PSI Services LLC Real Estate Salesperson National Exam Study
Guide 2026–2027 | PSI National Real Estate Salesperson License
Exam Prep, Real Estate Principles & Practices, Property
Ownership, Land Use Controls, Valuation, Financing, Contracts,
Agency, Property Disclosure, Practice Questions and Answers
Question 1: The concept of "fee simple absolute" is best characterized by which
of the following?
A. An estate that lasts only for the lifetime of the owner
B. An estate that may be terminated by a condition subsequent
C. The highest and most complete form of ownership, of indefinite duration
D. An estate that automatically reverts to the grantor upon the occurrence of a
specified event
CORRECT ANSWER: C. The highest and most complete form of ownership, of
indefinite duration
Rationale: Fee simple absolute represents the maximum ownership interest
recognized by law. It is perpetual, freely transferable, and inheritable, with no
conditions or limitations attached.
Question 2: A buyer and seller have signed a purchase agreement. The buyer
later finds a different property they prefer and decides not to close. The seller is
entitled to what remedy?
A. Specific performance only
B. Liquidated damages only
C. Either specific performance or liquidated damages, depending on the contract
terms
D. No remedy because the buyer changed their mind
CORRECT ANSWER: C. Either specific performance or liquidated damages,
depending on the contract terms
Rationale: A real estate purchase contract is legally binding. Remedies for breach
may include specific performance (forcing the sale) or liquidated damages
(keeping the earnest money), as specified in the contract.
Question 3: Which of the following is NOT a protected class under the federal
Fair Housing Act?
,A. Race
B. Religion
C. Occupation
D. Familial status
CORRECT ANSWER: C. Occupation
Rationale: The federal Fair Housing Act protects race, color, religion, sex, national
origin, disability, and familial status. Occupation is not a federally protected class,
though some state or local laws may add it.
Question 4: A property is listed for $400,000. The seller agrees to pay a 6%
commission, which is split evenly between the listing and selling brokers. If the
listing salesperson receives 60% of the listing broker's share, what is the
salesperson's commission?
A. $7,200
B. $12,000
C. $6,000
D. $9,600
CORRECT ANSWER: A. $7,200
Rationale: Total commission is $400,000 × 6% = $24,000. Each broker receives
$12,000. The listing salesperson receives 60% of $12,000 = $7,200.
Question 5: Which document is used to transfer title to real property from one
party to another?
A. Promissory note
B. Deed
C. Mortgage
D. Listing agreement
CORRECT ANSWER: B. Deed
Rationale: A deed is the legal instrument that conveys title to real property. A
promissory note evidences a debt, a mortgage secures a loan, and a listing
agreement is an employment contract for brokerage services.
,Question 6: A property owner grants a neighbor the right to cross their land to
reach a public road. This right is known as what?
A. An encroachment
B. A lien
C. An easement
D. A covenant
CORRECT ANSWER: C. An easement
Rationale: An easement is a nonpossessory interest in land that gives one party
the right to use another's property for a specific purpose, such as access.
Question 7: A salesperson is representing a buyer. The buyer asks about the
property's school district. The salesperson directs the buyer only to
neighborhoods with a specific racial demographic. This practice is called what?
A. Steering
B. Blockbusting
C. Redlining
D. Puffing
CORRECT ANSWER: A. Steering
Rationale: Steering is the illegal practice of guiding buyers toward or away from
certain neighborhoods based on protected characteristics such as race, religion,
or national origin.
Question 8: Which appraisal principle states that a buyer will not pay more for a
property than the cost of acquiring an equally desirable substitute?
A. Principle of Contribution
B. Principle of Substitution
C. Principle of Regression
D. Principle of Anticipation
CORRECT ANSWER: B. Principle of Substitution
Rationale: The Principle of Substitution holds that a prudent buyer will pay no
more for a property than the cost of a comparable substitute property with equal
desirability and utility.
, Question 9: What is the primary purpose of a comparative market analysis
(CMA)?
A. To provide a legally binding appraisal
B. To help establish a listing price or offer price based on recent comparable sales
C. To calculate the property's assessed value for tax purposes
D. To determine the structural condition of the property
CORRECT ANSWER: B. To help establish a listing price or offer price based on
recent comparable sales
Rationale: A CMA is a broker's or salesperson's tool for estimating market value
using recent sales of similar properties. It is not a formal appraisal and has no
legal standing as one.
Question 10: A tenant signs a one-year lease. After the lease expires, the tenant
remains in possession and pays rent, which the landlord accepts. What type of
tenancy has been created?
A. Tenancy for years
B. Tenancy at sufferance
C. Periodic tenancy
D. Tenancy at will
CORRECT ANSWER: C. Periodic tenancy
Rationale: When a tenant remains in possession after a lease expires and the
landlord accepts rent, a periodic tenancy (such as month-to-month) is created by
operation of law.
Question 11: Which of the following is an example of involuntary alienation?
