PSI Services LLC Real Estate Salesperson —
National 2026/2027 | PSI National Real Estate
Salesperson Exam Study Guide & Practice Questions
| PSI Real Estate Salesperson National Exam Prep,
Property Ownership, Land Use Controls, Valuation,
Financing, Contracts, Agency, Transfer of Title,
Property Management, Real Estate Practice,
Federal Fair Housing, Real Estate Calculations &
Detailed Rationales
Question 1: A property owner divides a parcel into two lots and
sells one to a buyer. The deed includes a clause prohibiting the
construction of a fence above four feet in height. This restriction is
an example of which type of encumbrance?
A. A lien
B. A restrictive covenant
C. An easement by prescription
D. A license
CORRECT ANSWER: B. A restrictive covenant
Rationale: A restrictive covenant is a private limitation on land use, often
imposed by a deed or subdivision plat, that restricts the manner in which
the property may be used. A lien is a monetary claim against property, an
easement by prescription is acquired through continuous use, and a license
is a revocable permission to enter land.
Question 2: A salesperson is holding an open house for a seller-
client. A neighbor stops by and asks what the property is listed for.
The salesperson may disclose the listing price because it is
A. protected by antitrust law
B. considered confidential client information
C. publicly advertised information
D. a violation of fiduciary duty
CORRECT ANSWER: C. publicly advertised information
Rationale: Listing prices are actively marketed to the public through
advertising and MLS systems, so they are not confidential. Fiduciary duties
require protecting the client's negotiating position, not hiding publicly
available facts.
,Question 3: A buyer and seller enter into a contract in which the
buyer agrees to purchase the property only if the seller can deliver
clear title by a specified date. This is an example of
A. a condition precedent
B. a liquidated damages clause
C. an executory clause
D. a covenant of seisin
CORRECT ANSWER: A. a condition precedent
Rationale: A condition precedent is an event that must occur before a
contract becomes enforceable. In this case, the contract is contingent on
the seller delivering clear title. A liquidated damages clause specifies a
preset monetary remedy, an executory clause is not a standard contract
term, and a covenant of seisin is a warranty in a deed.
Question 4: A licensed salesperson wants to advertise a property
she owns personally. Under general real estate advertising
regulations, she must
A. avoid using her own name in the advertisement
B. disclose her licensee status in the advertisement
C. obtain broker approval before advertising
D. use only the broker's name in the advertisement
CORRECT ANSWER: B. disclose her licensee status in the
advertisement
Rationale: When a licensee sells or advertises their own property, most
jurisdictions require disclosure of the licensee status to prevent consumers
from mistakenly believing they are dealing with an unlicensed seller. This
disclosure ensures transparency and consumer protection.
Question 5: A property manager is reviewing a commercial lease
that requires the tenant to pay a base rent plus a percentage of the
tenant's gross sales above a stated threshold. This lease is best
classified as
A. a gross lease
B. a net lease
C. a percentage lease
D. a graduated lease
,CORRECT ANSWER: C. a percentage lease
Rationale: A percentage lease typically involves a base rent plus an
additional amount calculated as a percentage of the tenant's business
revenue, commonly used in retail spaces. A gross lease involves fixed rent
with the landlord paying expenses, a net lease shifts expenses to the tenant,
and a graduated lease increases rent on a predetermined schedule.
Question 6: A buyer submits an offer on a property and the seller
responds with a counteroffer that raises the purchase price by
$10,000. Before the buyer responds, the seller
A. is bound to the original offer terms
B. may revoke the counteroffer at any time prior to acceptance
C. must hold the counteroffer open for a reasonable time
D. cannot accept a better offer from another buyer
CORRECT ANSWER: B. may revoke the counteroffer at any time
prior to acceptance
Rationale: A counteroffer is a new offer that terminates the original offer.
The party making the counteroffer retains the right to revoke it at any time
before it is accepted by the other party. There is no requirement to hold it
open unless an option contract or consideration exists.
