PSI REAL ESTATE EXAM
QUESTIONS AND CORRECT
ANSWERS WITH RATIONALES
GRADED A+ LATEST
1. A real estate agent receives an offer from a buyer that is below the seller’s
asking price. The seller wants to reject the offer. Which of the following is the
agent’s duty?
A. Immediately accept the offer without consulting the seller
B. Advise the seller to counteroffer and present the offer promptly
C. Reject the offer on behalf of the seller
D. Delay presenting the offer until the market improves
Answer: B
Rationale: Agents must present all offers to the seller promptly and advise on
potential responses. They cannot unilaterally accept or reject offers.
,2. Which of the following best describes a “fixture” in real estate?
A. Personal property attached to the land temporarily
B. Personal property that cannot be moved without damage
C. Real property that is permanently attached to the land or building
D. Any item in a home that is easily removable
Answer: C
Rationale: Fixtures are items that were once personal property but are
permanently attached and considered part of the real property.
3. A buyer wants to purchase a property but will need financing. Which document
provides the buyer with the estimated costs, terms, and conditions of the mortgage?
A. Deed of trust
B. Loan estimate
C. Purchase agreement
D. Closing disclosure
Answer: B
Rationale: The loan estimate provides borrowers with a clear summary of loan
terms, including interest rate, monthly payments, and closing costs.
4. A landlord fails to return a tenant’s security deposit within the statutory period.
The tenant may:
A. File a civil lawsuit to recover the deposit plus possible damages
B. Keep the property without paying rent
C. Demand a new lease
D. Ignore the lease terms
Answer: A
Rationale: Tenants may take legal action if a landlord violates state laws regarding
the return of security deposits.
,5. Which of the following is an example of market value?
A. The price a property could reasonably sell for under normal conditions
B. The price the owner paid 10 years ago
C. The tax-assessed value
D. The cost to rebuild the property
Answer: A
Rationale: Market value is the most probable price a property would bring in an
open market transaction.
6. Which type of listing allows a seller to list with multiple brokers but only pay a
commission to the broker who finds a buyer?
A. Exclusive right-to-sell
B. Open listing
C. Exclusive agency
D. Net listing
Answer: B
Rationale: Open listings are non-exclusive, allowing multiple brokers to seek a
buyer. The commission is paid only to the broker who produces a ready, willing,
and able buyer.
7. A real estate licensee is representing both the buyer and the seller in the same
transaction. This is known as:
A. Dual agency
B. Transaction brokerage
C. Single agency
D. Designated agency
Answer: A
Rationale: Dual agency occurs when a licensee represents both parties, which
requires full disclosure and consent from both.
, 8. Which of the following would NOT typically be included in a deed?
A. Names of grantor and grantee
B. Legal description of the property
C. Sales price
D. Granting clause
Answer: C
Rationale: A deed does not need to include the sales price; it must identify the
parties, legal description, and contain a granting clause.
9. A property is sold “as-is.” Which of the following statements is true?
A. The seller is absolved of all disclosure responsibilities
B. The buyer assumes all risks but the seller must disclose known material defects
C. The buyer may rescind the contract at any time
D. The seller must repair all defects before closing
Answer: B
Rationale: “As-is” means the seller won’t make repairs, but disclosure of known
material defects is still required by law.
10. Which of the following best defines eminent domain?
A. The government seizes property without compensation
B. The government seizes property for public use with just compensation
C. A private buyer acquires property through negotiation
D. The property owner donates land voluntarily
Answer: B
Rationale: Eminent domain allows the government to take private property for
public use with fair compensation.
QUESTIONS AND CORRECT
ANSWERS WITH RATIONALES
GRADED A+ LATEST
1. A real estate agent receives an offer from a buyer that is below the seller’s
asking price. The seller wants to reject the offer. Which of the following is the
agent’s duty?
A. Immediately accept the offer without consulting the seller
B. Advise the seller to counteroffer and present the offer promptly
C. Reject the offer on behalf of the seller
D. Delay presenting the offer until the market improves
Answer: B
Rationale: Agents must present all offers to the seller promptly and advise on
potential responses. They cannot unilaterally accept or reject offers.
,2. Which of the following best describes a “fixture” in real estate?
A. Personal property attached to the land temporarily
B. Personal property that cannot be moved without damage
C. Real property that is permanently attached to the land or building
D. Any item in a home that is easily removable
Answer: C
Rationale: Fixtures are items that were once personal property but are
permanently attached and considered part of the real property.
3. A buyer wants to purchase a property but will need financing. Which document
provides the buyer with the estimated costs, terms, and conditions of the mortgage?
A. Deed of trust
B. Loan estimate
C. Purchase agreement
D. Closing disclosure
Answer: B
Rationale: The loan estimate provides borrowers with a clear summary of loan
terms, including interest rate, monthly payments, and closing costs.
4. A landlord fails to return a tenant’s security deposit within the statutory period.
The tenant may:
A. File a civil lawsuit to recover the deposit plus possible damages
B. Keep the property without paying rent
C. Demand a new lease
D. Ignore the lease terms
Answer: A
Rationale: Tenants may take legal action if a landlord violates state laws regarding
the return of security deposits.
,5. Which of the following is an example of market value?
A. The price a property could reasonably sell for under normal conditions
B. The price the owner paid 10 years ago
C. The tax-assessed value
D. The cost to rebuild the property
Answer: A
Rationale: Market value is the most probable price a property would bring in an
open market transaction.
6. Which type of listing allows a seller to list with multiple brokers but only pay a
commission to the broker who finds a buyer?
A. Exclusive right-to-sell
B. Open listing
C. Exclusive agency
D. Net listing
Answer: B
Rationale: Open listings are non-exclusive, allowing multiple brokers to seek a
buyer. The commission is paid only to the broker who produces a ready, willing,
and able buyer.
7. A real estate licensee is representing both the buyer and the seller in the same
transaction. This is known as:
A. Dual agency
B. Transaction brokerage
C. Single agency
D. Designated agency
Answer: A
Rationale: Dual agency occurs when a licensee represents both parties, which
requires full disclosure and consent from both.
, 8. Which of the following would NOT typically be included in a deed?
A. Names of grantor and grantee
B. Legal description of the property
C. Sales price
D. Granting clause
Answer: C
Rationale: A deed does not need to include the sales price; it must identify the
parties, legal description, and contain a granting clause.
9. A property is sold “as-is.” Which of the following statements is true?
A. The seller is absolved of all disclosure responsibilities
B. The buyer assumes all risks but the seller must disclose known material defects
C. The buyer may rescind the contract at any time
D. The seller must repair all defects before closing
Answer: B
Rationale: “As-is” means the seller won’t make repairs, but disclosure of known
material defects is still required by law.
10. Which of the following best defines eminent domain?
A. The government seizes property without compensation
B. The government seizes property for public use with just compensation
C. A private buyer acquires property through negotiation
D. The property owner donates land voluntarily
Answer: B
Rationale: Eminent domain allows the government to take private property for
public use with fair compensation.
