PSI REAL ESTATE SALESPERSON
PRACTICE EXAM AND ACTUAL
DETAILED ANSWERS.
A couple listed their home with a broker. After 2 months, the seller found a buyer, and the sale
closed. The seller was not obligated to pay a commission to the broker. This listing was MOST
likely
1. an exclusive agency listing.
2. an exclusive right to sell listing.
3. a net listing.
4. an advance fee listing. - Answer an exclusive agency listing
What critical aspect of the property inspection process MUST licensees convey to prospective
buyers?
1. Difficulty of finding competent inspectors.
2. Appropriate fee splitting between inspectors and brokers.
3. Need for inspections to be completed within the time stated in the contract.
4. Likelihood that the inspection will generate a list of items sellers must repair. - Answer Need
for inspections to be completed within the time stated in the contract.
An exception to title insurance coverage is
1. forged documents.
2. defects found in public newspapers.
3. incorrect records of marital status.
4. defects that clearly appear in the title search. - Answer defects that clearly appear in the
title search.
If a borrower can afford to make monthly principal and interest payments of $1,000 and the
lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan
(rounded to the nearest $100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION
TABLE.)
,State laws differ on whether a buyer is entitled to know about
1. a suicide that occurred in the house last year.
2. possible lead paint in the property.
3. the flooding of the basement every spring.
4. the fact that the sellers are getting a divorce. - Answer a suicide that occurred in the house
last year.
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?
1. The first sold.
2. The second sold.
3. The last sold.
4. Cannot tell from the information given - Answer The first sold.
A property management plan may serve different purposes for different owners, and generally
has to strike a balance between preservation of the property's value and generation of income.
Which of the following owners would MOST likely prefer a property manager who emphasizes
maintenance of value over profitability?
1. An individual entrepreneur who owns several apartment buildings.
2. The Department of Housing and Urban Development.
3. The investment division of a bank.
4. A corporate Real Estate Investment Trust. - Answer The Department of Housing and Urban
Development.
Federal Truth-in-Lending laws are also known as
1. the Freedom of Information Act.
2. the Equal Credit Opportunity Act.
3. Regulation Z.
4. Title VIII. - Answer Regulation Z.
, 3. an investment group.
4. an insurance company. - Answer an insurance company.
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?
1. Apply the legal tests of a fixture.
2. Apply local court decisions dealing with similar items.
3. Specify questionable items of property in the written sales contract.
4. Use the legal definition of a fixture as any permanently attached item. - Answer Specify
questionable items of property in the written sales contract.
A salesperson in a branch office is sued for damages by a buyer after the salesperson
misrepresents a property. Who has the ultimate responsibility for the salesperson's actions?
1. the owner of the property
2. the supervising broker
3. the branch manager
4. the salesperson - Answer the supervising broker
A seller's statement in a property disclosure document means
1. the owner is disclosing known latent defects.
2. nothing, because the seller will not be responsible for any defects.
3. the property is fully suitable for the uses contemplated by the buyer.
4. the owner creates a warranty that there are no defects in the property. - Answer the owner
is disclosing known latent defects.
When compiling a competitive market analysis, a broker would look for comparable properties
that
1. were sold for all cash.
2. had been extensively advertised.
PRACTICE EXAM AND ACTUAL
DETAILED ANSWERS.
A couple listed their home with a broker. After 2 months, the seller found a buyer, and the sale
closed. The seller was not obligated to pay a commission to the broker. This listing was MOST
likely
1. an exclusive agency listing.
2. an exclusive right to sell listing.
3. a net listing.
4. an advance fee listing. - Answer an exclusive agency listing
What critical aspect of the property inspection process MUST licensees convey to prospective
buyers?
1. Difficulty of finding competent inspectors.
2. Appropriate fee splitting between inspectors and brokers.
3. Need for inspections to be completed within the time stated in the contract.
4. Likelihood that the inspection will generate a list of items sellers must repair. - Answer Need
for inspections to be completed within the time stated in the contract.
An exception to title insurance coverage is
1. forged documents.
2. defects found in public newspapers.
3. incorrect records of marital status.
4. defects that clearly appear in the title search. - Answer defects that clearly appear in the
title search.
If a borrower can afford to make monthly principal and interest payments of $1,000 and the
lender will make a 30-year loan at 5-1/2%, or a 20-year loan at 4-1/2%, what is the largest loan
(rounded to the nearest $100) this buyer can afford? (BE SURE TO USE THE AMORTIZATION
TABLE.)
,State laws differ on whether a buyer is entitled to know about
1. a suicide that occurred in the house last year.
2. possible lead paint in the property.
3. the flooding of the basement every spring.
4. the fact that the sellers are getting a divorce. - Answer a suicide that occurred in the house
last year.
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?
1. The first sold.
2. The second sold.
3. The last sold.
4. Cannot tell from the information given - Answer The first sold.
A property management plan may serve different purposes for different owners, and generally
has to strike a balance between preservation of the property's value and generation of income.
Which of the following owners would MOST likely prefer a property manager who emphasizes
maintenance of value over profitability?
1. An individual entrepreneur who owns several apartment buildings.
2. The Department of Housing and Urban Development.
3. The investment division of a bank.
4. A corporate Real Estate Investment Trust. - Answer The Department of Housing and Urban
Development.
Federal Truth-in-Lending laws are also known as
1. the Freedom of Information Act.
2. the Equal Credit Opportunity Act.
3. Regulation Z.
4. Title VIII. - Answer Regulation Z.
, 3. an investment group.
4. an insurance company. - Answer an insurance company.
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?
1. Apply the legal tests of a fixture.
2. Apply local court decisions dealing with similar items.
3. Specify questionable items of property in the written sales contract.
4. Use the legal definition of a fixture as any permanently attached item. - Answer Specify
questionable items of property in the written sales contract.
A salesperson in a branch office is sued for damages by a buyer after the salesperson
misrepresents a property. Who has the ultimate responsibility for the salesperson's actions?
1. the owner of the property
2. the supervising broker
3. the branch manager
4. the salesperson - Answer the supervising broker
A seller's statement in a property disclosure document means
1. the owner is disclosing known latent defects.
2. nothing, because the seller will not be responsible for any defects.
3. the property is fully suitable for the uses contemplated by the buyer.
4. the owner creates a warranty that there are no defects in the property. - Answer the owner
is disclosing known latent defects.
When compiling a competitive market analysis, a broker would look for comparable properties
that
1. were sold for all cash.
2. had been extensively advertised.