Question 7: A broker is reviewing the closing statement for a
transaction. The buyer is credited for property taxes paid in
advance by the seller. This adjustment is necessary because
A. the buyer owns the property for a portion of the tax year
B. the seller is responsible for all taxes in the year of sale
C. tax prorations are prohibited by federal law
D. the lender requires reimbursement of escrow funds
CORRECT ANSWER: A. the buyer owns the property for a portion
of the tax year
Rationale: Property taxes are prorated at closing so that the seller, who paid
taxes covering a period extending beyond the closing date, receives a credit
for the portion of the tax year during which the buyer will own the property.
This prevents either party from paying more than their fair share.
Question 8: A real estate licensee is working with a buyer who
wants to purchase a home in a neighborhood with restrictive
, covenants that prohibit home-based businesses. The buyer intends
to operate a consulting business from the property. The licensee
should
A. assure the buyer that the restriction is unenforceable
B. advise the buyer to seek legal counsel regarding the covenant
C. ignore the covenant because it is a private restriction
D. tell the buyer to apply for a zoning variance
CORRECT ANSWER: B. advise the buyer to seek legal counsel
regarding the covenant
Rationale: Restrictive covenants are private land use controls that may be
enforceable by other property owners. A licensee should not provide legal
advice but should direct the buyer to an attorney to assess the covenant's
applicability and potential remedies.
Question 9: A property is sold with a deed that contains a clause
stating the grantor conveys the property "to the grantee and the
grantee's heirs and assigns forever." This language creates
A. a life estate
B. a fee simple absolute estate
C. a fee simple determinable
D. a leasehold estate
CORRECT ANSWER: B. a fee simple absolute estate
Rationale: The phrase "and heirs and assigns forever" is traditional language
used to convey a fee simple absolute estate, the highest and most complete
form of ownership. A life estate is limited to the lifetime of a person, a fee
simple determinable ends automatically upon a specified event, and a
leasehold estate is a tenant's right of possession.
Question 10: A salesperson is preparing a comparative market
analysis (CMA) for a seller. The salesperson must inform the seller
that a CMA
A. is the same as an appraisal
B. is not an appraisal and may not be used as one
C. must be performed by a certified appraiser
D. has no legal restrictions on its use
National 2026/2027 | PSI National Real Estate
Salesperson Exam Study Guide & Practice Questions
| PSI Real Estate Salesperson National Exam Prep,
Property Ownership, Land Use Controls, Valuation,
Financing, Contracts, Agency, Transfer of Title,
Property Management, Real Estate Practice,
Federal Fair Housing, Real Estate Calculations &
Detailed Rationales
Question 1: A property owner divides a parcel into two lots and
sells one to a buyer. The deed includes a clause prohibiting the
construction of a fence above four feet in height. This restriction is
an example of which type of encumbrance?
A. A lien
B. A restrictive covenant
C. An easement by prescription
D. A license
CORRECT ANSWER: B. A restrictive covenant
Rationale: A restrictive covenant is a private limitation on land use, often
imposed by a deed or subdivision plat, that restricts the manner in which
the property may be used. A lien is a monetary claim against property, an
easement by prescription is acquired through continuous use, and a license
is a revocable permission to enter land.
Question 2: A salesperson is holding an open house for a seller-
client. A neighbor stops by and asks what the property is listed for.
The salesperson may disclose the listing price because it is
A. protected by antitrust law
B. considered confidential client information
C. publicly advertised information
D. a violation of fiduciary duty
CORRECT ANSWER: C. publicly advertised information
Rationale: Listing prices are actively marketed to the public through
advertising and MLS systems, so they are not confidential. Fiduciary duties
require protecting the client's negotiating position, not hiding publicly
available facts.
,Question 3: A buyer and seller enter into a contract in which the
buyer agrees to purchase the property only if the seller can deliver
clear title by a specified date. This is an example of
A. a condition precedent
B. a liquidated damages clause
C. an executory clause
D. a covenant of seisin
CORRECT ANSWER: A. a condition precedent
Rationale: A condition precedent is an event that must occur before a
contract becomes enforceable. In this case, the contract is contingent on
the seller delivering clear title. A liquidated damages clause specifies a
preset monetary remedy, an executory clause is not a standard contract
term, and a covenant of seisin is a warranty in a deed.
