PSI Services LLC Real Estate Salesperson —
National 2026/2027 | Real Estate Salesperson
National Exam Study Guide & Practice Questions |
PSI Real Estate Exam Prep, Property Ownership,
Contracts, Agency, Financing, Valuation, Real
Estate Math & License Exam Review
Question 1: Which of the following is considered real property rather than
personal property?
A. A portable space heater
B. A built-in dishwasher
C. A freestanding bookcase
D. A tenant's area rug
CORRECT ANSWER: B. A built-in dishwasher
Rationale: Real property includes land and items permanently attached to it, known as
fixtures. A built-in dishwasher is permanently installed and essential to the property's
function, making it a fixture. Portable items like space heaters, freestanding bookcases,
and area rugs are personal property (chattel) because they can be removed without
damaging the real estate.
Question 2: A property owner dies without a valid will. What is the legal
process by which the estate is settled called?
A. Escheat
B. Probate
C. Eminent domain
D. Adverse possession
CORRECT ANSWER: B. Probate
Rationale: Dying without a will is called dying intestate. Probate is the court-supervised
process that validates the estate, pays debts, and distributes remaining assets according
to state intestacy laws. Escheat occurs when no heirs exist and property reverts to the
state, while eminent domain is government taking and adverse possession is acquiring
title through occupancy.
Question 3: Which type of easement is created when a property owner sells a
parcel of land but retains no access to a public road except across the sold
parcel?
A. Easement by prescription
B. Easement by necessity
C. Easement appurtenant
D. Easement in gross
CORRECT ANSWER: B. Easement by necessity
,Rationale: An easement by necessity arises by operation of law when a landlocked
parcel is created through a division of land, and access across another parcel is strictly
necessary. Easement by prescription requires open, notorious, and hostile use for a
statutory period. Easement appurtenant benefits a dominant tenement, and easement in
gross benefits a person or entity, not a parcel.
Question 4: In a metes and bounds legal description, what is the "point of
beginning"?
A. The center of the property
B. A monument or reference point marking where the description starts and ends
C. The nearest public road
D. The highest elevation on the property
CORRECT ANSWER: B. A monument or reference point marking where the
description starts and ends
Rationale: Metes and bounds descriptions trace boundary lines using compass
directions and distances from a defined starting point called the point of beginning. The
description must return to this point to close the parcel. It is not necessarily the center,
the road, or the high point of the property.
Question 5: Which government power allows a municipality to regulate the use
of private property without compensation?
A. Eminent domain
B. Taxation
C. Police power
D. Escheat
CORRECT ANSWER: C. Police power
Rationale: Police power is the constitutional authority of state and local governments to
enact regulations for the health, safety, and welfare of the public. Zoning and building
codes are exercises of police power and do not require compensation. Eminent domain
requires just compensation, taxation generates revenue, and escheat is reversion of
property to the state.
Question 6: A buyer purchases a property and receives a general warranty
deed. What title covenant guarantees the grantor will defend against all lawful
claims?
A. Covenant of seisin
B. Covenant of quiet enjoyment
C. Covenant against encumbrances
D. Covenant of further assurances
CORRECT ANSWER: B. Covenant of quiet enjoyment
,Rationale: The covenant of quiet enjoyment is a present and future covenant that
guarantees the grantee will not be disturbed in possession by a lawful claimant with
superior title. The covenant of seisin guarantees the grantor owns the estate. The
covenant against encumbrances guarantees no undisclosed liens. The covenant of
further assurances promises to execute documents to perfect title.
Question 7: Which of the following describes a lien that attaches to all real and
personal property of a debtor?
A. Specific lien
B. General lien
C. Mechanic's lien
D. Mortgage lien
CORRECT ANSWER: B. General lien
Rationale: A general lien attaches to all property of a debtor, both real and personal, and
is typically the result of a court judgment. A specific lien attaches only to identified
property, such as a mortgage lien or mechanic's lien on a particular parcel. General liens
include judgment liens and tax liens.
Question 8: What type of listing agreement gives the broker the exclusive right
to sell but also allows the owner to sell the property without owing a
commission only if the owner procures the buyer independently?
A. Open listing
B. Exclusive agency listing
C. Exclusive right to sell listing
D. Net listing
CORRECT ANSWER: B. Exclusive agency listing
Rationale: Under an exclusive agency listing, the owner retains the right to sell the
property without paying a commission if the owner personally finds the buyer. The
broker is entitled to a commission if any other party, including another broker, produces
a ready, willing, and able buyer. Under an exclusive right to sell, the broker is owed a
commission regardless of who finds the buyer. Under an open listing, multiple brokers
can compete, and only the procuring cause is compensated.
