PSI National Real Estate Exam Authentic
Complete Questions and 100% Correct
Answers (Top Performance Guide)
Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is
this okay?
-No, because he's not an attorney, he shouldn't prepare contracts.
-No, he should have his client complete any forms.
-Yes, licensees can use standard forms originally created or approved by an attorney.
-Yes, real estate licensees may draft contracts and fill in blanks on existing contracts. -
✓✓Yes, licensees can use standard forms originally created or approved by an
attorney.
Derrick was thrilled to find out that the land he purchased includes several small caves.
He's been spelunking for about three years and looks forward to exploring the caves on
weekends. Which real property right allows him to do so?
-Disposition
-Enjoyment
-Exclusion
-Possession -✓✓Enjoyment
Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He
receives a Loan Estimate from his lender. What's the purpose of this document?
-To detail the amount Lawrence needs to bring to closing
-To detail the estimated closing costs for Lawrence's loan
-To disclose the interest rates available on this lender's various loan programs
-To disclose the lender's source of loan funds -✓✓To detail the estimated closing costs
for Lawrence's loan
**The Loan Estimate, which the lender must provide within three days of loan
application, provides an estimate of mortgage loan costs.
Claire rents 1,100 square feet of office space in a new professional building. Her rent
payment includes all utilities and property taxes, but she pays separately for custodial
services. What kind of lease does Claire have?
-Full-service lease
-Modified gross lease
-Percentage lease
-Triple-net lease -✓✓Modified gross lease
,**A modified gross lease typically includes all the nets in the base rent, but not utilities
and/or janitorial services.
Marlon and Leah are interested in buying a home in a new homeowner opportunity
area. The 100-year-old row house was renovated and is like new on the inside. The
property taxes decreased by more than $5,000 last year. What's the likely reason for
this?
-Introductory rates
-Seller error
-Tax abatement
-Tax reassessment -✓✓Tax abatement
**A tax abatement program will lower the property taxes on a given property for a set
amount of time. This is typically in response to some sort of improvement or
rehabilitation, or for some new construction properties.
Which of the following is an example of price fixing?
-A brokerage requires all licensees to offer a fair cooperative brokerage fee.
-Three brokerages agree to purchase office supplies together to obtain a bulk discount.
-Twelve brokerages discuss compensation of associated independent contractor
licensees.
-Two brokerages determine a standard commission rate. -✓✓Two brokerages
determine a standard commission rate.
**Collusion must occur on pricing for the public in order for price fixing to occur.
Which legislative act prohibits certain types of electronic communication?
-CAN-SPAM
-NO-SPAM
-SPAM-CAN
-SPAM-JAM -✓✓CAN-SPAM
**The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-
SPAM) prohibits junk email and requires an "unsubscribe" option in any email marketing
messages.
Tracy is looking in the MLS and sees a listing marked "REO." Which of these
statements regarding REOs is correct?
-An REO property is one that the lender is trying to help the owner sell before beginning
foreclosure proceedings.
,-Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure
actions.
-REOs are properties that the lender has given permission to sell for less than the loan
amount.
-REOs refer to investment properties a bank owns. -✓✓Banks acquire REOs through
failed foreclosure sales or deed in lieu of foreclosure actions.
**Failed foreclosure sales and deed in lieu of foreclosure actions result in lenders taking
title to properties they previously had mortgage loans on. These properties are called
real estate owned, or REOs.
Shakira is attending an association meeting when, in a small group breakout, her group
begins discussing how to deal with the new kid in town: a real estate firm that charges a
flat $500 to list properties, then lets the sellers fend for themselves. Shakira should
leave the discussion because _______.
-She needs to get to work developing this model for herself
-The group seems bent on creating a tie-in arrangement
-This conversation seems to be turning into a discussion of market allocation
-This conversation sounds like it might become an antitrust violation -✓✓This
conversation sounds like it might become an antitrust violation
**This conversation sounds like it could lead to group boycotting, an antitrust violation.
Seller Jason is giving listing agent Rebecca a tour of his house and pointing out all the
features, even the spot in the attic where a previous owner's ghost likes to come back
and visit. Jason asks Rebecca if buyers should be told about this. Which response is
best?
-"All states require sellers to disclose any undesirable feature of a house, which
includes ghosts."
-"The presence of spirits stigmatizes the property. Many states don't consider this a
material fact requiring disclosure, but this is my first ghost encounter, so I'll check our
laws."
