National PSI Broker Exam with solutions
A broker is completing a CMA to determine the potential listing price of
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
a seller's home. Which of the following is NOT part of the final CMA
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
given to the seller? ||! ||! ||!
A)
Highest and best use evaluation
||! ||! ||! ||!
||! B)
Comparable sales analysis ||! ||!
||! C)
Adjustments to past sales ||! ||! ||!
||! D)
Pictures of comparables - correct answer ✔A)
||! ||! ||! ||! ||! ||!
The answer is highest and best use evaluation. An appraiser does a
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highest and best use evaluation, which does not appear in a CMA.
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
Houses in the local area have had an increase in sales price and a
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
decrease in days on the market. A broker who is attempting to
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
determine the current market value for a residential listing would get
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
the BEST estimate of value by using
||! ||! ||! ||! ||! ||!
A)
a GRM as the primary consideration to determine value.
||! ||! ||! ||! ||! ||! ||! ||!
,||! B)
the cost approach with reproduction estimates.
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||! C)
comparables that are no more than six months old.
||! ||! ||! ||! ||! ||! ||! ||!
||! D)
comparables that are no more than 12 months old. - correct answer
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
✔C)
The answer is comparables that are no more than six months old. In a
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
changing market, the more recent the comparables, the more likely
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
they are to reflect upward or downward price changes.
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Rental rates have increased by 2% in the last six months. Which
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
appraisal principle BEST explains this rate increase?
||! ||! ||! ||! ||! ||!
A)
Principle of substitution ||! ||!
||! B)
Principle of supply and demand
||! ||! ||! ||!
||! C)
Principle of contribution ||! ||!
||! D)
Principle of highest and best use - correct answer ✔B)
||! ||! ||! ||! ||! ||! ||! ||! ||!
,The answer is principle of supply and demand. The principle of supply
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
and demand states that as fewer properties become available for rent
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
or sale, the price owners can charge will increase.
||! ||! ||! ||! ||! ||! ||! ||!
The current monthly GRM in a neighborhood is 200, and the annual
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
income is $24,000. What is the estimated value of a property in this
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
neighborhood?
A)
$200,000
B)
||!
$240,000
C)
||!
$400,000
D)
||!
$4,800,000 - correct answer ✔C) ||! ||! ||! ||!
The answer is $400,000. Monthly GRM × monthly income = value. 200
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
× 2,000 ($24,000 ÷ 12) = $400,000.
||! ||! ||! ||! ||! ||!
The subject property has two baths and one fireplace. The property
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
across the street sold for $181,000 and has two baths and two
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
fireplaces. The property behind the subject sold for $175,000 and has
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
two baths and no fireplace. In the area, baths are worth $5,000 and
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
fireplaces are worth $3,000. What is the subject property worth?
||! ||! ||! ||! ||! ||! ||! ||! ||!
A)
, $175,000
B)
||!
$177,000
C)
||!
$178,000
D)
||!
$180,000 - correct answer ✔The answer is $178,000
||! ||! ||! ||! ||! ||! ||! ||!
Subject Property Comp 1 $181,000 Comp 2 $175,000
||! ||! ||! ||! ||! ||! ||!
2 baths 2 baths no adjustment 2 baths no adjustment
||! ||! ||! ||! ||! ||! ||! ||! ||!
1 fireplace 2 fireplaces - $3,000 No fireplace + $3,000
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Adjusted price $178,000 Adjusted price $178,000
||! ||! ||! ||! ||!
According to federal government lending regulations, a buyer purchasing
||! ||! ||! ||! ||! ||! ||! ||! ||!
a home must have an appraisal for all the following types of financing
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
EXCEPT
A)
FHA.
B)
||!
VA.
C)
||!
loan sold to FNMA.
||! ||! ||!
D)
||!
seller carry. - correct answer ✔D)
||! ||! ||! ||! ||!
