National PSI Broker Final Exam prep
Questions and All Correct Answers
2025-2026 Edition.
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 - 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. - Answer C)
,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 - 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 - 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
,B)
$177,000
C)
$178,000
D)
$180,000 - 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. - Answer D)
The answer is seller carry. All government loans and any sold on the secondary market require
an appraisal. A seller-carry loan, or seller financing, may or may not require an appraisal.
A buyer chooses a loan with an LTV ratio of 90%, which requires the purchase of PMI, instead of
a loan with an 80% LTV, which would not require the insurance. The buyer MOST likely made
this choice because
A)
, paying PMI will mean that all mortgage payments and homeowners association fees are
deferred in case of default.
D)
the buyer wants a smaller down payment, even though the buyer will have to pay PMI. - Answer
D)
The answer is the buyer wants a smaller down payment, even though the buyer will have to pay
PMI. Buyers are willing to pay PMI (private mortgage insurance) in order to bring a smaller
down payment to closing, which will mean a higher monthly payment. PMI protects lenders in
case of default.
A buyer is getting a new mortgage with a 95% loan-to-value ratio. The final loan amount the
lender will lend the buyer is determined by the
A)
lower of the sales price or appraised value.
B)
higher of the sales price or appraised value.
C)
sales price only.
D)
appraised value only. - Answer A)
The answer is lower of the sales price or appraised value. The loan-to-value (LTV) ratio is
determined by the lower of the sales price or appraised value.
The difference between using a partially amortized loan or an interest-only term loan is that the
partially amortized loan would result in
A)
smaller payments and a smaller balloon payment.
B)
larger payments and a smaller balloon payment.
C)
Questions and All Correct Answers
2025-2026 Edition.
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 - 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. - Answer C)
,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 - 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 - 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
,B)
$177,000
C)
$178,000
D)
$180,000 - 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. - Answer D)
The answer is seller carry. All government loans and any sold on the secondary market require
an appraisal. A seller-carry loan, or seller financing, may or may not require an appraisal.
A buyer chooses a loan with an LTV ratio of 90%, which requires the purchase of PMI, instead of
a loan with an 80% LTV, which would not require the insurance. The buyer MOST likely made
this choice because
A)
, paying PMI will mean that all mortgage payments and homeowners association fees are
deferred in case of default.
D)
the buyer wants a smaller down payment, even though the buyer will have to pay PMI. - Answer
D)
The answer is the buyer wants a smaller down payment, even though the buyer will have to pay
PMI. Buyers are willing to pay PMI (private mortgage insurance) in order to bring a smaller
down payment to closing, which will mean a higher monthly payment. PMI protects lenders in
case of default.
A buyer is getting a new mortgage with a 95% loan-to-value ratio. The final loan amount the
lender will lend the buyer is determined by the
A)
lower of the sales price or appraised value.
B)
higher of the sales price or appraised value.
C)
sales price only.
D)
appraised value only. - Answer A)
The answer is lower of the sales price or appraised value. The loan-to-value (LTV) ratio is
determined by the lower of the sales price or appraised value.
The difference between using a partially amortized loan or an interest-only term loan is that the
partially amortized loan would result in
A)
smaller payments and a smaller balloon payment.
B)
larger payments and a smaller balloon payment.
C)