-"We can tell prospective buyers that the property comes with a roommate."
-"You can't mention this, because it would be a fair housing violation." -✓✓"The
presence of spirits stigmatizes the property. Many states don't consider this a material
fact requiring disclosure, but this is my first ghost encounter, so I'll check our laws."
Which one of the following types of ownership termination allows each tenant to have a
specific, divided portion (partition) of the property exclusively?
-Termination by division
-Termination of co-ownership by partition
-Termination of estate in severalty
-Termination of joint tenancies -✓✓Termination of co-ownership by partition
, **Termination of tenancy in common by partition allows each tenant to have a specific,
divided portion of the property exclusively. If the property can't be divided, the court may
rule that the property be sold and the proceeds divided by the tenants.
Which of these would void a deed intended to convey property?
-The grantee is not mentally competent.
-The grantee's signature is not acknowledged.
-The grantor is not mentally competent.
-The transfer includes no monetary consideration. -✓✓The grantor is not mentally
competent.
Desmond has a signed listing agreement with his clients, the Harpers. In exchange for
helping the Harpers list, market, and sell their home, the Harpers have agreed to pay
Desmond a commission. What type of agreement do Desmond and the Harpers have?
-Bilateral
-Executed
-Mutual
-Unilateral -✓✓Bilateral
**A contract involving an exchange of promises or other consideration between two
parties is a bilateral contract.
Phoebe's gross monthly income is $4,200, and she has $360 in monthly non-housing
debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for
the total DTI ratio. What's the maximum housing payment she can afford?
-$1,075
-$1,152
-$1,176
-$1,512 -✓✓$1,176
**The maximum house payment is the lesser of the amounts calculated using both
ratios. DTI: $4,200 x .36 = $1,512. $1,512 - $360 = $1,152. Housing ratio: $4,200 x .28
= $1,176. Phoebe's maximum payment is $1,152.
Which of these is an example of agency coupled with interest?
-A listing agent agrees to accept a commission of 2.5% upon sale of the property.
-A listing agent agrees to split the commission on the sale of a property with a
cooperating agent who brings the buyer to the table.
-An agent foregoes buyer agent commission, provided the purchasing developer gives
the agent the listings on the developed lots.
Complete Questions and 100% Correct
Answers (Top Performance Guide)
Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is
this okay?
-No, because he's not an attorney, he shouldn't prepare contracts.
-No, he should have his client complete any forms.
-Yes, licensees can use standard forms originally created or approved by an attorney.
-Yes, real estate licensees may draft contracts and fill in blanks on existing contracts. -
✓✓Yes, licensees can use standard forms originally created or approved by an
attorney.
Derrick was thrilled to find out that the land he purchased includes several small caves.
He's been spelunking for about three years and looks forward to exploring the caves on
weekends. Which real property right allows him to do so?
-Disposition
-Enjoyment
-Exclusion
-Possession -✓✓Enjoyment
Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He
receives a Loan Estimate from his lender. What's the purpose of this document?
-To detail the amount Lawrence needs to bring to closing
-To detail the estimated closing costs for Lawrence's loan
-To disclose the interest rates available on this lender's various loan programs
-To disclose the lender's source of loan funds -✓✓To detail the estimated closing costs
for Lawrence's loan
**The Loan Estimate, which the lender must provide within three days of loan
application, provides an estimate of mortgage loan costs.
Claire rents 1,100 square feet of office space in a new professional building. Her rent
payment includes all utilities and property taxes, but she pays separately for custodial
services. What kind of lease does Claire have?
-Full-service lease
-Modified gross lease
-Percentage lease
-Triple-net lease -✓✓Modified gross lease
,**A modified gross lease typically includes all the nets in the base rent, but not utilities
and/or janitorial services.
Marlon and Leah are interested in buying a home in a new homeowner opportunity
area. The 100-year-old row house was renovated and is like new on the inside. The
property taxes decreased by more than $5,000 last year. What's the likely reason for
this?
-Introductory rates
-Seller error
-Tax abatement
-Tax reassessment -✓✓Tax abatement
**A tax abatement program will lower the property taxes on a given property for a set
amount of time. This is typically in response to some sort of improvement or
rehabilitation, or for some new construction properties.
Which of the following is an example of price fixing?
-A brokerage requires all licensees to offer a fair cooperative brokerage fee.
-Three brokerages agree to purchase office supplies together to obtain a bulk discount.
