PSI Real Estate Practice Exam
An appraiser MUST be licensed or certified to handle Federally related work on residential property
valued at more than - correct answer ✔✔$250,000
A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson
should suggest - correct answer ✔✔a competitive market analysis to determine the property's value.
Three identical homes in a neighborhood were listed at the same time in a market where demand was
constant. According to the law of supply and demand, which would have sold for the lowest price? -
correct answer ✔✔The first sold.
If an older building cannot be air-conditioned, it is an example of - correct answer ✔✔functional
obsolescence.
All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT
the - correct answer ✔✔straight-line method.
When the sellers are lending part of the purchase price, they may secure the debt either with a deed of
trust or a mortgage. For the seller, one benefit of the deed of trust is that - correct answer
✔✔foreclosure is usually simpler and faster.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits
the lender to - correct answer ✔✔demand immediate payment of the entire note.
Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit
Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income
is - correct answer ✔✔commission sales.
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? - correct answer ✔✔Confirm with the seller's broker, the lender and the closing
entity that the closing must be delayed to allow for a new seven-day waiting period because of the
interest rate revision.
Federal Truth-in-Lending laws are also known as - correct answer ✔✔Regulation Z.
In helping a buyer to select a lender, if the buyer believes he has good credit and his income is
documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead
of a mortgage broker, for all of the following reasons EXCEPT - correct answer ✔✔more variety of loan
programs available.
According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following
disclosures MUST appear in the ad EXCEPT the - correct answer ✔✔prepayment penalties and rebates.
The FHA functions MOST like - correct answer ✔✔an insurance company.
A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The
property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that
all costs of the foreclosure sale are included in these balances. Which of the following statements is
FALSE regarding the distribution of funds? - correct answer ✔✔The second mortgagee receives nothing
unless he forced the foreclosure auction.
In the sale of property, there is often confusion over whether an item is a fixture or personal property.
What is the best way to avoid this confusion? - correct answer ✔✔Specify questionable items of
property in the written sales contract.
Although states make specific laws governing water rights and the rights in land that borders water, most
states generally follow one of two basic doctrines regarding water rights. Either riparian and littoral
rights are automatically conveyed with property, or all water rights are controlled by the state under the
doctrine of prior appropriation. The doctrine of prior appropriation is MOST likely to be followed in
states where - correct answer ✔✔water is scarce.
An appraiser MUST be licensed or certified to handle Federally related work on residential property
valued at more than - correct answer ✔✔$250,000
A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson
should suggest - correct answer ✔✔a competitive market analysis to determine the property's value.
Three identical homes in a neighborhood were listed at the same time in a market where demand was
constant. According to the law of supply and demand, which would have sold for the lowest price? -
correct answer ✔✔The first sold.
If an older building cannot be air-conditioned, it is an example of - correct answer ✔✔functional
obsolescence.
All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT
the - correct answer ✔✔straight-line method.
When the sellers are lending part of the purchase price, they may secure the debt either with a deed of
trust or a mortgage. For the seller, one benefit of the deed of trust is that - correct answer
✔✔foreclosure is usually simpler and faster.
A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits
the lender to - correct answer ✔✔demand immediate payment of the entire note.
Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit
Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income
is - correct answer ✔✔commission sales.
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? - correct answer ✔✔Confirm with the seller's broker, the lender and the closing
entity that the closing must be delayed to allow for a new seven-day waiting period because of the
interest rate revision.
Federal Truth-in-Lending laws are also known as - correct answer ✔✔Regulation Z.
In helping a buyer to select a lender, if the buyer believes he has good credit and his income is
documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead
of a mortgage broker, for all of the following reasons EXCEPT - correct answer ✔✔more variety of loan
programs available.
According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following
disclosures MUST appear in the ad EXCEPT the - correct answer ✔✔prepayment penalties and rebates.
The FHA functions MOST like - correct answer ✔✔an insurance company.
A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The
property has just been sold at a foreclosure auction to a speculating investor for $88,000. Assume that
all costs of the foreclosure sale are included in these balances. Which of the following statements is
FALSE regarding the distribution of funds? - correct answer ✔✔The second mortgagee receives nothing
unless he forced the foreclosure auction.
In the sale of property, there is often confusion over whether an item is a fixture or personal property.
What is the best way to avoid this confusion? - correct answer ✔✔Specify questionable items of
property in the written sales contract.
Although states make specific laws governing water rights and the rights in land that borders water, most
states generally follow one of two basic doctrines regarding water rights. Either riparian and littoral
rights are automatically conveyed with property, or all water rights are controlled by the state under the
doctrine of prior appropriation. The doctrine of prior appropriation is MOST likely to be followed in
states where - correct answer ✔✔water is scarce.