Question 9: A buyer and seller enter into a contract for the sale of real estate.
The buyer fails to close on the agreed date. Which remedy allows the seller to
keep the buyer's earnest money deposit?
A. Specific performance
B. Liquidated damages
C. Novation
D. Rescission
CORRECT ANSWER: B. Liquidated damages
, Rationale: Liquidated damages are a predetermined sum, such as the earnest money
deposit, agreed upon in the contract to compensate the nonbreaching party for damages
if the other party breaches. Specific performance compels the breaching party to
complete the transfer. Novation substitutes a new contract for the old. Rescission
cancels the contract and restores the parties to their original positions.
Question 10: Which of the following is required for a valid real estate sales
contract?
A. Two witnesses
B. Acknowledgment before a notary
C. Offer, acceptance, consideration, and legal capacity
D. Recording with the county clerk
CORRECT ANSWER: C. Offer, acceptance, consideration, and legal capacity
Rationale: The essential elements of a valid real estate contract are offer and acceptance
(mutual assent), consideration, legal capacity of the parties, and a lawful purpose.
Additionally, the Statute of Frauds requires real estate contracts to be in writing and
signed by the party to be charged. Witnesses, notarization, and recording are not
required for validity, although notarization is required for recording deeds.
Question 11: Which type of agency relationship exists when a broker
represents both the buyer and seller in the same transaction without the
knowledge and consent of both parties?
A. Dual agency
B. Subagency
C. Undisclosed dual agency
D. Designated agency
CORRECT ANSWER: C. Undisclosed dual agency
Rationale: Undisclosed dual agency occurs when an agent represents both parties
without informing and obtaining consent from both. This is illegal and a breach of
fiduciary duty. Dual agency is legal only with informed written consent. Designated
agency allows different agents within the same brokerage to represent different parties
with consent. Subagency involves one broker appointing another to assist with a client.
Question 12: A licensee who represents a seller owes the duty of
confidentiality. Which of the following statements about this duty is correct?
A. The duty of confidentiality is owed to all parties in the transaction.
B. The duty of confidentiality ends when the listing agreement expires.
C. The duty of confidentiality applies only to material facts about the property.
D. The duty of confidentiality prohibits disclosing the seller's motivation to sell.
CORRECT ANSWER: D. The duty of confidentiality prohibits disclosing the
seller's motivation to sell.
National 2026/2027 | Real Estate Salesperson
National Exam Study Guide & Practice Questions |
PSI Real Estate Exam Prep, Property Ownership,
Contracts, Agency, Financing, Valuation, Real
Estate Math & License Exam Review
Question 1: Which of the following is considered real property rather than
personal property?
A. A portable space heater
B. A built-in dishwasher
C. A freestanding bookcase
D. A tenant's area rug
CORRECT ANSWER: B. A built-in dishwasher
Rationale: Real property includes land and items permanently attached to it, known as
fixtures. A built-in dishwasher is permanently installed and essential to the property's
function, making it a fixture. Portable items like space heaters, freestanding bookcases,
and area rugs are personal property (chattel) because they can be removed without
damaging the real estate.
Question 2: A property owner dies without a valid will. What is the legal
process by which the estate is settled called?
A. Escheat
B. Probate
C. Eminent domain
D. Adverse possession
CORRECT ANSWER: B. Probate
Rationale: Dying without a will is called dying intestate. Probate is the court-supervised
process that validates the estate, pays debts, and distributes remaining assets according
to state intestacy laws. Escheat occurs when no heirs exist and property reverts to the
state, while eminent domain is government taking and adverse possession is acquiring
title through occupancy.
Question 3: Which type of easement is created when a property owner sells a
parcel of land but retains no access to a public road except across the sold
parcel?
A. Easement by prescription
B. Easement by necessity
C. Easement appurtenant
D. Easement in gross
CORRECT ANSWER: B. Easement by necessity
,Rationale: An easement by necessity arises by operation of law when a landlocked
parcel is created through a division of land, and access across another parcel is strictly
necessary. Easement by prescription requires open, notorious, and hostile use for a
statutory period. Easement appurtenant benefits a dominant tenement, and easement in
gross benefits a person or entity, not a parcel.
Question 4: In a metes and bounds legal description, what is the "point of
beginning"?
A. The center of the property
B. A monument or reference point marking where the description starts and ends
C. The nearest public road
D. The highest elevation on the property
CORRECT ANSWER: B. A monument or reference point marking where the
description starts and ends
Rationale: Metes and bounds descriptions trace boundary lines using compass
directions and distances from a defined starting point called the point of beginning. The
description must return to this point to close the parcel. It is not necessarily the center,
the road, or the high point of the property.
