PSI Real Estate Exam
In helping a buyer to select a lender, if the buyer believes he has good credit and his
income is documentable as a salary and by tax returns, the licensee might recommend a
mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT
1. closing costs may be lower.
2. loan originator has knowledge of the underwriter's policies.
3. more variety of loan programs available.
4. originator and lender are part of same company. - ANS- 3
A real estate salesperson is representing only the buyer in a transaction. Which of the
following actions would be a violation of the salesperson's agency duties to the client?
1. disclosing the price the seller originally paid for the property
2. disclosing the highest price the buyer is willing to pay
3. preparing a competitive market analysis
4. identifying latent property defects - ANS- 2
Prospective buyers made an offer on a property. The seller did NOT accept, but made a
counteroffer. The prospective buyers signed the counteroffer and the real estate agent
delivered their acceptance to the seller. In the interim, the same buyers had found
another house that they liked better and made an offer on it, which was accepted. Which
of the following is TRUE?
1. The contract on the first house is not enforceable.
2. Neither contract is enforceable.
3. Only the first contract is valid.
4. Both contracts are valid. - ANS- 4
Under the terms of their listing contract, the owners may sell their house themselves and
pay no commission. If their agent sells it, a commission will be due. What kind of listing
contract do the owners have?
1. Multiple listing.
2. Net listing.
3. Exclusive agency listing.
4. Exclusive right to sell listing. - ANS- 3
A seller mentions to his agent that the previous owners of his property may have
dumped hazardous waste on the site. Under the Comprehensive Environmental
,Response, Compensation, and Liability Act (CERCLA), who is liable for damages from
the dumping prior to the sale of the property?
1. Seller.
2. Agent.
3. Company that manufactured the waste.
4. Federal government. - ANS- 1
Alex, 14, and Kent, 17, inherited a piece of property. The next year, Kent deeded the
whole property to Alex, who immediately put it on the market. An adult buyer made a
written offer which was accepted by Alex. Which of the following is TRUE?
1. Kent must also sign the contract and any deed.
2. The signature of Alex's guardian is required.
3. The buyer cannot legally compel Alex to sell.
4. Both buyer and seller are bound by the contract. - ANS- 3
Building codes are?
1. created to establish zoning in a neighborhood.
2. ordinances that specify construction standards.
3. established in each neighborhood or development.
4. set up to hear complaints about effects of zoning ordinances. - ANS- 2
The Civil Rights Act of 1866 prohibits any type of discrimination based on
1. gender.
2. race.
3. race and gender.
4. religion. - ANS- 2
A realty firm has just entered into an agreement to represent a home builder in the sale of
a new subdivision. The firm has located several potential buyers and five homes have
been sold to purchasers that the firm's agents have contacted. The realty firm has an
agency relationship with
1. the builder.
2. the buyers.
3. the builder and the buyers.
4. neither the builder nor the buyers. - ANS- 1
According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the
following disclosures MUST appear in the ad EXCEPT the
, 1. cash price or amount of the loan.
2. amount of down payment required.
3. number, amount, and frequency of payments.
4. prepayment penalties and rebates. - ANS- 4
A deed restriction is applicable to the activities of
1. the current owner only.
2. all owners, present and future.
3. tenants.
4. mortgagors. - ANS- 2
If leased premises become unusable for the purpose state in the lease, the tenant may
have the right to abandon the premises. This action is called
1. condemnation.
2. actual eviction.
3. constructive eviction.
4. abandoned lease property. - ANS- 3
When a listing broker is preparing an Offer to Purchase for a buyer customer,
contingencies involving inspections or approval by a third party should
1. have short deadlines.
2. be discouraged by the broker.
3. be stated as briefly as possible.
4. be limited to mortgage arrangements. - ANS- 1
The FHA functions MOST like
1. a bank or savings and loan association.
2. a mortgage company.
3. an investment group.
4. an insurance company. - ANS- 4
For Federal income tax purposes, which of the following are costs of homeownership
that may be deducted from gross income?
1. Mortgage loan interest, local property taxes, mortgage loan origination fees.
2. Mortgage loan interest, homeowner's insurance premium, local property taxes.
3. Cost of essential repairs, mortgage loan origination fees, local property taxes.
4. Homeowner's insurance premium, mortgage loan origination fees, mortgage loan
interest. - ANS- 1
In helping a buyer to select a lender, if the buyer believes he has good credit and his
income is documentable as a salary and by tax returns, the licensee might recommend a
mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT
1. closing costs may be lower.
