PSI REAL ESTATE ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS
COMPLETE STUDY GUIDE
●● Which rule-of-thumb formula for estimating property value is being
offered to an investor who is told that a house renting for $900 a month
should sell for about $90,000?
1. CMA
2. IRV
3. NOI
4. GRM
Answer: 4
●● Earnest money should be deposited into a trust account
1. in a timely manner, according to state laws.
2. upon removal of all contingencies.
3. at the broker's discretion.
4. according to MLS rules.
Answer: 1
●● An agency relationship between a property owner and a property
manager is usually created by
,1. a management agreement.
2. payment of a management fee.
3. an exclusive agency agreement.
4. an independent contractor agreement.
Answer: 1
●● To what party or parties does the broker owe the fiduciary duty of
care?
1. the seller
2. both the buyer and the seller
3. the party or parties employing the broker
4. the party or parties paying the commission
Answer: 3
●● A judgment has been properly recorded. Any subsequent purchasers,
whether they have actually examined the record or not, have been given
1. actual notice.
2. prescriptive notice.
3. constructive notice.
4. exculpatory notice.
Answer: 3
,●● A major difference between freehold and nonfreehold estates is that
all freehold estates
1. are of indeterminable duration.
2. terminate upon the death of the person on whose life they are based.
3. are inheritable by the holder's heirs.
4. are estates for a fixed term.
Answer: 1
●● A competitive market analysis is MOST often used for
1. estate tax purposes.
2. setting a listing price.
3. divorce proceedings.
4. property tax assessment.
Answer: 2
●● A seller's statement in a property disclosure document means
1. the owner is disclosing known latent defects.
2. nothing, because the seller will not be responsible for any defects.
3. the property is fully suitable for the uses contemplated by the buyer.
4. the owner creates a warranty that there are no defects in the property.
Answer: 1
, ●● To be valid, every deed must
1. contain a warranty.
2. include granting language.
3. be executed by the grantor.
4. be signed by the grantee if there are covenants.
Answer: 3
●● Without checking the facts, a broker who is the seller's agent tells a
buyer that the property taxes in a particular neighborhood are among the
lowest in the area. The buyer relies on the broker's statement and makes
an offer on a house in the neighborhood. Before closing, it is determined
that the taxes are actually among the highest in the area. The buyer could
seek to rescind the contract on the basis of
1. puffing.
2. misrepresentation.
3. lack of care and diligence.
4. nothing; property taxes are a matter of public record and it was the
buyer's responsibility to check them.
Answer: 2
●● Which of these Federal laws regulates the advertisement of a lender's
credit terms (rates, payment, etc.)?
1. Real Estate Settlement Procedures Act.
2. ECOA.
QUESTIONS AND CORRECT ANSWERS
COMPLETE STUDY GUIDE
●● Which rule-of-thumb formula for estimating property value is being
offered to an investor who is told that a house renting for $900 a month
should sell for about $90,000?
1. CMA
2. IRV
3. NOI
4. GRM
Answer: 4
●● Earnest money should be deposited into a trust account
1. in a timely manner, according to state laws.
2. upon removal of all contingencies.
3. at the broker's discretion.
4. according to MLS rules.
Answer: 1
●● An agency relationship between a property owner and a property
manager is usually created by
,1. a management agreement.
2. payment of a management fee.
3. an exclusive agency agreement.
4. an independent contractor agreement.
Answer: 1
●● To what party or parties does the broker owe the fiduciary duty of
care?
1. the seller
2. both the buyer and the seller
3. the party or parties employing the broker
4. the party or parties paying the commission
Answer: 3
●● A judgment has been properly recorded. Any subsequent purchasers,
whether they have actually examined the record or not, have been given
1. actual notice.
2. prescriptive notice.
3. constructive notice.
4. exculpatory notice.
Answer: 3
,●● A major difference between freehold and nonfreehold estates is that
all freehold estates
1. are of indeterminable duration.
2. terminate upon the death of the person on whose life they are based.
3. are inheritable by the holder's heirs.
4. are estates for a fixed term.
Answer: 1
●● A competitive market analysis is MOST often used for
1. estate tax purposes.
2. setting a listing price.
3. divorce proceedings.
4. property tax assessment.
Answer: 2
●● A seller's statement in a property disclosure document means
1. the owner is disclosing known latent defects.
2. nothing, because the seller will not be responsible for any defects.
3. the property is fully suitable for the uses contemplated by the buyer.
4. the owner creates a warranty that there are no defects in the property.
Answer: 1
, ●● To be valid, every deed must
1. contain a warranty.
2. include granting language.
3. be executed by the grantor.
4. be signed by the grantee if there are covenants.
Answer: 3
●● Without checking the facts, a broker who is the seller's agent tells a
buyer that the property taxes in a particular neighborhood are among the
lowest in the area. The buyer relies on the broker's statement and makes
an offer on a house in the neighborhood. Before closing, it is determined
that the taxes are actually among the highest in the area. The buyer could
seek to rescind the contract on the basis of
1. puffing.
2. misrepresentation.
3. lack of care and diligence.
4. nothing; property taxes are a matter of public record and it was the
buyer's responsibility to check them.
Answer: 2
●● Which of these Federal laws regulates the advertisement of a lender's
credit terms (rates, payment, etc.)?
1. Real Estate Settlement Procedures Act.
2. ECOA.
