PSI National Real Estate Exam 2026/2027 Certification –
Complete Exam-Style Questions with Detailed Rationales | 100%
Verified – Pass Guaranteed – A+ Graded
Examination Parameters
● Total Questions: 110
● Time Allotment: 150 minutes (2.5 hours)
● Question Formats: Single Best Answer Multiple Choice, Select All That Apply
(SATA), Calculation Problems, Legal Scenario Interpretation
● Passing Standard: Application of real estate law, finance, valuation, and practice
to transactional scenarios
Section 1: Property Ownership and Land Use Controls
1. A grantor conveys property "to my daughter and her heirs as long as the premises are
used exclusively for single-family residential purposes." The daughter later converts the
garage into a commercial bakery. Which estate interest immediately becomes
possessory?
A. The daughter retains fee simple absolute because the restriction is unenforceable
without an HOA
B. The grantor's possibility of reverter automatically terminates the daughter's estate
C. The daughter holds a life estate pur autre vie measured by the bakery's operation
D. The grantor must file a quiet title action to enforce the condition
Correct Answer: B
,Rationale: The language creates a fee simple determinable. Upon breach of the limiting
condition (commercial use), the estate automatically terminates and the future
interest—possibility of reverter—becomes possessory in the grantor without court
action. A fee simple subject to condition subsequent would require the grantor to
exercise a right of entry.
2. Three siblings own a vacation home as joint tenants with right of survivorship. One
sibling conveys his interest to a business partner without the consent of the other two.
What is the resulting ownership structure?
A. The business partner becomes a joint tenant with the remaining siblings
B. The severance converts all owners to tenants in common
C. The remaining two siblings continue as joint tenants as to a two-thirds interest, while
the business partner holds a one-third interest as a tenant in common
D. The conveyance is void because joint tenancy cannot be severed unilaterally
Correct Answer: C
Rationale: A unilateral conveyance by one joint tenant severs only that tenant's share.
The remaining joint tenants retain their joint tenancy as to the undivided interest they
continue to hold together. The grantee takes the conveyed interest as a tenant in
common with the others.
3. A homeowner's property includes a recorded right-of-way across the neighbor's land
to access a public road. The neighbor sells his land to a developer. What is the status of
the right-of-way?
,A. It terminates automatically upon transfer because the developer did not sign the
original agreement
B. It is extinguished if the developer builds a fence across the path
C. It runs with the land and binds the developer as the new servient estate owner
D. It converts to a revocable license upon sale of the servient estate
Correct Answer: C
Rationale: An easement appurtenant benefits the dominant estate and burdens the
servient estate. Because it is appurtenant, it runs with the land and binds subsequent
owners of the servient estate regardless of whether they expressly agreed to it, provided
it was properly recorded or discoverable.
4. A property owner wishes to operate a small daycare center in a neighborhood zoned
for single-family residential use. The zoning ordinance lists daycares as a permitted
conditional use in residential districts. Which action must the owner take?
A. File for a variance based on undue hardship
B. Apply for a special use permit (conditional use permit) from the zoning board
C. Request a zoning map amendment to commercial
D. Claim nonconforming use status because the use predates the ordinance
Correct Answer: B
Rationale: A conditional use permit (special use permit) allows a use that is generally
compatible with a zoning district but requires individualized review of site-specific
impacts. A variance requires proof of undue hardship due to unique physical conditions.
, A map amendment changes the zoning classification. Nonconforming use applies only
to uses lawfully established before the current zoning.
5. A municipality files a condemnation action to acquire a strip of private land needed to
widen a public highway. The owner argues that the project is unnecessary. Which
statement accurately describes the municipality's power and the owner's
compensation?
A. The municipality must prove absolute public necessity in court before taking; if
proven, the owner receives replacement cost new
B. The municipality may exercise eminent domain for public use upon payment of just
compensation equal to fair market value
C. The municipality may only negotiate a voluntary sale; forced taking requires voter
approval
D. The owner is entitled to compensation equal to the original purchase price plus all
improvements
Correct Answer: B
Rationale: Eminent domain is the government's power to take private property for public
use upon payment of just compensation. Just compensation is defined as fair market
value at the time of taking, not replacement cost or original purchase price. The public
use requirement is broadly interpreted.
6. A claimant has occupied a vacant parcel openly, notoriously, continuously, and
without permission for 18 years. The state statute requires 20 years for adverse
possession. Which statement is correct?
