PSI REAL ESTATE STATE EXAM (NJ)
UPDATED QUESTIONS AND ANSWERS
|UPDATED 2025
Q: When a landowner uses their property as collateral for a loan, what kind
of encumbrance is created?
A) A voluntary lien
B) A personal lien
✔✔ C) An involuntary lien
D) A general lien
Q: If a property owner wants to list their property "as is," what should the
listing agent do?
A) Refuse to list the property
B) Advertise the property without disclosures
✔✔ C) Ask the seller about any known defects
D) Waive the property disclosure requirements
Q: According to the NJ Real Estate Timeshare Act, which of the following is
NOT true when selling a timeshare in New Jersey?
✔✔ A) The licensee must hold a timeshare-specific license
B) The property must be registered
C) Advertising must be truthful and not misleading
D) Buyers must be given a 7-day right of rescission
Q: Can a New Jersey real estate licensee refuse to cooperate with other
licensees?
A) No, cooperation is mandatory
B) Only with written permission from the seller
✔✔ C) Yes, if the broker instructs the salesperson not to cooperate
D) Only if the other licensee is from out-of-state
,Q: A motel’s appraisal reveals business loss due to a highway reroute. What
type of depreciation is this?
A) Functional obsolescence
B) Physical deterioration
✔✔ C) Economic obsolescence
D) Straight-line depreciation
Q: A buyer’s exclusive representation agreement does not include a legal
property description. What is the result?
A) The agreement is still valid
B) The agreement becomes a general agency
C) The buyer may cancel within 3 days
✔✔ D) The agreement is voidable until a legal description is included
Q: What item would typically be prorated at closing and credited to the
seller?
A) Prepaid property taxes
B) Security deposit
C) Utility bills
✔✔ D) Unearned rent collected in advance
Q: A homeowner finds that a neighbor in a deed-restricted community is
violating a restriction by keeping a Shetland pony. Can the homeowner take
legal action?
✔✔ A) Yes, because deed restrictions are enforceable by other property
owners in the subdivision
B) No, only the city can enforce restrictions
C) No, animals under 100 lbs are exempt
D) Only the HOA can file a complaint
, The Realty Transfer Fee (RTF) -ANSWER✔✔In New Jersey, the fee which Must
be paid when fee simple title to a parcel of real estate passes for a consideration
from one party to another is the:
The required down payment may be lower than conventional loans -
ANSWER✔✔What is the greatest ADVANTAGE of using FHA financing when
purchasing a home that the buyer plans to occupy?
Seller/ Agent on behalf of the seller -ANSWER✔✔A broker has a single agency
relationship with the seller. Any REQUIRED property condition disclosure would
be completed by the
C. The seller agrees to sell at a fixed price within a stipulated time. -
ANSWER✔✔Which of the following statements is TRUE regarding an option
agreement?
C. higher equity in the property. -ANSWER✔✔A low loan-to-value ratio indicated
a
C. This is a negotiation that keeps the original offer alive. -ANSWER✔✔An offer
was presented but the seller did not accept the offer; instead he suggested different
terms that would be more acceptable. Which of the following is false?
Void -ANSWER✔✔A buyer contracted to purchase a vacant lot for $350,000 cash
with no contingencies. The buyer intends to build a professional office complex on
the property. However, the buyer did not advise the seller of this intent. Prior to
closing, the buyer learns that local zoning will not allow an office complex. The
buyer's contract may be considered.
UPDATED QUESTIONS AND ANSWERS
|UPDATED 2025
Q: When a landowner uses their property as collateral for a loan, what kind
of encumbrance is created?
A) A voluntary lien
B) A personal lien
✔✔ C) An involuntary lien
D) A general lien
Q: If a property owner wants to list their property "as is," what should the
listing agent do?
A) Refuse to list the property
B) Advertise the property without disclosures
✔✔ C) Ask the seller about any known defects
D) Waive the property disclosure requirements
Q: According to the NJ Real Estate Timeshare Act, which of the following is
NOT true when selling a timeshare in New Jersey?
✔✔ A) The licensee must hold a timeshare-specific license
B) The property must be registered
C) Advertising must be truthful and not misleading
D) Buyers must be given a 7-day right of rescission
Q: Can a New Jersey real estate licensee refuse to cooperate with other
licensees?
A) No, cooperation is mandatory
B) Only with written permission from the seller
✔✔ C) Yes, if the broker instructs the salesperson not to cooperate
D) Only if the other licensee is from out-of-state
,Q: A motel’s appraisal reveals business loss due to a highway reroute. What
type of depreciation is this?
A) Functional obsolescence
B) Physical deterioration
✔✔ C) Economic obsolescence
D) Straight-line depreciation
Q: A buyer’s exclusive representation agreement does not include a legal
property description. What is the result?
A) The agreement is still valid
B) The agreement becomes a general agency
C) The buyer may cancel within 3 days
✔✔ D) The agreement is voidable until a legal description is included
Q: What item would typically be prorated at closing and credited to the
seller?
A) Prepaid property taxes
B) Security deposit
C) Utility bills
✔✔ D) Unearned rent collected in advance
Q: A homeowner finds that a neighbor in a deed-restricted community is
violating a restriction by keeping a Shetland pony. Can the homeowner take
legal action?
✔✔ A) Yes, because deed restrictions are enforceable by other property
owners in the subdivision
B) No, only the city can enforce restrictions
C) No, animals under 100 lbs are exempt
D) Only the HOA can file a complaint
, The Realty Transfer Fee (RTF) -ANSWER✔✔In New Jersey, the fee which Must
be paid when fee simple title to a parcel of real estate passes for a consideration
from one party to another is the:
The required down payment may be lower than conventional loans -
ANSWER✔✔What is the greatest ADVANTAGE of using FHA financing when
purchasing a home that the buyer plans to occupy?
Seller/ Agent on behalf of the seller -ANSWER✔✔A broker has a single agency
relationship with the seller. Any REQUIRED property condition disclosure would
be completed by the
C. The seller agrees to sell at a fixed price within a stipulated time. -
ANSWER✔✔Which of the following statements is TRUE regarding an option
agreement?
C. higher equity in the property. -ANSWER✔✔A low loan-to-value ratio indicated
a
C. This is a negotiation that keeps the original offer alive. -ANSWER✔✔An offer
was presented but the seller did not accept the offer; instead he suggested different
terms that would be more acceptable. Which of the following is false?
Void -ANSWER✔✔A buyer contracted to purchase a vacant lot for $350,000 cash
with no contingencies. The buyer intends to build a professional office complex on
the property. However, the buyer did not advise the seller of this intent. Prior to
closing, the buyer learns that local zoning will not allow an office complex. The
buyer's contract may be considered.