Question 4: A licensed salesperson wants to advertise a property
she owns personally. Under general real estate advertising
regulations, she must
A. avoid using her own name in the advertisement
B. disclose her licensee status in the advertisement
C. obtain broker approval before advertising
D. use only the broker's name in the advertisement
CORRECT ANSWER: B. disclose her licensee status in the
advertisement
Rationale: When a licensee sells or advertises their own property, most
jurisdictions require disclosure of the licensee status to prevent consumers
from mistakenly believing they are dealing with an unlicensed seller. This
disclosure ensures transparency and consumer protection.
Question 5: A property manager is reviewing a commercial lease
that requires the tenant to pay a base rent plus a percentage of the
tenant's gross sales above a stated threshold. This lease is best
classified as
A. a gross lease
B. a net lease
C. a percentage lease
D. a graduated lease
,CORRECT ANSWER: C. a percentage lease
Rationale: A percentage lease typically involves a base rent plus an
additional amount calculated as a percentage of the tenant's business
revenue, commonly used in retail spaces. A gross lease involves fixed rent
with the landlord paying expenses, a net lease shifts expenses to the tenant,
and a graduated lease increases rent on a predetermined schedule.
Question 6: A buyer submits an offer on a property and the seller
responds with a counteroffer that raises the purchase price by
$10,000. Before the buyer responds, the seller
A. is bound to the original offer terms
B. may revoke the counteroffer at any time prior to acceptance
C. must hold the counteroffer open for a reasonable time
D. cannot accept a better offer from another buyer
CORRECT ANSWER: B. may revoke the counteroffer at any time
prior to acceptance
Rationale: A counteroffer is a new offer that terminates the original offer.
The party making the counteroffer retains the right to revoke it at any time
before it is accepted by the other party. There is no requirement to hold it
open unless an option contract or consideration exists.
Question 7: A broker is reviewing the closing statement for a
transaction. The buyer is credited for property taxes paid in
advance by the seller. This adjustment is necessary because
A. the buyer owns the property for a portion of the tax year
B. the seller is responsible for all taxes in the year of sale
C. tax prorations are prohibited by federal law
D. the lender requires reimbursement of escrow funds
CORRECT ANSWER: A. the buyer owns the property for a portion
of the tax year
Rationale: Property taxes are prorated at closing so that the seller, who paid
taxes covering a period extending beyond the closing date, receives a credit
for the portion of the tax year during which the buyer will own the property.
This prevents either party from paying more than their fair share.
Question 8: A real estate licensee is working with a buyer who
wants to purchase a home in a neighborhood with restrictive
, covenants that prohibit home-based businesses. The buyer intends
to operate a consulting business from the property. The licensee
should
A. assure the buyer that the restriction is unenforceable
B. advise the buyer to seek legal counsel regarding the covenant
C. ignore the covenant because it is a private restriction
D. tell the buyer to apply for a zoning variance
CORRECT ANSWER: B. advise the buyer to seek legal counsel
regarding the covenant
Rationale: Restrictive covenants are private land use controls that may be
enforceable by other property owners. A licensee should not provide legal
advice but should direct the buyer to an attorney to assess the covenant's
applicability and potential remedies.
Question 9: A property is sold with a deed that contains a clause
stating the grantor conveys the property "to the grantee and the
grantee's heirs and assigns forever." This language creates
A. a life estate
B. a fee simple absolute estate
C. a fee simple determinable
D. a leasehold estate
CORRECT ANSWER: B. a fee simple absolute estate
Rationale: The phrase "and heirs and assigns forever" is traditional language
used to convey a fee simple absolute estate, the highest and most complete
form of ownership. A life estate is limited to the lifetime of a person, a fee
simple determinable ends automatically upon a specified event, and a
leasehold estate is a tenant's right of possession.
Question 10: A salesperson is preparing a comparative market
analysis (CMA) for a seller. The salesperson must inform the seller
that a CMA
A. is the same as an appraisal
B. is not an appraisal and may not be used as one
C. must be performed by a certified appraiser
D. has no legal restrictions on its use
