PSI National Real Estate
UPDATED ACTUAL Exam Questions and CORRECT Answers
Question 1.
The Civil Rights Act of 1866 prohibits any type of discrimination based on:
1. gender.
2. race.
3. race and gender.
4. religion.
Correct Answer: 2
Question 2.
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.
Correct Answer: 4
Question 3.
A couple owns an older home in a neighborhood that is becoming a commercial area.
Because of the change in the use of the land, the couple can expect the value of their
parcel to increase at some future time. This is an example of the principle of:
1. substitution.
2. contribution.
3. conformity.
4. anticipation.
Correct Answer: 4
Question 4.
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.
Correct Answer: 1
Question 5.
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.
Correct Answer: 1
Question 6.
Which of the following real estate contracts is a service contract?
1. a purchase agreement
2. a listing agreement
3. an option contract
4. a mortgage
Correct Answer: 2 A realty firm has just entered into an agreement to
represent a home builder in the sale of a new subdivision. The firm has
located several potential buyers and five homes have been sold to purchasers
that the firm's agents have contacted. The realty firm has an agency
relationship with:
1. the builder.
2. the buyers.
3. the builder and the buyers.
4. neither the builder nor the buyers. -✓✓1
Question 7.
When a home is purchased using an ARM, the monthly loan payment on the mortgage
will:
1. rise slightly in each adjustment period until the cap is reached.
2. be adjusted automatically to ensure that negative amortization does not occur.
3. be based on a very low interest rate to begin with, but will rise to the market rate at
the first adjustment.
4. vary over the life of the loan depending on fluctuations in the interest rate to which
the loan is referenced.
Correct Answer: 4
Question 8.
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is
called:
1. an agency.
2. an assessment.
3. a contract.
4. a fiduciary obligation.
Correct Answer: 3
, Question 9.
A prospective buyer made an offer to purchase a property. The owner responded with a
counteroffer. While the buyer was reviewing the counteroffer, the owner received a
better offer. The owner can accept the second offer if:
1. it satisfies or exceeds all terms included in the counteroffer.
2. the owner withdraws the counteroffer before it is accepted.
3. the owner gives the first buyer notice that another offer was received and an
opportunity to revise the bid.
4. the first buyer is informed, in writing, of the owner's intent to accept another offer.
Correct Answer: 2
Question 10.
Real property can be converted to personal property by
1. annexation.
2. severance.
3. accession.
4. extension.
Correct Answer: 2
Question 11.
A broker has signed a listing contract for the sale of a home. Which of the following
could make this contract voidable?
1. The seller cannot write and sign with an "X".
2. The listing contract specifies that no other broker may show the house.
3. The seller is heavily under the influence of alcohol at the time of signing.
4. The listing contract specifies that a commission will be paid only if the house is sold
within 3 weeks.
Correct Answer: 3
Question 12.
A broker and the buyers he represents are anxiously awaiting the closing on their new
home. The closing is scheduled in 4 days. The buyers inform the broker that they just
received revised Loan Estimate and Closing Disclosure forms from the lender, indicating
the Annual Percentage Rate on their loan has increased by 0.3%. Based on the
TILA-RESPA Integrated Disclosure rule, what action should the broker take in this
situation?
1. Assist the buyers in calculating the new loan payments and ask them if they want to
proceed with the closing as scheduled.
2. Advise the buyers to file a legal action against the lender for violation of predatory
lending practices under the Real Estate Settlement Procedures Act.
3. Call the lender and inform them that they are in violation of the seven-day waiting
period and cannot change the terms of the loan this close to the closing.
4. Confirm with the seller's broker, the lender and the
UPDATED ACTUAL Exam Questions and CORRECT Answers
Question 1.
The Civil Rights Act of 1866 prohibits any type of discrimination based on:
1. gender.
2. race.
3. race and gender.
4. religion.
Correct Answer: 2
Question 2.
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.
Correct Answer: 4
Question 3.
A couple owns an older home in a neighborhood that is becoming a commercial area.
Because of the change in the use of the land, the couple can expect the value of their
parcel to increase at some future time. This is an example of the principle of:
1. substitution.
2. contribution.
3. conformity.
4. anticipation.
Correct Answer: 4
Question 4.
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.
Correct Answer: 1
Question 5.
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.
Correct Answer: 1
Question 6.
Which of the following real estate contracts is a service contract?
1. a purchase agreement
2. a listing agreement
3. an option contract
4. a mortgage
Correct Answer: 2 A realty firm has just entered into an agreement to
represent a home builder in the sale of a new subdivision. The firm has
located several potential buyers and five homes have been sold to purchasers
that the firm's agents have contacted. The realty firm has an agency
relationship with:
1. the builder.
2. the buyers.
3. the builder and the buyers.
4. neither the builder nor the buyers. -✓✓1
Question 7.
When a home is purchased using an ARM, the monthly loan payment on the mortgage
will:
1. rise slightly in each adjustment period until the cap is reached.
2. be adjusted automatically to ensure that negative amortization does not occur.
3. be based on a very low interest rate to begin with, but will rise to the market rate at
the first adjustment.
4. vary over the life of the loan depending on fluctuations in the interest rate to which
the loan is referenced.
Correct Answer: 4
Question 8.
A written agreement in which a purchaser agrees to buy and a seller agrees to sell is
called:
1. an agency.
2. an assessment.
3. a contract.
4. a fiduciary obligation.
Correct Answer: 3
, Question 9.
A prospective buyer made an offer to purchase a property. The owner responded with a
counteroffer. While the buyer was reviewing the counteroffer, the owner received a
better offer. The owner can accept the second offer if:
1. it satisfies or exceeds all terms included in the counteroffer.
2. the owner withdraws the counteroffer before it is accepted.
3. the owner gives the first buyer notice that another offer was received and an
opportunity to revise the bid.
4. the first buyer is informed, in writing, of the owner's intent to accept another offer.
Correct Answer: 2
Question 10.
Real property can be converted to personal property by
1. annexation.
2. severance.
3. accession.
4. extension.
Correct Answer: 2
Question 11.
A broker has signed a listing contract for the sale of a home. Which of the following
could make this contract voidable?
1. The seller cannot write and sign with an "X".
2. The listing contract specifies that no other broker may show the house.
3. The seller is heavily under the influence of alcohol at the time of signing.
4. The listing contract specifies that a commission will be paid only if the house is sold
within 3 weeks.
Correct Answer: 3
Question 12.
A broker and the buyers he represents are anxiously awaiting the closing on their new
home. The closing is scheduled in 4 days. The buyers inform the broker that they just
received revised Loan Estimate and Closing Disclosure forms from the lender, indicating
the Annual Percentage Rate on their loan has increased by 0.3%. Based on the
TILA-RESPA Integrated Disclosure rule, what action should the broker take in this
situation?
1. Assist the buyers in calculating the new loan payments and ask them if they want to
proceed with the closing as scheduled.
2. Advise the buyers to file a legal action against the lender for violation of predatory
lending practices under the Real Estate Settlement Procedures Act.
3. Call the lender and inform them that they are in violation of the seven-day waiting
period and cannot change the terms of the loan this close to the closing.
4. Confirm with the seller's broker, the lender and the