Question 5: Which government power allows a municipality to regulate the use
of private property without compensation?
A. Eminent domain
B. Taxation
C. Police power
D. Escheat
CORRECT ANSWER: C. Police power
Rationale: Police power is the constitutional authority of state and local governments to
enact regulations for the health, safety, and welfare of the public. Zoning and building
codes are exercises of police power and do not require compensation. Eminent domain
requires just compensation, taxation generates revenue, and escheat is reversion of
property to the state.
Question 6: A buyer purchases a property and receives a general warranty
deed. What title covenant guarantees the grantor will defend against all lawful
claims?
A. Covenant of seisin
B. Covenant of quiet enjoyment
C. Covenant against encumbrances
D. Covenant of further assurances
CORRECT ANSWER: B. Covenant of quiet enjoyment
,Rationale: The covenant of quiet enjoyment is a present and future covenant that
guarantees the grantee will not be disturbed in possession by a lawful claimant with
superior title. The covenant of seisin guarantees the grantor owns the estate. The
covenant against encumbrances guarantees no undisclosed liens. The covenant of
further assurances promises to execute documents to perfect title.
Question 7: Which of the following describes a lien that attaches to all real and
personal property of a debtor?
A. Specific lien
B. General lien
C. Mechanic's lien
D. Mortgage lien
CORRECT ANSWER: B. General lien
Rationale: A general lien attaches to all property of a debtor, both real and personal, and
is typically the result of a court judgment. A specific lien attaches only to identified
property, such as a mortgage lien or mechanic's lien on a particular parcel. General liens
include judgment liens and tax liens.
Question 8: What type of listing agreement gives the broker the exclusive right
to sell but also allows the owner to sell the property without owing a
commission only if the owner procures the buyer independently?
A. Open listing
B. Exclusive agency listing
C. Exclusive right to sell listing
D. Net listing
CORRECT ANSWER: B. Exclusive agency listing
Rationale: Under an exclusive agency listing, the owner retains the right to sell the
property without paying a commission if the owner personally finds the buyer. The
broker is entitled to a commission if any other party, including another broker, produces
a ready, willing, and able buyer. Under an exclusive right to sell, the broker is owed a
commission regardless of who finds the buyer. Under an open listing, multiple brokers
can compete, and only the procuring cause is compensated.
Question 9: A buyer and seller enter into a contract for the sale of real estate.
The buyer fails to close on the agreed date. Which remedy allows the seller to
keep the buyer's earnest money deposit?
A. Specific performance
B. Liquidated damages
C. Novation
D. Rescission
CORRECT ANSWER: B. Liquidated damages
, Rationale: Liquidated damages are a predetermined sum, such as the earnest money
deposit, agreed upon in the contract to compensate the nonbreaching party for damages
if the other party breaches. Specific performance compels the breaching party to
complete the transfer. Novation substitutes a new contract for the old. Rescission
cancels the contract and restores the parties to their original positions.
Question 10: Which of the following is required for a valid real estate sales
contract?
A. Two witnesses
B. Acknowledgment before a notary
C. Offer, acceptance, consideration, and legal capacity
D. Recording with the county clerk
CORRECT ANSWER: C. Offer, acceptance, consideration, and legal capacity
Rationale: The essential elements of a valid real estate contract are offer and acceptance
(mutual assent), consideration, legal capacity of the parties, and a lawful purpose.
Additionally, the Statute of Frauds requires real estate contracts to be in writing and
signed by the party to be charged. Witnesses, notarization, and recording are not
required for validity, although notarization is required for recording deeds.
Question 11: Which type of agency relationship exists when a broker
represents both the buyer and seller in the same transaction without the
knowledge and consent of both parties?
A. Dual agency
B. Subagency
C. Undisclosed dual agency
D. Designated agency
CORRECT ANSWER: C. Undisclosed dual agency
Rationale: Undisclosed dual agency occurs when an agent represents both parties
without informing and obtaining consent from both. This is illegal and a breach of
fiduciary duty. Dual agency is legal only with informed written consent. Designated
agency allows different agents within the same brokerage to represent different parties
with consent. Subagency involves one broker appointing another to assist with a client.
Question 12: A licensee who represents a seller owes the duty of
confidentiality. Which of the following statements about this duty is correct?
A. The duty of confidentiality is owed to all parties in the transaction.
B. The duty of confidentiality ends when the listing agreement expires.
C. The duty of confidentiality applies only to material facts about the property.
D. The duty of confidentiality prohibits disclosing the seller's motivation to sell.
CORRECT ANSWER: D. The duty of confidentiality prohibits disclosing the
seller's motivation to sell.
