in the contract.
,3. An exception to title insurance coverage is
1. forged documents.
2. defects found in public newspapers.
3. incorrect records of marital status.
4. defects that clearly appear in the title search.
ANS defects that clearly appear in the title search.
4. If a borrower can afford to make monthly principal and interest
payments of
$1,000 and the lender will make a 30-year loan at 5-1/2%, or a 20-
year loan at 4-1/2%, what is the largest loan (rounded to the nearest
$100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION
TABLE.)
1. $158,100
2. $158,300
3. $175,900
4. $176,100
ANS $176,100
5. State laws differ on whether a buyer is entitled to know about
1. a suicide that occurred in the house last year.
2. possible lead paint in the property.
,3. the flooding of the basement every spring.
4. the fact that the sellers are getting a divorce.
ANS a suicide that occurred in the house last year.
6. Three identical homes in a neighborhood were listed at the
same time in a market where demand was constant. According to
the law of supply and demand, which would have sold for the
lowest price?
1. The first sold.
2. The second sold.
3. The last sold.
4. Cannot tell from the information given
ANS The first sold.
7. A property management plan may serve different purposes
for different owners, and generally has to strike a balance
between preservation of the property's value and generation of
income. Which of the following owners would MOST likely prefer a
property manager who emphasizes maintenance of value over
profitability?
1. An individual entrepreneur who owns several apartment buildings.
2. The Department of Housing and Urban Development.
3. The investment division of a bank.
, 4. A corporate Real Estate Investment Trust.
ANS The Department of Housing and Urban Development.
8. Federal Truth-in-Lending laws are also known as
1. the Freedom of Information Act.
2. the Equal Credit Opportunity Act.
3. Regulation Z.
4. Title VIII.
ANS Regulation Z.
9. The FHA functions MOST like
1. a bank or savings and loan association.
2. a mortgage company.
3. an investment group.
4. an insurance company.
ANS an insurance company.
10. In the sale of property, there is often confusion over
whether an item is a fixture or personal property. What is the
best way to avoid this confusion?
1. Apply the legal tests of a fixture.
2. Apply local court decisions dealing with similar items.
