COLORADO PSI REAL ESTATE PRACTICE TEST QUESTIONS AND ANSWERS|100% CORRECT AND VERIFIED ANSWERS|2025/2026|A+ GRADED

COLORADO PSI REAL ESTATE PRACTICE
TEST QUESTIONS AND ANSWERS|100%
CORRECT AND VERIFIED


Legal descriptions using the government survey system are NOT generally used in - ANSWER-
B B B B B B B B B B B B B



the original 13 states.
B B B




Real property can be converted to personal property by - ANSWER-
B B B B B B B B B B severance



A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to m
B B B B B B B B B B B B B B B B B B B



ake the permission permanent in case he dislikes others who might move next door in the fut
B B B B B B B B B B B B B B B B



ure. What should he give his neighbor? - ANSWER-
B B B B B B B B A license.
B




A broker hires a salesperson as an independent contractor. In order for the salesperson to be c
B B B B B B B B B B B B B B B B



onsidered an independent contractor for federal income tax purposes, the broker's written co
B B B B B B B B B B B B



ntract with the salesperson MUST specify - ANSWER-
B B B B B B B



that the salesperson will not be treated as an employee for federal income tax purpose
B B B B B B B B B B B B B B



s.



The main difference between tenancy in common and joint tenancy is that with tenancy in co
B B B B B B B B B B B B B B B



mmon, when a co-owner dies, - ANSWER-
B B B B B B his undivided interest passes to his heirs.
B B B B B B




A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. T
B B B B B B B B B B B B B B B B



he property has just been sold at a foreclosure auction to a speculating investor for $88,000. A
B B B B B B B B B B B B B B B B



ssume that all costs of the foreclosure sale are included in these balances. Which of the follow
B B B B B B B B B B B B B B B B



ing statements is FALSE regarding the distribution of funds? - ANSWER-
B B B B B B B B B B



: The second mortgagee receives nothing unless he forced the foreclosure auction.
B B B B B B B B B B B




A broker is showing a buyer one of his residential listings. The buyer says he wants to establish
B B B B B B B B B B B B B B B B B B



a day care center for seniors in the property. The property has been used as a day care center f
B B B B B B B B B B B B B B B B B B B



or no more than five children. How should the broker advise this buyer? - ANSWER-
B B B B B B B B B B B B B B




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Wicky

, Provide the buyer with contact information for the local planning and zoning office to c
B B B B B B B B B B B B B B



onfirm the zoning and determine whether it permits his use.
B B B B B B B B B




A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned f
B B B B B B B B B B B B B B B B B



or residential use. Which of the following would MOST likely be used to obtain permission for
B B B B B B B B B B B B B B B B



this store? - ANSWER-
B B B Conditional use permit or zoning variance B B B B B




If conditions for property use are included in a deed and these conditions are violated, what is
B B B B B B B B B B B B B B B B B



the most severe potential penalty? - ANSWER-
B B B B B B



A court may order the return of the property to the original owner.
B B B B B B B B B B B B




New sidewalks installed only on one particular street will probably be paid for by - ANSWER-
B B B B B B B B B B B B B B B



a special assessment.
B B




An appraiser MUST be licensed or certified to handle Federally related work on residential pro
B B B B B B B B B B B B B B



perty valued at more than - ANSWER-
B B B B B B $250,000.



According to the principle of progression, a three-bedroom, one-
B B B B B B B B



story home is MOST likely to bring the highest sales price if located in a neighborhood in which
B B B B B B B B B B B B B B B B B



B B - ANSWER- most homes are larger than the sale home.
B B B B B B B




A formal appraisal will ALWAYS be REQUIRED when the - ANSWER-
B B B B B B B B B B



lender wants to sell the mortgage to the secondary market.
B B B B B B B B B




When compiling a competitive market analysis, a broker would look for comparable propertie
B B B B B B B B B B B B



s that - ANSWER-
B B B were located near the property being listed.
B B B B B B




For a buyer, a DISADVANTAGE of a partially amortized or balloon payment loan is that -
B B B B B B B B B B B B B B B



ANSWER-
B



at the end of the term, all remaining principal must be paid in a single large payment
B B B B B B B B B B B B B B B B




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Wicky