A. Selling a property to a buyer
B. Transferring property by gift
C. Losing property through foreclosure
D. Conveying property by deed
CORRECT ANSWER: C. Losing property through foreclosure
Guide 2026–2027 | PSI National Real Estate Salesperson License
Exam Prep, Real Estate Principles & Practices, Property
Ownership, Land Use Controls, Valuation, Financing, Contracts,
Agency, Property Disclosure, Practice Questions and Answers
Question 1: The concept of "fee simple absolute" is best characterized by which
of the following?
A. An estate that lasts only for the lifetime of the owner
B. An estate that may be terminated by a condition subsequent
C. The highest and most complete form of ownership, of indefinite duration
D. An estate that automatically reverts to the grantor upon the occurrence of a
specified event
CORRECT ANSWER: C. The highest and most complete form of ownership, of
indefinite duration
Rationale: Fee simple absolute represents the maximum ownership interest
recognized by law. It is perpetual, freely transferable, and inheritable, with no
conditions or limitations attached.
Question 2: A buyer and seller have signed a purchase agreement. The buyer
later finds a different property they prefer and decides not to close. The seller is
entitled to what remedy?
A. Specific performance only
B. Liquidated damages only
C. Either specific performance or liquidated damages, depending on the contract
terms
D. No remedy because the buyer changed their mind
CORRECT ANSWER: C. Either specific performance or liquidated damages,
depending on the contract terms
Rationale: A real estate purchase contract is legally binding. Remedies for breach
may include specific performance (forcing the sale) or liquidated damages
(keeping the earnest money), as specified in the contract.
Question 3: Which of the following is NOT a protected class under the federal
Fair Housing Act?
,A. Race
B. Religion
C. Occupation
D. Familial status
CORRECT ANSWER: C. Occupation
Rationale: The federal Fair Housing Act protects race, color, religion, sex, national
origin, disability, and familial status. Occupation is not a federally protected class,
though some state or local laws may add it.
Question 4: A property is listed for $400,000. The seller agrees to pay a 6%
commission, which is split evenly between the listing and selling brokers. If the
listing salesperson receives 60% of the listing broker's share, what is the
salesperson's commission?
A. $7,200
B. $12,000
C. $6,000
D. $9,600
CORRECT ANSWER: A. $7,200
Rationale: Total commission is $400,000 × 6% = $24,000. Each broker receives
$12,000. The listing salesperson receives 60% of $12,000 = $7,200.
Question 5: Which document is used to transfer title to real property from one
party to another?
A. Promissory note
B. Deed
C. Mortgage
D. Listing agreement
CORRECT ANSWER: B. Deed
Rationale: A deed is the legal instrument that conveys title to real property. A
promissory note evidences a debt, a mortgage secures a loan, and a listing
agreement is an employment contract for brokerage services.
,Question 6: A property owner grants a neighbor the right to cross their land to
reach a public road. This right is known as what?
A. An encroachment
B. A lien
C. An easement
D. A covenant
CORRECT ANSWER: C. An easement
Rationale: An easement is a nonpossessory interest in land that gives one party
the right to use another's property for a specific purpose, such as access.
Question 7: A salesperson is representing a buyer. The buyer asks about the
property's school district. The salesperson directs the buyer only to
neighborhoods with a specific racial demographic. This practice is called what?
A. Steering
B. Blockbusting
C. Redlining
D. Puffing
CORRECT ANSWER: A. Steering
Rationale: Steering is the illegal practice of guiding buyers toward or away from
certain neighborhoods based on protected characteristics such as race, religion,
or national origin.
Question 8: Which appraisal principle states that a buyer will not pay more for a
property than the cost of acquiring an equally desirable substitute?
A. Principle of Contribution
B. Principle of Substitution
C. Principle of Regression
D. Principle of Anticipation
CORRECT ANSWER: B. Principle of Substitution
Rationale: The Principle of Substitution holds that a prudent buyer will pay no
more for a property than the cost of a comparable substitute property with equal
desirability and utility.
, Question 9: What is the primary purpose of a comparative market analysis
(CMA)?
A. To provide a legally binding appraisal
B. To help establish a listing price or offer price based on recent comparable sales
C. To calculate the property's assessed value for tax purposes
D. To determine the structural condition of the property
CORRECT ANSWER: B. To help establish a listing price or offer price based on
recent comparable sales
Rationale: A CMA is a broker's or salesperson's tool for estimating market value
using recent sales of similar properties. It is not a formal appraisal and has no
legal standing as one.
Question 10: A tenant signs a one-year lease. After the lease expires, the tenant
remains in possession and pays rent, which the landlord accepts. What type of
tenancy has been created?
A. Tenancy for years
B. Tenancy at sufferance
C. Periodic tenancy
D. Tenancy at will
CORRECT ANSWER: C. Periodic tenancy
Rationale: When a tenant remains in possession after a lease expires and the
landlord accepts rent, a periodic tenancy (such as month-to-month) is created by
operation of law.
Question 11: Which of the following is an example of involuntary alienation?
A. Selling a property to a buyer
B. Transferring property by gift
C. Losing property through foreclosure
D. Conveying property by deed
CORRECT ANSWER: C. Losing property through foreclosure