2. loan originator has knowledge of the underwriter's policies.
3. more variety of loan programs available.
4. originator and lender are part of same company. - ANS- 3
A real estate salesperson is representing only the buyer in a transaction. Which of the
following actions would be a violation of the salesperson's agency duties to the client?
1. disclosing the price the seller originally paid for the property
2. disclosing the highest price the buyer is willing to pay
3. preparing a competitive market analysis
4. identifying latent property defects - ANS- 2
Prospective buyers made an offer on a property. The seller did NOT accept, but made a
counteroffer. The prospective buyers signed the counteroffer and the real estate agent
delivered their acceptance to the seller. In the interim, the same buyers had found
another house that they liked better and made an offer on it, which was accepted. Which
of the following is TRUE?
1. The contract on the first house is not enforceable.
2. Neither contract is enforceable.
3. Only the first contract is valid.
4. Both contracts are valid. - ANS- 4
Under the terms of their listing contract, the owners may sell their house themselves and
pay no commission. If their agent sells it, a commission will be due. What kind of listing
contract do the owners have?
1. Multiple listing.
2. Net listing.
3. Exclusive agency listing.
4. Exclusive right to sell listing. - ANS- 3
A seller mentions to his agent that the previous owners of his property may have
dumped hazardous waste on the site. Under the Comprehensive Environmental
,Response, Compensation, and Liability Act (CERCLA), who is liable for damages from
the dumping prior to the sale of the property?
1. Seller.
2. Agent.
3. Company that manufactured the waste.
4. Federal government. - ANS- 1
Alex, 14, and Kent, 17, inherited a piece of property. The next year, Kent deeded the
whole property to Alex, who immediately put it on the market. An adult buyer made a
written offer which was accepted by Alex. Which of the following is TRUE?
1. Kent must also sign the contract and any deed.
2. The signature of Alex's guardian is required.
3. The buyer cannot legally compel Alex to sell.
4. Both buyer and seller are bound by the contract. - ANS- 3
Building codes are?
1. created to establish zoning in a neighborhood.
2. ordinances that specify construction standards.
3. established in each neighborhood or development.
4. set up to hear complaints about effects of zoning ordinances. - ANS- 2
The Civil Rights Act of 1866 prohibits any type of discrimination based on
1. gender.
2. race.
3. race and gender.
4. religion. - ANS- 2
A realty firm has just entered into an agreement to represent a home builder in the sale of
a new subdivision. The firm has located several potential buyers and five homes have
been sold to purchasers that the firm's agents have contacted. The realty firm has an
agency relationship with
1. the builder.
2. the buyers.
3. the builder and the buyers.
4. neither the builder nor the buyers. - ANS- 1
According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the
following disclosures MUST appear in the ad EXCEPT the
, 1. cash price or amount of the loan.
2. amount of down payment required.
3. number, amount, and frequency of payments.
4. prepayment penalties and rebates. - ANS- 4
A deed restriction is applicable to the activities of
1. the current owner only.
2. all owners, present and future.
3. tenants.
4. mortgagors. - ANS- 2
If leased premises become unusable for the purpose state in the lease, the tenant may
have the right to abandon the premises. This action is called
1. condemnation.
2. actual eviction.
3. constructive eviction.
4. abandoned lease property. - ANS- 3
When a listing broker is preparing an Offer to Purchase for a buyer customer,
contingencies involving inspections or approval by a third party should
1. have short deadlines.
2. be discouraged by the broker.
3. be stated as briefly as possible.
4. be limited to mortgage arrangements. - ANS- 1
The FHA functions MOST like
1. a bank or savings and loan association.
2. a mortgage company.
3. an investment group.
4. an insurance company. - ANS- 4
For Federal income tax purposes, which of the following are costs of homeownership
that may be deducted from gross income?
1. Mortgage loan interest, local property taxes, mortgage loan origination fees.
2. Mortgage loan interest, homeowner's insurance premium, local property taxes.
3. Cost of essential repairs, mortgage loan origination fees, local property taxes.
4. Homeowner's insurance premium, mortgage loan origination fees, mortgage loan
interest. - ANS- 1