Complete Exam-Style Questions with Detailed Rationales | 100%
Verified – Pass Guaranteed – A+ Graded
Examination Parameters
● Total Questions: 110
● Time Allotment: 150 minutes (2.5 hours)
● Question Formats: Single Best Answer Multiple Choice, Select All That Apply
(SATA), Calculation Problems, Legal Scenario Interpretation
● Passing Standard: Application of real estate law, finance, valuation, and practice
to transactional scenarios
Section 1: Property Ownership and Land Use Controls
1. A grantor conveys property "to my daughter and her heirs as long as the premises are
used exclusively for single-family residential purposes." The daughter later converts the
garage into a commercial bakery. Which estate interest immediately becomes
possessory?
A. The daughter retains fee simple absolute because the restriction is unenforceable
without an HOA
B. The grantor's possibility of reverter automatically terminates the daughter's estate
C. The daughter holds a life estate pur autre vie measured by the bakery's operation
D. The grantor must file a quiet title action to enforce the condition
Correct Answer: B
,Rationale: The language creates a fee simple determinable. Upon breach of the limiting
condition (commercial use), the estate automatically terminates and the future
interest—possibility of reverter—becomes possessory in the grantor without court
action. A fee simple subject to condition subsequent would require the grantor to
exercise a right of entry.
2. Three siblings own a vacation home as joint tenants with right of survivorship. One
sibling conveys his interest to a business partner without the consent of the other two.
What is the resulting ownership structure?
A. The business partner becomes a joint tenant with the remaining siblings
B. The severance converts all owners to tenants in common
C. The remaining two siblings continue as joint tenants as to a two-thirds interest, while
the business partner holds a one-third interest as a tenant in common
D. The conveyance is void because joint tenancy cannot be severed unilaterally
Correct Answer: C
Rationale: A unilateral conveyance by one joint tenant severs only that tenant's share.
The remaining joint tenants retain their joint tenancy as to the undivided interest they
continue to hold together. The grantee takes the conveyed interest as a tenant in
common with the others.
3. A homeowner's property includes a recorded right-of-way across the neighbor's land
to access a public road. The neighbor sells his land to a developer. What is the status of
the right-of-way?
,A. It terminates automatically upon transfer because the developer did not sign the
original agreement
B. It is extinguished if the developer builds a fence across the path
C. It runs with the land and binds the developer as the new servient estate owner
D. It converts to a revocable license upon sale of the servient estate
Correct Answer: C
Rationale: An easement appurtenant benefits the dominant estate and burdens the
servient estate. Because it is appurtenant, it runs with the land and binds subsequent
owners of the servient estate regardless of whether they expressly agreed to it, provided
it was properly recorded or discoverable.
4. A property owner wishes to operate a small daycare center in a neighborhood zoned
for single-family residential use. The zoning ordinance lists daycares as a permitted
conditional use in residential districts. Which action must the owner take?
A. File for a variance based on undue hardship
B. Apply for a special use permit (conditional use permit) from the zoning board
C. Request a zoning map amendment to commercial
D. Claim nonconforming use status because the use predates the ordinance
Correct Answer: B
Rationale: A conditional use permit (special use permit) allows a use that is generally
compatible with a zoning district but requires individualized review of site-specific
impacts. A variance requires proof of undue hardship due to unique physical conditions.
, A map amendment changes the zoning classification. Nonconforming use applies only
to uses lawfully established before the current zoning.
5. A municipality files a condemnation action to acquire a strip of private land needed to
widen a public highway. The owner argues that the project is unnecessary. Which
statement accurately describes the municipality's power and the owner's
compensation?
A. The municipality must prove absolute public necessity in court before taking; if
proven, the owner receives replacement cost new
B. The municipality may exercise eminent domain for public use upon payment of just
compensation equal to fair market value
C. The municipality may only negotiate a voluntary sale; forced taking requires voter
approval
D. The owner is entitled to compensation equal to the original purchase price plus all
improvements
Correct Answer: B
Rationale: Eminent domain is the government's power to take private property for public
use upon payment of just compensation. Just compensation is defined as fair market
value at the time of taking, not replacement cost or original purchase price. The public
use requirement is broadly interpreted.
6. A claimant has occupied a vacant parcel openly, notoriously, continuously, and
without permission for 18 years. The state statute requires 20 years for adverse
possession. Which statement is correct?