A broker is completing a CMA to determine the potential listing price of
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
a seller's home. Which of the following is NOT part of the final CMA
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
given to the seller? ||! ||! ||!
A)
Highest and best use evaluation
||! ||! ||! ||!
||! B)
Comparable sales analysis ||! ||!
||! C)
Adjustments to past sales ||! ||! ||!
||! D)
Pictures of comparables - correct answer ✔A)
||! ||! ||! ||! ||! ||!
The answer is highest and best use evaluation. An appraiser does a
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
highest and best use evaluation, which does not appear in a CMA.
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
Houses in the local area have had an increase in sales price and a
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
decrease in days on the market. A broker who is attempting to
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
determine the current market value for a residential listing would get
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
the BEST estimate of value by using
||! ||! ||! ||! ||! ||!
A)
a GRM as the primary consideration to determine value.
||! ||! ||! ||! ||! ||! ||! ||!
,||! B)
the cost approach with reproduction estimates.
||! ||! ||! ||! ||!
||! C)
comparables that are no more than six months old.
||! ||! ||! ||! ||! ||! ||! ||!
||! D)
comparables that are no more than 12 months old. - correct answer
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
✔C)
The answer is comparables that are no more than six months old. In a
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
changing market, the more recent the comparables, the more likely
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
they are to reflect upward or downward price changes.
||! ||! ||! ||! ||! ||! ||! ||!
Rental rates have increased by 2% in the last six months. Which
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
appraisal principle BEST explains this rate increase?
||! ||! ||! ||! ||! ||!
A)
Principle of substitution ||! ||!
||! B)
Principle of supply and demand
||! ||! ||! ||!
||! C)
Principle of contribution ||! ||!
||! D)
Principle of highest and best use - correct answer ✔B)
||! ||! ||! ||! ||! ||! ||! ||! ||!
,The answer is principle of supply and demand. The principle of supply
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
and demand states that as fewer properties become available for rent
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
or sale, the price owners can charge will increase.
||! ||! ||! ||! ||! ||! ||! ||!
The current monthly GRM in a neighborhood is 200, and the annual
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
income is $24,000. What is the estimated value of a property in this
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
neighborhood?
A)
$200,000
B)
||!
$240,000
C)
||!
$400,000
D)
||!
$4,800,000 - correct answer ✔C) ||! ||! ||! ||!
The answer is $400,000. Monthly GRM × monthly income = value. 200
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
× 2,000 ($24,000 ÷ 12) = $400,000.
||! ||! ||! ||! ||! ||!
The subject property has two baths and one fireplace. The property
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
across the street sold for $181,000 and has two baths and two
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
fireplaces. The property behind the subject sold for $175,000 and has
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
two baths and no fireplace. In the area, baths are worth $5,000 and
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
fireplaces are worth $3,000. What is the subject property worth?
||! ||! ||! ||! ||! ||! ||! ||! ||!
A)
, $175,000
B)
||!
$177,000
C)
||!
$178,000
D)
||!
$180,000 - correct answer ✔The answer is $178,000
||! ||! ||! ||! ||! ||! ||! ||!
Subject Property Comp 1 $181,000 Comp 2 $175,000
||! ||! ||! ||! ||! ||! ||!
2 baths 2 baths no adjustment 2 baths no adjustment
||! ||! ||! ||! ||! ||! ||! ||! ||!
1 fireplace 2 fireplaces - $3,000 No fireplace + $3,000
||! ||! ||! ||! ||! ||! ||! ||! ||!
Adjusted price $178,000 Adjusted price $178,000
||! ||! ||! ||! ||!
According to federal government lending regulations, a buyer purchasing
||! ||! ||! ||! ||! ||! ||! ||! ||!
a home must have an appraisal for all the following types of financing
||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||! ||!
EXCEPT
A)
FHA.
B)
||!
VA.
C)
||!
loan sold to FNMA.
||! ||! ||!
D)
||!
seller carry. - correct answer ✔D)
||! ||! ||! ||! ||!