-Twelve brokerages discuss compensation of associated independent contractor
licensees.
-Two brokerages determine a standard commission rate. -✓✓Two brokerages
determine a standard commission rate.
**Collusion must occur on pricing for the public in order for price fixing to occur.
Which legislative act prohibits certain types of electronic communication?
-CAN-SPAM
-NO-SPAM
-SPAM-CAN
-SPAM-JAM -✓✓CAN-SPAM
**The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-
SPAM) prohibits junk email and requires an "unsubscribe" option in any email marketing
messages.
Tracy is looking in the MLS and sees a listing marked "REO." Which of these
statements regarding REOs is correct?
-An REO property is one that the lender is trying to help the owner sell before beginning
foreclosure proceedings.
,-Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure
actions.
-REOs are properties that the lender has given permission to sell for less than the loan
amount.
-REOs refer to investment properties a bank owns. -✓✓Banks acquire REOs through
failed foreclosure sales or deed in lieu of foreclosure actions.
**Failed foreclosure sales and deed in lieu of foreclosure actions result in lenders taking
title to properties they previously had mortgage loans on. These properties are called
real estate owned, or REOs.
Shakira is attending an association meeting when, in a small group breakout, her group
begins discussing how to deal with the new kid in town: a real estate firm that charges a
flat $500 to list properties, then lets the sellers fend for themselves. Shakira should
leave the discussion because _______.
-She needs to get to work developing this model for herself
-The group seems bent on creating a tie-in arrangement
-This conversation seems to be turning into a discussion of market allocation
-This conversation sounds like it might become an antitrust violation -✓✓This
conversation sounds like it might become an antitrust violation
**This conversation sounds like it could lead to group boycotting, an antitrust violation.
Seller Jason is giving listing agent Rebecca a tour of his house and pointing out all the
features, even the spot in the attic where a previous owner's ghost likes to come back
and visit. Jason asks Rebecca if buyers should be told about this. Which response is
best?
-"All states require sellers to disclose any undesirable feature of a house, which
includes ghosts."
-"The presence of spirits stigmatizes the property. Many states don't consider this a
material fact requiring disclosure, but this is my first ghost encounter, so I'll check our
laws."
-"We can tell prospective buyers that the property comes with a roommate."
-"You can't mention this, because it would be a fair housing violation." -✓✓"The
presence of spirits stigmatizes the property. Many states don't consider this a material
fact requiring disclosure, but this is my first ghost encounter, so I'll check our laws."
Which one of the following types of ownership termination allows each tenant to have a
specific, divided portion (partition) of the property exclusively?
-Termination by division
-Termination of co-ownership by partition
-Termination of estate in severalty
-Termination of joint tenancies -✓✓Termination of co-ownership by partition
, **Termination of tenancy in common by partition allows each tenant to have a specific,
divided portion of the property exclusively. If the property can't be divided, the court may
rule that the property be sold and the proceeds divided by the tenants.
Which of these would void a deed intended to convey property?
-The grantee is not mentally competent.
-The grantee's signature is not acknowledged.
-The grantor is not mentally competent.
-The transfer includes no monetary consideration. -✓✓The grantor is not mentally
competent.
Desmond has a signed listing agreement with his clients, the Harpers. In exchange for
helping the Harpers list, market, and sell their home, the Harpers have agreed to pay
Desmond a commission. What type of agreement do Desmond and the Harpers have?
-Bilateral
-Executed
-Mutual
-Unilateral -✓✓Bilateral
**A contract involving an exchange of promises or other consideration between two
parties is a bilateral contract.
Phoebe's gross monthly income is $4,200, and she has $360 in monthly non-housing
debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for
the total DTI ratio. What's the maximum housing payment she can afford?
-$1,075
-$1,152
-$1,176
-$1,512 -✓✓$1,176
**The maximum house payment is the lesser of the amounts calculated using both
ratios. DTI: $4,200 x .36 = $1,512. $1,512 - $360 = $1,152. Housing ratio: $4,200 x .28
= $1,176. Phoebe's maximum payment is $1,152.
Which of these is an example of agency coupled with interest?
-A listing agent agrees to accept a commission of 2.5% upon sale of the property.
-A listing agent agrees to split the commission on the sale of a property with a
cooperating agent who brings the buyer to the table.
-An agent foregoes buyer agent commission, provided the purchasing developer gives
the agent the listings on the developed lots.
